Perlmutter identified distinctive "orientations" of management of international organizations. His "EPRG" scheme identified four types of attitudes or orientations associated with successive stages in the evolution of international operations.
1. Ethnocentrism: In ethnocentric orientation, home country is considered to be superior. Further the manager looks for similarly in the foreign market. He supposes that products and processes that have succeeded in the home country would also succeed abroad and should therefore be used. In the ethnocentric orientation foreign operations are viewed as secondary to domestic operations and primarily as a means of disposing of ‘surplus’ domestic production. Plans for overseas markets are developed in the home office, utilizing policies and procedures identical to those employed in the domestic market. An export department or international division, and the marketing personnel most commonly administer overseas marketing by an export department or international division. The ethnocentric position appears to be appropriate for a small company just entering international operations, or for companies with minimal international commitments because this approach entails a minimal risk and commitment to overseas markets - no international investment is required and no additional selling cost incurred, with the possible exception of higher distribution costs.
1. Ethnocentrism: In ethnocentric orientation, home country is considered to be superior. Further the manager looks for similarly in the foreign market. He supposes that products and processes that have succeeded in the home country would also succeed abroad and should therefore be used. In the ethnocentric orientation foreign operations are viewed as secondary to domestic operations and primarily as a means of disposing of ‘surplus’ domestic production. Plans for overseas markets are developed in the home office, utilizing policies and procedures identical to those employed in the domestic market. An export department or international division, and the marketing personnel most commonly administer overseas marketing by an export department or international division. The ethnocentric position appears to be appropriate for a small company just entering international operations, or for companies with minimal international commitments because this approach entails a minimal risk and commitment to overseas markets - no international investment is required and no additional selling cost incurred, with the possible exception of higher distribution costs.
2. Polycentrism: As the company begins to recognize the importance of inherent differences in overseas markets, a polycentric attitude emerges. The prevalent philosophy at this stage is that local personnel and techniques are best suited to deal with local market conditions. Subsidiaries are established in overseas markets and each subsidiary operates independently of the others and establishes its own marketing objectives and plans. In polycentric orientations the manager recognizes that each country is unique. To succeed abroad, such uniqueness has to be respected and addressed in the company offerings. The centralized structured as favored in the ethnocentric culture is found to be not appropriate structure. In this orientation local operations are given more autonomy. Subsidiaries are setup with operational independence.
3. Regiocentrism: A regiocentric company views different regions as different markets. A particular region with certain important common marketing characteristics is regarded as a single market, ignoring national boundaries. Objectives are set by negotiation between headquarters and regional HQ on the one hand and between regional HQ and individual subsidiaries on the other.
4. Geocentris: A geocentric company views the entire world as a single market and develops standardized marketing mix, projecting a uniform image of the company and its products, for the global market. Geocentric business practices are neither home operation’s nor the host country company’s but a hybrid of the two. A company follows a geocentrism approach when it bases its operations
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