Final answer:
Ethnocentrism in HRM can harm diversity and innovation within a company. Professionalizing HR can reduce hiring biases, as seen in Canadian research. Diversity training in global workplaces can improve teamwork and reduce prejudice.
Step-by-step explanation:
The concept of ethnocentrism in human resource management (HRM) refers to a practice where businesses prioritize their home country's cultural norms and practices, often leading to a preference for home country nationals for key positions. Such firms may indeed offer similar pay and benefit packages internationally or require significant training in the company's culture before international assignments.
However, this approach can lead to a lack of diversity, which has been shown to harm a company's competitiveness and bottom line. Professionalizing HR functions can help reduce bias, as in the example from Canada where Asian applicants faced discrimination. Recognizing the value of diversity, companies could focus on hiring people with different backgrounds to encourage innovative solutions and reduce the risk of ethnocentrism.
Multinational corporations (MNCs) often provide higher wages and better benefits than local companies but may still underpay compared to what they can afford, leading to criticism. In the global workforce, diversity training can play a crucial role in improving teamwork and reducing prejudice, as found by Pettigrew and Tropp's meta-analysis on group contact.