A polycentric approach also has its drawbacks. Host-country nationals have limited
opportunities to gain experience outside their own country and thus cannot progress
beyond senior positions in their own subsidiary. As in the case of an ethnocentric policy,
this may cause resentment. Perhaps the major drawback with a polycentric approach,
However, is the gap that can form between host-country managers and parent-country
Language barriers, national loyalties, and a range of cultural differences may
isolate the corporate headquarters staff from the various foreign subsidiaries' The lack of management transfers from home to host countries, and vice versa' can exacerbate this isolate and lead to a lack of integration between corporate headquarters and foreign subsidiaries. The result can be a "federation" of largely independent national units with only nominal links to the corporate headquarters. Within such a federation, the coor'
dination required to transfer core competencies or to pursue experience curve and location
economies may be difficult to achieve. Thus, although a polycentric approach may be effective for firms pursuing a localization strategy, it is inappropriate for other strategies.
The federation that may result from a polycentric approach can also be a force for inertia within the firms .
After decades of pursuing a polycentric staffing policy, food and
Detergents giant Unilever found that shifting from a strategic posture that emphasized
localization to a transnational posture was very difficult. Unilever’s foreign subsidiaries
had evolved into quasi-autonomous operations, each with its own strong national
identity. These "little kingdoms" objected strenuously to corporate headquarters'
attempts to limit their autonomy and to rationalize global manufacturing.