Regiocentric Management

Posted in Human Resources Terms, Total Reads: 576

Definition: Regiocentric Management

Regiocentric Management is management of important activities (like hiring of people, marketing, branding of company products /services) from the geographic regions where company operates. Regiocentric Management enables the workforce to have a similar background, culture and there is ease of management since all the activities can be monitored and are accessible.

Regiocentric Hiring:

In this kind of hiring approach, managers are selected from region where company has operating business like host country. This kind of hiring help in implantation of business strategy focused to particular regional requirements. In order to get culture inputs to grow business, Regiocentric hiring is preferred choice.

Regiocentric Marketing /Branding:

Here marketing efforts like segmentation, or introduction of new brands are considered on the basis of regional requirements. This is implemented by keeping in mind the similar needs of customer from the region.

Why Regiocentric Management is practiced?

Management by this approach becomes easy for achieving cultural fit, as people coming from same background tend to fit easily in organization which has grown in same culture.

Person of host country can influence senior management as compared to person from different country.

It is much more cost effective to hire person in host country than person from other country with dissimilar culture.

Managers will find it easy to work in similar kind of environment which would leads to better productivity.

Where Regiocentric management creates problems-

Firm level goals and region level goals might compete with each other. In such time, prioritization become problem with mutually conflicting goals

When company moves to new markets, manager from new markets cannot easily understand situation as that has been understood by managers at headquarters.

Cultures difference may create barriers like power distance which makes communication difficult.

Though Regiocentric management aims at exploring opportunities offered by language and culture in particular region, it also limits growth of company in other regions. In today’s age of multinational and transnational companies, Regiocentric management will offer limited opportunity for future growth.Organization must have global visions with regional expertise.

Hence, this concludes the definition of Regiocentric Management along with its overview.


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