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The Cultural Contexts Of Mexican Business Dealings

Chris Stewart

The Cultural Contexts of Mexican Business Dealings: From Stereotypes to Respect

By chris stewart
Copyright © Chris Stewart 2001
Questions or comments? mail to chris@mexandtex.com

Too often, individual actors in a relationship allow themselves to be influenced by their preconceptions about how another party will behave without knowing from direct experience. These stereotypes can be especially striking when the relationship between the two parties is a formal one, as is often the case in international business relationships between Mexican and American business managers. Too often the American manager allows herself to get lost in the expectation that the Mexican party will adjust to her style, regardless of the nature of the relationship. And too often the preconceived stereotypes of the American manager are negative ones. American business managers need to learn the cultural contexts of doing business in Mexico, and they need to take the time to get to know the individuals with whom they will do business there. Moreover, American managers must constantly re-asses their existing cultural knowledge to minimize the risk of succumbing to stereotypes since Mexico’s is a vibrant culture that changes over time.

Even the guides to doing business in Mexico reinforce some negative stereotypes. For example, both Reed & Gray (1997) and Heusinkfeld (1994) reinforce the common misconception that women in Mexican society are subordinate to men. Reed & Gray (1997) note that in business dealings, “Rule number two: a woman never pays. This is not open to interpretation” [1] (pg. 26). They further promulgate the patently false notion that Mexican women always change their names when they get married: “When María Hernández Torres… married Ramón García, she became María Hernández de García” (pg. 30). Heusinkfeld (1994) repeats the same falsehood: “If [Marta Hernández García] marries Roberto Vásquez López, she retains her father’s name, drops her mother’s name, and becomes Marta Hernández de Vázquez” (pg. 24). In fact, a Mexican woman commonly retains her name after marriage, dropping neither of her last names and leaving her husband’s name entirely to him [2] . A common story told in Milpa Alta – a conservative, agricultural pueblo on the southeast side of Mexico City – tells of a Mexican woman who signs her name on her marriage certificate as “de Gonzales.” The judge who married the two scolds her, reminding her that she is nobody’s property. Then, he creates a new marriage certificate, and repeats the entire ceremony, reminding the women that her name has not changed. The woman signs her name correctly – sans “de” and sans her husband’s paternal last name – and the ceremony proceeds.

Such observations may seem trivial, but the authors who make them do so within the context – this time correct – of the importance of family to the Mexican people. Such mix-ups can create terrible confusion to readers, especially if they begin using terms like “Señora de Sanchez” indiscriminately. Not only will they look bad, but also they may offend the Mexican hosts in whose presence they repeat such foolishness. What’s worse, the preconception of women as subordinate in Mexican society is reinforced even before a visit is made to a Mexican partner. People who believe these tales will be quite surprised when they meet the CEO of a major Mexican company who happens to be a woman [3] . They will need a quick refocusing of beliefs, perhaps while the introductions are made. And as always, last minute preparations make for poor business strategy.

Another common misconception attributed to Mexican culture is the notion that Mexican people tend not hold themselves responsible for failure, due to their fatalistic cultural training and Catholic religious beliefs. While it is true that the vast majority of Mexican people are Catholic and that the Catholic Church has traditionally grounded its teachings in a fatalistic acceptance of God’s will, Mexicans are no more willing to blame God for everything than are evangelical Christians in the United States – the latter group also noted for religious beliefs that attribute day-to-day happenstance to God’s will! Heusinkfeld (1994) takes the whole fatalistic thing one step too far and demonstrates her ignorance of the Spanish language when she notes that “in Spanish, there is no active verb that allows the speaker to state flatly, ‘Pablo flunked history.’ Mexicans say, ‘The teacher flunked Pablo’” (pg. 22). While anyone who grew up in the U.S. educational system is all too familiar with the notion of “the teacher flunked me,” it is grossly offensive to observe that Mexicans simply have no other linguistic route to accept responsibility for their academic failures. The phrase is simple, yo reprobé [4] , and it is heard with surprising frequency emanating from the mouths of students at the National University after receiving the results of exams for which they did not study.

Going further along this line of thinking, but with a better grounding in reality, S. de Kras [5] (2000) makes note of the traditional Mexican inclination to look for instructions from superiors – another manifestation of the supposed Mexican fatalism. However, in her representation, she observes that such inclinations are quickly receding from the business landscape. In a pair of letters, one from an American plant manager in Mexico and the other from his immediate Mexican subordinate, she observes the different perspectives. The American notes of the Mexican managers who report to him that “it takes some effort to understand their mentality, since it appears they do not realize that always coming to me for decisions and recommendations is a reflection of their ability and that assuming direct responsibility for things is an essential part of their job” [6] (pg. 5). The Mexican manager observes the same situation differently: “I would gladly accept all responsibility and authority in my area, because that is how I was trained…. On the other hand, the older managers continue the Mexican tradition of concentrating all authority and decision-making in the hands of the general management” [7] (pg. 11). Thus, while it is true that Mexican subordinates traditionally expect a single individual to be responsible for all decision making – a truth that Licenciado Jake Flores of Casa San Antonio in Guadalajara reiterated in a discussion on doing business in Mexico >[8] – this tendency is receding [9] . In fact, Licenciado Flores makes an interesting observation, noting that while Mexican companies – those whose management and capital investment is entirely or mostly Mexican – continue to concentrate decision making authority in the hands of a single company leader, American companies in Mexico are more likely to departmentalize their operations and to empower the department heads with direct decision making authority. The now seven-year-old North America Free Trade Agreement is likely to accelerate this trend because Mexican business managers are at least as likely as their American counterparts to study the other’s business practices. While Mexican managers may not move quickly and decisively to the American model, they will certainly keep it in mind when dealing with American managers.

Nevertheless, Reed & Gray (1997) continue to observe the need to “conduct your business dealings at the highest possible level. If you open negotiations with underlings, that is probably as high a level as you will ever effectively reach [10] (pg. 19). This is not necessarily the case, and it may, in fact, create problems with business discussions. Wederspahn (1995) writes as his first recommendation to American business managers in Mexico to “never underestimate the importance of the warm-up period” (“10 Things Every Expat to Mexico Should Know”). Simply put, many Mexicans expect a certain level of cordiality in order to get to know their business colleagues. An American meeting with a lower level Mexican business manager may be meeting with this individual simply as a first stage in the business relationship. Americans who greet lower-level Mexican managers with a nothing more than an attempt to reach higher up may be left with nothing. This precise relationship showed at Empaques Modernos de Guadalajara [11] , a Mexican company that makes boxes for Grupo Modelo and other companies. Initially, our group met with one of the factory’s managers, a fairly high level gentleman but not the factory manager (and therefore not the ultimate decision maker) and probably not the highest-level manager available at the plant that day. Moreover, during our tour of the factory, several other managers attended to our group, and small sub-groups broke off with each of these managers to discuss specific functions of the factory and specific areas of the box making business. As a result of these smaller discussions and the overall interest of our group in the business of Empaques, we were invited to the factory manager’s private room at the end of the trip, where Empaques served us with refreshments. We learned later that not every group that visits is treated to this privilege; apparently we had successfully passed the warm-up stage test through our attention to detail during the tour and through the attention and opportunity we gave to each business manager that accompanied us during the visit. According to Licenciado Flores’s observations, this Mexican company would likely have all of its decision-making authority concentrated in the plant manager. Nevertheless, our discussions with the lower level managers during the tour were key to attaining the trust of the business. [12]

In any business dealing, it is a good idea to hold discussions with the decision makers, and Mexican companies are no exception to this rule. However, dealings with underlings are not only a possible part of the warm-up stage, they are extremely likely when dealing with new vendors or customers. Even though Mexican companies tend to concentrate most authority in the hands of a single individual, that individual will consult with the many people who report to him. Attempting to bypass an underling as a waste of time is foolish. Such an overt lack of respect is sure to get back to the decision maker and influence him negatively. Moreover, with the increasing presence of American companies in Mexico, increasingly numerous businesses in Mexico are empowering the so-called underlings with some decision-making control. The Mexican manager from S. de Kras (2000), described above, states unequivocally that he was trained to accept responsibility for his area. Such statements simply do not emerge from those who have been trained to defer unquestioningly to those above. Thus, the warm-up period can be an engagement with underlings that allows for a demonstration of sincere interest in and respect for both the Mexican company and the individuals charged with the initial meetings. An American business manager who successfully negotiates this stage will likely get his or her turn with the decision maker.

The notion of respect for the individual also carries over into two important areas, especially for American companies who open a foreign subsidiary or branch office in Mexico. The first of these is labor relations and the second is salary. In labor relations it is important to understand both the tendency of Mexican companies to concentrate power and the twentieth century history of the country. Workers were incorporated into the ruling post-Revolutionary Partido Revolucionario Mexicano (PRM) and later into the Partido Revolucionario Institutcional (PRI) as a formal corporate segment of the party and therefore of the government. Therefore, labor unions are not only ubiquitous in Mexico, they have real power they can exercise if they choose to do so, and labor union leaders are the ones with authority exercise the power. Much of this is evident in the practice of Mexican workers to go see their union leader if they need a special privilege approved at work, such as an extra day off. The concentration of power, however, goes back to the tradition laid down by the post-Revolutionary labor unions. Agustin (2001) notes a particular example during World War II: “On May 26 [1942], the CTM [13] , through Fidel Velasquez, proudly submitted the workers’ commitment to renounce the sacrosanct right to strike” [14] (pg. 36). While it was likely in Mexico’s best interest to put a lid on labor unrest during World War II, it was a single figurehead, Velasquez, who put forth the plan – and it was accepted without too much commotion by the labor union.

Labor union relations are important to an American business manager, however, for practical reasons. Simply put, the manager at a plant will have to deal directly with the local union leaders in order to properly run his plant. This is a bit different from the dealings with the shop stewards at a plant in the United States; often the union leader will not work directly at the plant on a day-to-day basis. S. de Kras (2000) provides a good example of how not to deal with these folks. The American plant manager in Mexico writes that he fired three workers without addressing the union leaders. As a result, “this series of events created such a scandal that the Secretary of the local union threatened a strike” [15] (pg. 6). The American plant manager could have avoided many of these problems by directing the firings through the union leader and by understanding Mexican law as it pertains to dismissals [16] . The Ley Federal de Trabajo [17] stipulates that workers who are let go be given a severance equal to three months pay plus twenty days for each year worked by the employee with few exceptions [18] . Of course the severance issue could have been resolved simply by contracting with a Mexican legal firm; by doing so, and taking advantage of the firm’s expertise in labor law and custom, other issues – that might have caused the problem with the union – could have been addressed as well.

In fact, American business managers working in Mexico are usually well represented by employing local talent. Not only does one acquire the services of someone expert in the local customs, but also the sticky issue of salary – or more specifically, salary differential – can often be avoided. In the U.S., professional salaries can be greater – far greater in some circumstances – than the corresponding professional salary in Mexico. Agustin [2001] cites an early example of this issue that cropped up in 1947 when the U.S. and Mexican governments formed a bi-national team to exterminate cattle infected with foot-and-mouth disease: “From the beginning of the campaign, there were strong protests throughout almost the entire country and strong anti-U.S. feelings were aroused, since many people were troubled by the arrogance of the American technicians and by the fact that they earned a lot more money and obtained better conditions than their Mexican counterparts for doing the same thing [19] ” (pg. 69). S. de Kras (2000) cites the same sentiment in her representation of the letter written by the Mexican manager: “Nobody in management can avoid resentment because of the huge salary difference that exists between Mr. Smith [the American manager] and us [20] ” (pg. 11). The fact remains that salaries in Mexico are smaller almost across the board when compared to salaries in the United States. A quick search of LatPro.com reveals the discrepancy. A bilingual secretary earns US$4,500 to US$15,000 per year; an operations manager, US$16,000; a sales executive, US$7,200 to US$18,000. Some jobs, such as directors and country managers get into the low six figures with their salary possibilities, but even these could easily be double or more in the U.S [21] . Thus, employing Mexicans at Mexican branch offices or subsidiaries is a very good staffing strategy because it avoids the sticky issue of salary differential. When Americans must be employed at the foreign office or subsidiary, it is a good idea to bring in those who are very familiar with Mexico, perhaps due to family ties or educational background, and who would be willing to work for a bit less in exchange for the opportunity to live and work in Mexico. If none of these strategies work, then providing repatriation bonuses at the end of the Mexican tour of duty can help compensate an American stationed at the Mexican office for his or her lower salary while actually working in Mexico.

Finally, it is extremely worthwhile to make a concerted effort to Spanish in order to be successful at doing business in Mexico. This is true even if all Mexican business partners speak English and even if there is only a small amount of time available for learning Spanish. Texas A&M University’s Real Estate Center reports about conducting business in Mexico that an “essential tip is to learn and use Spanish…. A working knowledge of the language will further business dealings” (Doing Business in Mexico, Real Estate Center). The Steven Gilbert Companies, Inc., an equipment leasing company with experience doing business in Mexico, reports that one should “try to learn at least a little Spanish, even if it is choppy or your accent is tremendously bad, and use it when you can. It's a sign of respect, a demonstration that you are interested in at least trying, and you will gain ground in the attempt -- even if the Spanish is awful” (Issue 3: Doing Business in Mexico, Steven Gilbert Companies, Inc). Both of these observations hit the mark and re-iterate the theme of the “10 Things Every Expat to Mexico Should Know,” namely respect. Respect for business partners is a good business practice anywhere, and Mexico is no exception. Moreover, given the asymmetric relationship Mexico has traditionally had with the United States – highlighted in business terms in the salary differentials discussed above – speaking even a little bit of Spanish shows an appreciation for the differences that a Mexican business partner brings to the business relationship. In discussing new language acquisition, Birner (1999) writes that “if the new language is very different from your own, it may give you some insight into another culture and another way of life.” Many might argue that English and Spanish are very similar, and in fact, the grammars are close, most of the words in both languages derive from Latin, and even the punctuation rules are almost identical. However, learning any new language brings with it the subtext of learning the culture – that is the context – in which the language is spoken. Every other theme discussed here addresses a contextual issue: salary differentials, union customs, legal practices, etc. Learning Spanish can only enhance the knowledge that a business manager brings of the Mexican context, and that, in turn, will help address all other business issues. This idea is, of course, aside from the notion of respect, but learning a new culture effectively requires a respect for that culture. The logicians out there will now be crying foul; one cannot use a circular argument to prove a point as I attempt right here. But the fact of the matter is that when learning a language, greater knowledge breeds greater respect, which in turn breeds greater knowledge. These notions are built into the context of the communication whenever you address a Mexican business partner in his or her own language.

Context, thus, matters. American business managers are well served by going into engagements with Mexican vendors or customers by learning about the history and culture of the country in which they are embarking to do business.

Bibliography

Agustin, Jose. (2001). Tragicomedia Mexicana I. Mexico City: Planeta

Birner, Betty (October 3, 1999). Does the language I speak influence the way I think? In LSA FAQ [On-line], Available: http://www.lsadc.org/web2/faq/faq.htm.

Doing Business in Mexico (May 1999). In Real Estate Center [On-line], Available: http://recenter.tamu.edu/news/48-599.html.

Heusinkveld, Paula. (1994). Inside Mexico: Living, Traveling and Doing Business in a Changing Society. New York: John Wiley & Sons, Inc.

Issue 3: Doing Business in Mexico. In Steven Gilbert Companies, Inc. [On-line], Available: http://www.sgilbertcompaniesinc.com/sgci/mexbiz1.html.

LatPro.com Find Jobs. (August 12, 2001).   In LatPro.com [On-line], Available: http://www.latpro.com/USER/JOBS/job-search.php?PHPSESSID=a13f902fc0da8657aabb9f41469f5e1b&997594302 (search engine) and http://www.latpro.com/USER/JOBS/job-search.php?pagename=job-searchForm&fMbrId=0&wreg=LA&ctry=MX&loc=315&JobFunc%5B%5D=&JobInd%5B%5D=&JobMinCompAmt=&fJsJobId=&actSearch.x=79&actSearch.y=11 (search results cited, search conducted August 2001 - current results may vary).

Ley Federal de Trabajo. In El Contribuyente [On-line], Available: http://elcontribuyente.com.mx/Leyes/LFT.htm#Artículo%2048.

Reed, Glenn and Roger Gray. (1997). How to Do Business in Mexico. Austin: University of Texas Press.

S. de Kras, Eva. (2000). Cultura Gerencial. Mexico City: Grupo Editorial Iberoamerica.

Wederspahn, Gary (1995). 10 Things Every Expat to Mexico Should Know. In Mexpress Transportation, Inc. [On-line], Available: http://www.mxpresstrans.com/busn-4.asp. Reprinted from Relocation Journal & Real Estate News.

Endnotes

[1] Emphasis is the authors’.

[2] The false observation that women become the semantic property of their husbands upon marriage is an especially offensive one to me. My wife, a Mexican woman, and I were married in Mexico City in 1994. On both her passport – obtained after the marriage – and our marriage certificate, she remained Celia Acevedo Pérez, with no “de” nor any other preposition connoting her connection to me.   When she immigrated to the U.S. later that year, the INS, no doubt in an effort to show their immense wealth of cultural sensitivity, summarily changed my wife’s name to Celia Acevedo de Stewart, reflecting both their ignorance of Mexican custom and their gross disregard for my wife’s person.

[3] It is worth noting here that the CEO of Compaq de México, S.A. de C.V. – one of the most prominent companies in Mexico (and whose U.S. parent employs me) – is a women named Bárbara Mair. Moreover the head of their Monterrey office is also a woman. This is an increasingly common occurrence in Mexico.

[4] Literally, “ yo reprobé” means “I failed” in an academic context where the result is measured by a grade.

[5] For those who observe the “de” in S. de Kras’s name and view it as a contradiction to the observation that Mexican women do not typically change their names at marriage any more, the key is to note first the “any more” – i.e. it is possible that a women who has been married for quite some time will have changed her name at a marriage that took place many years ago. Also, it is possible that in some areas that the name change still exists. Friends speak of marriages of their relatives in Chiapas (far to the south on the border with Guatemala) wherein the women acquired the “de”. Moreover, Mexico is not all of Latin America. Other countries may still preserve this ancient custom in their marriage laws. Still, a simpler explanation will suffice. Many women – and men – simply have maternal or paternal last names that include “de” as part of the name. The former presidents Carlos Salinas de Gortari and Ernesto Zedillo Ponde de León provide good examples of this.

[6] The translation is mine. The original text reads “ me cuesta trabajo entender su mentalidad, ya que parece que no se dan cuenta de que venir continuamente a que yo les dé decisiones y recomendaciones es un reflejo de su nivel de competencia y que el hacerse responsables de las cosas es parte esencial de su trabajo.”

[7] The translation is mine. The original text reads: “ Yo con mucho gusto aceptaría toda la responsabilidad de mi área, porque así fui entrenado.... Por otro lado, los gerentes de más edad siguen la tradición de concentrar toda la autoridad y la toma de decisiones en manos de la gerencia general.”

[8] The source of this is my journal notes from the speech that Lic. Flores gave to the Our Lady of the Lake students during our tour of Guadalajara July 28-August 4, 2001.

[9] It is worth noting that the 1990 edition of Cultura Gerencial makes the same observation. Thus, for contemporary business dealings, Americans who expect all decisions to be concentrated in the hands of a single individual in Mexico will likely be disappointed.

[10] Emphasis is the authors’.

[11] Empaques Modernos de Guadalajara was another business visited by the group from Our Lady of the Lake University during a trip made to Guadalajara July 28-August 4, 2001.

[12] The source of this comes from notes taken during the visit to the factory of Empaques Modernos de Guadalajara in Guadalajara during the visit made by Our Lady of the Lake University students from July 28-August 4, 2001.

[13] Confederación de Trabajadores Mexicanos Confederation of Mexican Workers – then and now the most powerful union in Mexico.

[14] The translation is mine. The original text reads, “ El 26 de mayo [de 1942] la CTM, a través de Fidel Velásquez, orgullosamente planteó el compromiso obrero de renunciar al sacrosanto derecho de huelga.”

[15] The translation is mine. The original text reads, “ toda esta serie de acontecimientos creó tal escándalo que se presentó el secretario del sindicato amenazando con emplazar a huelga.”

[16] The legal ramifications are not discussed by S. de Kras in her book.

[17] Federal Labor Law.

[18] See Ley Federal de Trabajo in El Contribuyente, http://elcontribuyente.com.mx/Leyes/LFT.htm#Artículo%2048.

[19] The translation is mine. The original text reads, “ Desde que se inició la campaña, las protestas se hicieron sentir en casi todo el país y surgió un fuerte sentimiento antiestadounidense, pues a muchos fastidiaba la prepotencia de los técnicos gringos, además del hecho de que ellos ganaron mucho más dinero y de que obtenían mejores condiciones por lo mismo que hacían sus contrapartes nacionales.”

[20] The translation is mine. The original text reads, “ nadie en la gerencia puede evitar resentimiento ante la gran diferencia salarial que existe entre el Sr. Smith y nosotros.”

[21] This is based on a search done on the LatPro.com web site at 12:50 AM on August 12, 2001.   The full URL that contains the results of the search, http://www.latpro.com/USER/JOBS/job-search.php?pagename=job-searchForm&fMbrId=0&wreg=LA&ctry=MX&loc=315&JobFunc%5B%5D=&JobInd%5B%5D=&JobMinCompAmt=&fJsJobId=&actSearch.x=79&actSearch.y=11, is also cited in the Bibliography. A search to the same URL at a later date may yield slightly different results.

Published or Updated on: January 1, 2001 by Chris Stewart © 2008
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