• Howard Perlmutter identified a way of classifying alternative management orientations,

which is commonly referred as Perlmutter’s EPRG model.

• This framework addresses the way strategic decisions are made and how the relationship
between headquarters and its subsidiaries is shaped. That is influence of the parent
company over the subsidiaries .

• In 1969, he bundled his in sights by publishing EPG model

• In 1979, the model extended with an additional component. It is EPRG Model

E- Ethnocentric - P- Polycentrism
Home Country – Host Country
Orientation Orientation

R-
G- Geocentrism
Regiocentrism –
– A world
A Regional
Orientation
Orientation
 • Affiliated corporate culture
• Aids transfer core
Complying to the operating company. competences more easily
• No incurring of costs for

No changes in product specification, price and Pros adaptability

promotion measures between native market

and overseas markets.

All exercises, activities and policies becomes

the default standard to which all subsidiaries
need to abide by. • Cultural short-sightedness
• Does not promote the best and
brightest in a firm
Managers in the anchoring nations migrate • No full exploitation of business
from home countries.
Cons opportunity

The main objective here is profitability.

Each National market is distinctive. Cons
Pros
Focus of difference between the home
High cost and
country and foreign country. efforts of national
Better
understanding of responsive
Find economic, cultural or political local needs marketing
similarities among regions

Identify the needs of potential

consumers. Better exploitation Delay in
of market localization
potentials
Strategy to be developed individually
for each country
Transitional phase between polycentric
and geocentric orientation
Group the countries which have
comparable market characteristics
Operational Strategies and Marketing
policies are made for regions not countries
Executives are transferred from the parent
company to regional headquarter.
Shows some level of sensitivity towards
local conditions in the host-country
Pros
• Cross-culture environment – Great
Learning
• No relocation costs are barred
• The nationals of the host country can
influence better
Cons
• Lack of Understanding between managers at
various levels
• Communication barrier
• Lack of International Experience
• Confusion between he regional objectives and
the global objectives
The geocentric orientation represents a
synthesis of ethnocentrism and polycentrism Pros Cons
into ‘world view’
• Balance both • National
global immigration
Create a global strategy that is fully responsive
to local needs and wants. integration and policies may
local put limits
responsiveness • Training and
Putting best people in the organisation • Shared relocation cost
irrespective of the nationality learning • Need to find
• MNC’s can managers and
develop the employees that
Sole goal is to globally unite headquarters and
subsidiaries
pool of senior have ability to
executives with adopt multiple
international styles at once.
Building strong culture and informal experiences
management channels.
Orientation Ethnocentric Polycentric Regiocentric Geocentric

Approach International Each country is Perceiving some The world is one

operations are relatively similarities of the common market
secondary independent foreign market
Priority Searching for Taking into Finding similar Unifying
identical consideration needs & making differences in the
segments in differences in the the groups world market
foreign markets foreign market

Evaluation and Home country Based mostly on Regional Collaborative

control standards profit targets itegrative and standards that
applied to national are universal and
subsidiaries responsiveness local
Planning Center headquarters National Regional centers Collaborative
Subsidiaries between
headquarters
and subsidiaries
Corporate Domestic market National Regional Global
strategy driven responsiveness integration and integration and
national national
responsiveness responsiveness