Principles of Management CLEP Practice Exam 2026 - Free Management Practice Questions and Study Guide

The ethnocentric approach to international management is characterized by the practice of hiring parent-country nationals for key positions in foreign operations. This strategy assumes that the management style and practices of the home country will be more effective in the host country, reflecting a belief that the parent-country nationals possess superior knowledge, skills, and understanding of the company's practices. By placing individuals from the home country in significant roles abroad, organizations aim to maintain control and ensure that the global operations align closely with the company's overall objectives, culture, and philosophies.

Using parent-country nationals can foster consistency in management practices across international borders and help in transferring company values and corporate culture to the subsidiary. However, this approach can also lead to potential challenges, such as cultural misunderstandings and a lack of integration with local practices and customs, which might be better understood by local managers.

The other approaches described—hiring locals from the host country, utilizing individuals from various countries, and employing a diverse set of managers based on skills—represent different management strategies (such as polycentric and geocentric) that emphasize local knowledge and a more diverse managerial perspective over the ethnocentric focus.