A successful IHR manager should compare the advantages and disadvantages of differing expatriate and local staffing strategies in conjunction with other key management strategic decision makers in order to select the best strategy for the MNC. There are many benefits that arise from utilizing local people rather than expatriates to fill key positions within foreign operations. Often these benefits are underestimated, particularly for senior positions, for reasons which are often based on racial or national stereotypes (Banai, 1992). There are four advantages of successful localization policies. First, localization of human resources may improve relations between foreign investors and host country governments. Selmer (2004) has argued that this is the case in the Chinese context as the government favors the development of local employees. Thus from the MNC’s point of view, a localization strategy may help to ensure foreign operations operate with minimum levels of conflict with the host authorities, while simultaneously garnering greater buy-in and support from the host government. Second, localization of human resources may improve communication, and, ultimately business performance in the host country. This is because communication local-tolocal is usually more effective than foreigner-to-local. Third, host country labor is generally a more reliable resource than temporary workers, who even if they work in the country for a long time, have divided loyalty (Black and Gregerson 1992) and certainly see their ultimate destination as a different location. Fourth, from an economic perspective, by responding to local needs, especially through investing capital and employing local labor, the organization increases the wealth of the local population and so increases its ability to buy products and services sold by local business. Even if the market is small and poor, there can be good potential for growth and long-term profit (Prahalad, 2004; Scullion& Collings, 2006, pp.141-142)