Basic issues for companies that sell globally are the composition of the sales force in terms of nationality. List choices that are available to companies for selecting a sales force. Outline advantages and disadvantages of each choice

Question

What will be an ideal response?

Answer 1

It is possible to utilize expatriate salespersons, hire host-country nationals, or utilize third-country sales personnel. The staffing decisions are based on several factors, including managements' orientation, the technological sophistication of the product and the stage of economic development exhibited by the target country. A company with an ethnocentric orientation is likely to prefer expatriates and adopt a standardized approach without regard to technology or the level of economic development in the target country. On the other hand, polycentric companies selling in developed countries may opt for expatriates to sell technologically sophisticated products; a host-country sales force can be used when technological sophistication is lower. In less-developed countries, host-country nationals may be used for products in which technology is a factor and host-country agents may be used for low-tech products. The widest diversity of sales force nationality is found in a company in which a regiocentric orientation prevails. Except in the case of high-tech products in developed countries, third-country nationals are likely to be used in all situations. Management should weigh in advantages and disadvantages of each nationality type. Expatriates, since they come from the home country, often possess a high level of product knowledge and are likely to be thoroughly versed in their company's commitment to after-sales service. They are also better able to institute policies and standards. It is also very easy to train them for promotion. The disadvantages include that there is high cost involved and with the high turnover the costs can go up further. Also, the cost for language and cross-cultural training has to be taken into account. Host-country hiring is economical, they have superior market knowledge, good language skills, superior cultural knowledge, and they can implement actions rapidly. The disadvantages include that they need product training and may be held in low esteem. Also, language skills may not be important, and it is difficult to ensure their loyalty. Using the third-country salesperson has advantages of cultural sensitivity, language skills, economy, and the possibility of regional sales coverage. The disadvantages include that they face identity problems, promotions may be limited, and there may be income gaps based on the country they are coming from. They will need product or company training; however, their loyalty is not assured. After much trial and error in creating sales forces, most companies today attempt to establish a hybrid sales force comprised of a balanced mix of expatriates and in-country nations.