Friday, 4 May 2012

Happy Cinco de Mayo!

To celebrate, we're posting Christopher West's views on doing business in Mexico. To learn more, check out Christopher's book, "The Lowdown: Doing Business in Mexico"...

Q:      Is Mexico a difficult place to do business culturally? 

A: `    Usually, not at all - but you should be aware that there are at least three types of business culture, and behavior differs in each.

Firstly, there are the subsidiaries of foreign multinationals. The United States and Spain perhaps have the largest number of subsidiaries in Mexico, but there are companies belonging to multinationals from all over the globe.  Here, the culture of the HQ of the multinational usually prevails, so a subsidiary of a US company will tend to do its management accounts following US GAAP (Generally Accepted Accounting Practices), and follow US habits, perhaps starting and finishing relatively early in the day by Mexican standards and taking a buttoned-down no-nonsense approach to negotiations.  A subsidiary of a Spanish company will do its management accounts following European IFRS (International Financial Reporting Standards) and may well work later and longer hours, with a longer break at lunch time.  Senior staff will usually speak English fluently, as well as the language spoken in their corporate HQ, if it’s not English.

Secondly, there are the Mexican multinationals and larger Mexican national companies.  Some of the largest cement and glass manufacturing groups in the world are headquartered in Mexico.  These companies will typically lean toward a US way of doing business and it’s likely some of the senior executives will have postgraduate degrees from US universities. Most senior staff will speak English fluently.

Thirdly, there are the Mexican family companies. “Family” should not be taken to mean “small,” as there are some very large companies run by two or even three generations of the same family.  Such companies vary widely in culture, with some having the characteristics of multinationals, while others exhibit the traditional traits of the Mexican family-held company, such as excessive deference to family members and all important decisions (and perhaps even some that aren’t very important) being passed up the line to the head of the family.

There are two other cultural differences the visitor should be aware of:   

Firstly, salary spreads between the highest- and lowest-paid employees are much greater than is normally the case in the US or western Europe, and either because of this, or perhaps for unrelated reasons, there tends to be a greater sense of hierarchy in many Mexican companies.  Senior executives will tend to have private offices and many will have several support staff.   In the second and third business categories we talked about, don’t be surprised if the most senior people never take notes and correspond intermittently, if at all: they will want to understand the big picture and will ultimately take the decisions, but you may need to spend a considerable amount of time working on the detail with more junior people, either before gaining access to senior executives, or in parallel with your meetings with them.

Secondly, the culture varies to some degree with geographical location. The north of Mexico, bordering on the US, adopts US business practices more widely than the south, which borders on Guatemala. Not surprisingly, Mexico City, in the geographical center of the country, reflects a mid-way practice. Broadly speaking, the further north your business takes you, the more appointments you are likely to be able to fit into your working day, and the more likely you are to be negotiating with a fluent speaker of (American) English. Your visit may be squeezed in to the busy schedule of a senior executive in Monterrey, the industrial capital of Mexico, located just 100 miles from the US border, while it may be the highlight of the day of a senior executive in Mérida, in the southeast, and he may well take the trouble to show you something of the city and take you to a leisurely lunch. - Christopher West

Photo by maveric2003

No comments:

Post a Comment