Final answer:
Ethnocentric companies may encounter drawbacks such as accusations of neocolonialism and cultural insensitivity when using an expatriate sales force globally. A profit incentive and the need for expansion often lead firms to hire from a diverse local workforce to better cater to local markets and avoid ethnocentric bias.
Step-by-step explanation:
The assertion that ethnocentric companies are likely to use an expatriate sales force in countries at all levels of economic development is often challenged. Ethnocentricity in business signifies a preference for home-country cultural norms, management styles, and employee norms. While multinational corporations (MNCs) might provide higher wages and benefits than local businesses in developing countries, they may also impose their own cultural norms and practices.
Drawbacks of the ethnocentric approach include potential accusations of neocolonialism and a failure to engage with local cultures and workforce pools. Businesses have a clear profit incentive to widen their market base by selling to diverse demographics, and by necessity, must often utilize the local workforce to truly expand production capabilities and cater to the local market preferences, indicating that reliance on an ethnocentric or expatriate sales force can be limiting.
Moreover, a diverse workforce can prevent ethnocentric bias, which can distort perceptions and reinforce inequality in multicultural societies. In an age of globalization and international division of labor, businesses encouraging local employment may better navigate local market dynamics, avoid xenophobia, and enhance their global competitiveness.