Douglas Wind and Pelmutter advocated four approaches of International Business. They are:
- Ethnocentric Approach
- Polycentric Approach
- Regiocentric Approach
- Geocentric Approach
Ethnocentric Approach:
The domestic companies normally formulates their strategies, their product design and their operations towards the national markets, customers and competitors. The company exports the same products designed to domestic markets to foreign countries. Thus maintenance of domestic approach towards International business is Ethnocentric Approach.
Polycentric Approach:
The company establishes a foreign subsidiary company and decentralizes all the operations and delegates decision-making and policy making authority to its executives. In fact company appoints executives and personnel who direct reports to managing Director of that company. Company appoints key personnel from he home country and all other vacancies are filled by people of host country.
Regiocentric Approach:
The company after operating successfully in a foreign country, thinks of exporting to the neighboring countries of the host country. At this stage, the foreign subsidiary considers the regional environment for formulating policies. It markets more or less the same product design, under polycentric approach in other country of region with the different market strategy.
Geocentric Approach:
Under this approach, the entire world is just like a single country for the company. They select the employees from entire globe and operate with a number of subsidiaries. Each subsidiary functions as an autonomous company in formulating policies, strategies, product design, etc,.