The Importance of Cross-Cultural Factors in Doing Business in Mexico
By Dr. Pramila Rao and Fernando Sanchez-Arias
Below the surface of intellectual and emotional layers, international managers and business leaders face the challenge of behavioral, physical and spiritual differences that can make a trade very successful or, to the contrary, a terrible failure. Beingable to identify differences and similarities when negotiating or working in cross-border assignments and trade missions increases the possibilities for success.1,2,3
According to the United States Trade Representative Office, U.S. trade with Mexico totaled an estimated $583.6 billion in 2015; exports were $267.2 billion, imports were $316.4 billion. Mexico is currently the U.S.’s third-largest trading partner with $531 billion in total (two-way) goods trade during 2015. Goods exports totaled $236 billion, goods imported totaled $295 billion.
Trade in services with Mexico (exports and imports) totaled an estimated $52.4 billion in 2015. Services exports were $30.8 billion, services imports were $21.6 billion. More and more American and Mexican leaders are creating businesses in an inter-cultural environment where small cultural details can jeopardize an important negotiation. Knowing how Mexicans think, feel, act and connect can make the business interactions more effective. Research shows that combining the right knowledge with the right motivation and behavior can help any international trader or manager be more profitable and successful in their business in Mexico.4,5
One of the things that needs to be understood is that cultural differences exist and understanding how a national culture is different or similar to another one helps business people interact better.
One of the most respected works of research into national cultural dimensions is the one published by Geert Hofstede, author of Cultures Consequences. Hofstede found that any national culture can be observed and understood by looking at six factors: power distance, uncertainty avoidance, masculinity vs. femininity, individualism vs. collectivism, long term orientation and indulgence vs. restraint.
This article will identify how these cultural dimensions translate into the workplace.7
The power-distance dimension shows the extent national cultures accept power and authority in organizations. Organizational levels in Mexico reflect hierarchy, status, and authority. Mexicans prefer job titles that reflect their power and positions.8 The high-power distance also makes Mexican subordinates behave in a deferential manner to their superiors.9 Bosses are usually addressed with formal titles of jefe or patron. The Mexican workforce does not endorse subordinates addressing bosses by their first names.10
The uncertainty-avoidance dimension denotes the extent to which national cultures feel threatened by uncertain or ambiguous situations. Their high scores on uncertainty-avoidance makes the work culture quite bureaucratic. For example, in recruitment, applicants’ bio-data solicit elaborate personal and professional information to reduce any uncertainty in the recruitment process.11 In production or work schedules, any changes require several signatures before such changes can be implemented.12
The masculinity dimension suggests the extent to which the cultures emphasize materialistic goals, while the feminine dimension indicates a cultural importance on nurturing values. The Mexican culture is male-dominated and strongly prefers men for upper-level and executive positions. Women frequently express being marginalized and harassed at the work place.13
The individualism dimension addresses the values the culture places on independence, while the collectivism dimension refers to the importance cultures emphasize for group harmony. Mexicans with their high collectivist orientation demonstrate a strong affinity for their family and friends (inner groups) and frequently hire from their inner group circles.14,15
The long-term orientation determines whether cultures will adopt strategic perspectives in formulating corporate or personal practices. The Mexican culture lives very much in the present and mañana (tomorrow) is considered another day. However, large organizations and Mexican subsidiaries of multinationals place a premium on strategic planning initiatives as they observe best practices from other international organizations.16
Finally, indulgent vs. restraint reflects the pleasure-seeking nature of societies.17 Mexicans simply love to enjoy life—a very hedonistic culture—as identified by its number two rank in Hofstede’s study. Mexicans celebrate approximately 600 public fiestas annually. Fiestas reveal several interesting cultural aspects of Mexicans. First, Mexicans like to spend time with their inner-group members and these gatherings provide such communal opportunities. Second, fiestas allow Mexicans to venerate and respect social and religious traditions, a deeply embedded cultural trait.18
Business leaders of multinationals should understand the cultural dimensions of the country in which they will be doing business. This cultural intelligence will certainly help them be more successful in today’s global village. International managers also require to demonstrate the right combination of knowledge and motivation with a good blend of strategy. This will help them go beyond any initial differences to build strong relations that can generate profit and sustainability in their business interactions with Mexico
Pramilka Rao, Ph.D., is a member of the Society of Human Resource Management (HRM) and an author of two learning modules on HRM practices of India and Mexico. She is an associate professor of human resources, management and marketing at Marymount University in Arlington, VA.
Fernando Sanchez-Arias is a PennCLO executive doctoral program student. He is an international talent management executive with more than 25 years of experience in more than 70 countries. He is vice president of the U.S.-Mexico Chamber of Commerce.
1. Hill, C.W. (2010). International Business: Competing in the Global Marketplace (8th ed.), Englewood Cliffs, NJ: Irwin McGraw-Hill. 2. Storti, C. (2001), The Art of Crossing Borders, London: Nicholas Brealey and Intercultural Press. 3. Dowling, P., Festing, M., and Engle, A. (2008). “International Human Resource Management: Managing People in a Multinational Context,” Hampshire: Cengage Learning. 4. Adler, N.J. (1997). International Dimensions of Organizational Behavior. Cincinnati, OH: South-Western College Publishing. 5. Trompenaars, F. (1993). Riding the Waves of Culture: Understanding Cultural Diversity in Business. London: The Economist Books. 6. Hofstede, G. (1980). Culture’s Consequences: International Differences in Work-Related Values. Beverly Hills, CA: Sage. 7. Hofstede, G. (1991). Cultures and Organizations: Software of the Mind. London: McGraw-Hill. 8. Peterson, D. (2010). “A Longitudinal Study of Assimilated Corporate Culture in Mexico.” Journal of Management Research, 2(1), 1-26. 9. Matviuk, S. (2010). “A Correlational Study 0f Culture and Leadership Expectations in a Mexican Manufacturing Plant.” The Business Review, Cambridge, 15(1), 14-19. 10. Arias-Galicia, F. (2005). Human Resource Management in Mexico. In Davila, A. and Elvira, M. (Eds) Managing Human Resources in Latin America (179-190). London and New York. Routledge. 11. Davila, A., and Elvira, M. (2007). “Psychological Contracts and Performance Management in Mexico. International Journal of Manpower, 28 (5), 384-402. 12. Litrico, J. (2007). “Beyond Paternalism: Cross-Cultural Perspectives on the Functioning of a Mexican Production Plant.” Journal of Business Ethics, 73(1), 53-63. 13. Zabludovsky, G. (2001). “Women Managers and Diversity Programs in Mexico.” The Journal of Management Development, 20 (4), 354-371. 14. Brutus, S. & Cabrera, E. (2004). “The Influence of Personal Values on Feedback-Seeking Behaviors.” Management Research, 2(3), 235-250. 15. Davila, A., and Elvira, M. (2007). “Psychological Contracts and Performance Management in Mexico.” International Journal of Manpower, 28 (5), 384-402 16. Gannon, M. & Pillai, R. (2010). Understanding Global Cultures. Metaphorical Journeys through 29 Nations, Clusters of Nations, Continents and Diversity. Los Angeles, London, New Delhi. Sage Publications. 17. Hofstede,G., Hofstede, G., Minkov, M. (2010). Cultures and Organizations. Software of the Mind. Intercultural Cooperation and Its Importance for Survival. New York. McGrawHill. 18. Gannon, M. & Pillai, R. (2010). Understanding Global Cultures. Metaphorical Journeys through 29 Nations, Clusters of Nations, Continents and Diversity. Los Angeles, London, New Delhi. Sage Publications.
Additional resources: Global Gender Gap (2013). World Economic Forum. http://www.weforum.org/issues/global-gender-gap. Hofstede Centre (2016). https://geert-hofstede.com/mexico.html. U.S.-Mexico Trade Facts (2016). Office of the United States Trade Representative. https://ustr. gov/countries-regions/americas/mexico
