Howard Perlmutter identified a way of classifying alternative management orientations, which is commonly referred as Perlmutter’s EPRG model. He states that. The aim of this paper is to present the fundamental ideas behind EPRG model . () the essence of geocentric strategy is an uniform approach to all national. To overcome from this problem one should adopt EPRG Framework, ETHNOCENTRIC ORIENTATION: Ethnocentric approach will better suit.
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EPRG – INTERNATIONAL MARKETING ORIENTATION
What is accepted as a permissible way of treating employees in the United States, the home country, may not be acceptable to Chinese employees, in the host country. This is because it does not need to send skilled managers out to maintain centralized policies. These include an organizations headquarters that’s decision-making authority is relatively high. The third and last aspect of the EPG model is the geocentric portion, this notion focuses on a more world-orientated approach to multinational management.
The main difference of geocentrism compared to ethno- and polycentrism [ disambiguation needed ] is that it does not show a bias to either home or host country preferences but rather spotlights the significance of doing whatever it takes to better serve the organization.
This approach appears most appropriate when overseas sales volume is insignificant in comparison to the total sales of the firm. With that said, geocentrism is an ideology that must be accepted by any corporation operating globally in order for any sort of eprv and long term stability to be attained.
The perg of European Silicon Structures illustrates the practice of geocentric organizations. In the most extreme views of polycentrism, it is the “attitude that culture of various countries are different, that foreigners are difficult to understand and should be left alone as long as their work is profitable.
From Wikipedia, the free encyclopedia. A polycentric approach should only be used within a company in which there is a certain amount of comfort in allowing the host country to make all major decisions, following their own qpproach and objectives. When they look to new markets they rely on what they know and seek similarities with their own country.
Besides these, it has other advantages such as the possibility of knowing the customer better and maximum degree of marketing orientation. Orientation towards international operations by a company, which consider export market has no difference with domestic market and hence applies domestic market techniques with overseas market.
Since not much investment is made in overseas operations so if loss may occur then firm can absorb shock without much difficulty. Many of the companies involving themselves in exporting and importing of various commodities.
This page was last edited on 10 Novemberat A third force causing this movement is the abundance of growing world markets, occurring in areas such as income earning age population, rising GDP’s, and escalating disposable income in areas such as China and Korea.
The term multinational company is often used to describe such a structure.
He states that businesses and their staff tend to operate in one of four ways:. It has been introduced by Howard V. In this approach a company finds economic, cultural or political similarities among regions in order to satisfy the similar needs of potential consumers.
Orientation towards international operations by a company, which consider the whole world as one market and hence develops global strategies approacu are applied in domestic market also. Therefore, knowledge that could be beneficial across all regions is lost, and subsidiaries could be worse off than if they had obtained the knowledge.
EPRG Framework – Management Study HQ
The Online Merriam-Webster Dictionary. The most effective way to enforce geocentrism is with a formal reward system that encourages both approafh and headquarters managers to work for sprg goals rather than just defending home country values. Such companies do not adapt their products to the needs and wants of other countries where they have operations. In this case, it would be important for a firm to re-align its focus in order to ensure that it is correctly representing the firm’s focus.
Columbia Journal of World Business 1: International marketing is no longer appproach only to the traditional technique of producing goods in one country and export to other countries, it includes movement of all factors of production, such as Raw materials, human skills, finance, machinery, technology etc.
This develops an affiliated corporate culture and aids transfer core competences more easily. A polycentric approach “gives rise to the problems of coordination and control.
This perception mitigates the chance of cultural myopia and is often less expensive to execute when compared to ethnocentricity. Circumstance under which EPRG should be employed.
The first drawback of a polycentric approach is that the “benefits of global coordination between subsidiaries such as the development of economies of scale cannot be realized.
It is the overall goal of geocentrism to form a collaborative network between headquarters and subsidiaries; this arrangement should entail a set of universal standards that can thus be used as a guideline when attacking key business decisions.