This is a great site to help determine possible cultural conflicts between your culture and Mexico.
It compares 4 dimensions of cultural differences; Power Distance, Individuality, UncertaintyAvoidance and Masculinity.
From the site: "Welcome to the Intercultural Business Communication tool. This simple online tool offers a great resource for people wanting to get some intercultural business communication tips when working with people from different cultures. All you do is choose your own country and another country and we produce a graph that shows the the major differences between the two cultures. You then get some insightful intercultural business communication tips for working in or with that culture."
Intercultural Business Communication Tool
It provides a comparison between the countries, and then provides tips in order to reduce or manage this cultural gap.
Intercultural Business Communication Tool - Kwintessential Language and Cultural Specialists
Geerte Hofstede, Cultural Dimensions
Monday, March 26, 2007
This is a great site to help determine possible cultural conflicts between your culture and Mexico.
Yet another Squidoo lens.
This time focused on Leon Guanajuato Mexico. Happens to be the town I’ve been living in for the past 15 years.
Leon is internationally “famous” for the shoe making and leather industry (80+% of all Mexican shoes, boots and leather goods come from Leon).
Leon is also growing due to the automotive industry and an “industrial corridor” being created between Leon and Celaya.
On top of all this, the service sector continue to expand and grow due to the population growth, the Poliforum Convention and Exhibition Center and the Poliforum Cultural Center.
I made a lens over at Squidoo that provides a good starting point for anyone beginning to analyze Mexico as a country to do business with.
Seeking hotels in Leon, Guanajuato?
For those business or pleasure travellers seeking hotel information for Leon, Guanajuato, Mexico.
Information about hotel type, address, phone and fax numbers, and the all important website address.
An inquiry from Andrzej from Poland regarding sites that provide economic data for Mexico has prompted me to provide the following links.
The official and definitive source for Mexican statistics is INEGI (the National Statistics, Geography and Information Institute). There is one little glitch however, it’s only available in Spanish INEGI Instituto Nacional de Estadisticas, Geographia y Informacion.
Another source of economic information about Mexico can be found through contacting the Mexican Embassy or Mexican Consulate in your part of the world. The Economic or Commercial Officer will be able to provide the information you are seeking. Mexican Embassies and Mexican Consulates worldwide.
ANPIC 2007. This is the annual international trade fair for leather tanning, leather chemicals, machinery and supplies for the footwear industry held in Mexico since 1980.
The “Fair of the Americas” (Feria de las Americas) is held in Leon, Guanajuato, Mexico from February 17, 2007 through February 20, 2007 at the Poliforum Exhibition Center in Leon.
Leon, Guanajuato is the leather tanning and shoe making capital of Mexico.
Visitors will find 1200 national and international suppliers of:
- Shoe machinery and equipment
- Tanning machinery and equipment
- Chemical products
- Hides and skins
- Synthetic materials and textiles
- Lasts, heels and soles
Low cost and budget airlines are finding their way to Mexico.
These new airlines are offering international flights and national flights between intermediate cities in Mexico previously only accessible through bus lines or at much higher prices via the full service airlines.
The budget minded vacation or business traveller should check out the schedules and prices of these airlines next time you are travelling in and around Mexico.
Employers in Mexico are required by law, to give employees a Christmas bonus.
The “aguinaldo” is a mandatory annual payment given in the month of December, prior to the 20th, to each worker in Mexico. This includes all employees in private industry, and all government employees.
The aguinaldo is equivalent to 15 days wages, or more. For employees with less than a years service, a pro-rated payment is provided.
This puts added strain on cash flow and accounts payables for Mexican organizations during the month of December. At the same time it creates a huge burst of economic activity throughout the country.
A comment from .hj highlighted an important issue when doing business in Mexico. He wrote ” (Mexicans) will try to deliver a message using indirect messages and almost never telling things directly for it is consider unpolite”
Etiquette and formal behaviour is expected in Mexican business negotiations, especially with international clients or suppliers. This will become more relaxed and informal over time, as the trust is reinforced and expectations are met on both sides.
It is all about mutual respect.
The formal rules and behaviours (etiquette) that enhance and create an atmosphere of respect have been broken down or eliminated in the USA, but in Mexico they are critical and very much a part of business dealings.
The Mexican business person does not like to create a confrontation or criticize openly, it is considered rude and ill mannered. One should be very perceptive to what is being said by your Mexican partner, what is being avoided and the implications of each behaviour.
One should avoid open criticism of the Mexican partner. They expect the same formality given to you, it is embarrassing and awkward if one begins to point fingers and rant and rave.
Make comments and observations about areas that need attention, strategies and solutions that must be adapted and challenges that must be met instead of criticism of past performance. Discuss what is working and what isn’t working, but don’t personalize it.
You may not hear direct criticism of an idea or proposal, instead there might be suggestions of alternatives.
Your ideas, proposals and solutions may be greeted by nodding heads and smiling faces, but it may only signify that the audience is listening, and not in complete agreement.
Decision-making on sensitive or unpopular issues may be delayed and not openly debated. Give your Mexican partner time to deal with these issues, and don’t force a decision in public.
If able to plan the meetings in advance, propose an agenda, and include the issues you need to discuss, or that require a decision. Give them time to prepare for the meeting and the decision-making required. Don’t demand a decision in an open meeting.
Lunches and informal settings are where the real business discussions and dialogues will take place, and even then, will be presented may be in a vague and non-confrontational manner. Use these moments to explain and explore the ideas, benefits and alternatives. Listen.
Present yourself and treat your business relationships as a well educated respectful gentleman, not like a threatening conquering warrior barbarian. Participate, listen and react to business situations with poise, calm and politeness.
The month of December is Mexico is filled with Christmas and holiday parties and social events.
The population of Mexico is 95%+ Christian and openly celebrates Christmas in private industry and government displays. Be aware that there are other religious groups in Mexico that do not celebrate Christmas in order to avoid offending suppliers or clients.
These Christmas and holiday reunions are usually mid-day dinners or late suppers. There will be get-togethers for friends, business acquaintances, associations and any committees or other groups that you might belong to.
There is also the company Christmas party.
Failure to attend the holiday events are noticed and considered rude. It’s better to arrive and steal away early than to avoid the reunions all together. Remember Mexico is a very socially oriented culture, failure to attend and participate in the social events will not help you, it might work against you.
Corporate and business gift giving is very important, and in many cases expected at Christmas time. The low end gifts range from the traditional; calendars and pens, agendas, calculators or other promotional type gifts to the higher end: fine liquors (Tequila, Scotch whiskey, Cognac, Red wine), fine food baskets, electronic equipment (Palms, IPods, etc.), gift certificates to restaurants, etc.
Unlike the USA, it is common in Mexico to give holiday gifts to the decision-makers in the purchasing department unless the companies have a policy against it.
Cut flowers or live plants are not considered an appropriate business gift.
Holiday gifts are given to important (and not so important) clients or to key people in the clients organization with whom you have a personal/business relationship (for example the secretary who answers all your calls or the logistics person who solves problems all year long).
Some transnational companies have tried to limit and reduce the amount and quality of business Christmas gifts in the past few years. It is not looked upon kindly by customers who always reflect upon the amount of money they have spent with the supplier, and believe the Christmas gift is a “thank you” and recognition of their support and loyalty throughout the year.
Work begins to slow down in Mexico at the beginning of December, and after December 12 (The Day of Guadalupe) efficiency grinds to a halt. It’s impossible to get major decisions, and many times difficult to locate business owners and managers due to events and social engagements.
Most Mexican businesses (not in tourist areas) are closed during the week between Christmas (Dec. 25) and the New Year (Jan 1). The Mexican government prohibits highway transport of certain goods and tractor trailers during this peak family vacation period.
Related LinksCorruption, bribes, mordidas, tips - doing business in Mexico
In order to begin to understand Mexican politics (an impossible task), it’s important to learn some fundamentals of the political system in Mexico.
- There is no re-election for political officials for the same post in Mexico. Current office holders can sit-out a term and run again for the same office, or they can run for another political post.
- The political parties control the selection of party candidates who run for office, at Federal, State and local levels. Political parties, and their leaders are very important.
- In order to be remain in politics one must please both the party and the electorate.
- The term for the President of Mexico is for 6 years, with no re-election.
- The term for State Governor is 6 years, with no re-election.
- The term for Senators is 6 years, with no re-election for a consecutive term.
- The term for the Camara de Diputados (similar to the House of Representatives in the US) is 3 years, with no re-election for a consecutive term.
- The term for local mayor is 3 years with no re-election for a consecutive term.
- The term for State representatives and local elected positions is normally 3 years, with no re-election for a consecutive term.
- Changes in the Mayor, Governor or President, cause major reshuffling of bureaucrats and administrative officials. This causes a slowdown or “unofficial” shutdown of some government offices between the election date and the date of the new administration start-up.
- The lack of re-election encourages and favors the current politicians and parties in power to seek out projects with short term visible benefits. They are pushed to show successes, infrastructure projects or other tangible benefits during their term of office in order to get promoted and elected to future political posts.
- In the Mexican states with stable, well defined political party tendencies and majorities, there is more focus on medium and long term projects and planning as the benefits can be attributed to the party.
- If selling a long term project to the government, it should include short term benefits, or tangible results, so that the politicians involved can claim credit.
- Never try and initiate the sale or negotiation of a major project to the State government during the last 6 months or year of a Governors term. It will be stalled, and you will have to “resell” it to the new administration.
- Get to know as many local and State and Federal political officials as possible, in 3 to 6 years they are all sitting in different positions of power and influence in the government.
How to tell if your Mexican banknotes are counterfeit.
The handling of foreign currency creates a whole new set of challenges for the business or vacation traveller.
The Bank of Mexico has a webpage dedicated to explaining the security features of the Mexican coins and banknotes so you don’t get bamboozled. Verifying Mexican banknote authenticity
Learn about the security features in Mexican banknotes to eliminate the possibility of receiving “funny money” during your travels.
Security features in manufactured Mexican banknotes - A quick chart to help identify the security features in the current banknotes in circulation in Mexico.
If you believe you have counterfeit Mexican currency, bring it to the attention of a Mexican bank for verification. If the banknote is counterfeit you will not be reimbursed for it’s value, but you might avoid going to jail. Passing counterfeit currency is illegal in Mexico.
The US Department of State Consular information sheet for Mexico states “ A number of Americans have been arrested for passing on counterfeit currency they had earlier received in change. If you receive what you believe to be a counterfeit bank note, bring it to the attention of Mexican law enforcement.”
I highly recommend that you download and read the Doing Business in Mexico 2007 report, released on November 15, 2006.
For anyone currently doing business in Mexico, or thinking about doing business in Mexico, this is a must read.
The World Bank Group has announced that “Doing business became easier in many Mexican states in 2005-2006, according to the new Doing Business in Mexico 2007 report, released today in Mexico City. The report finds that some states compare well with the best of the world, while others need much reform to become globally competitive.” - November 15, 2006
Quick results of the top ten Mexican states based upon the factors of; starting a business, registering property, obtaining credit, and enforcing a contract include:
- Aguascalientes, Aguascalientes (Easiest)
- Guanajuato, Celaya
- Nuevo Leon, Monterrey
- Sonora, Hermosillo
- Campeche, Campeche
- Zacatecas, Zacatecas
- Queretaro, Queretaro
- Michoacan, Morelia
- Sinaloa, Culiacan
- Mexico City (Most difficult)
A full listing of all the 31 Mexican states is available in the report.
Excerpt from the report: “If you were to open a new business in Mexico City, the start-up procedures would take 27 days on average, 8 days fewer than in Shanghai. If you decided to open a business in Guanajuato or Aguascalientes, you would have to wait 12 days—only one day longer than your competitor in Amsterdam. But if you needed to take a customer to court for a simple debt default in Guanajuato, resolving the dispute would take 304 days—far longer than the 217 days it takes in Dublin,1 but significantly shorter than in Baja California Sur where it takes 581 days. These examples illustrate two patterns. First, some Mexican states compare well with the best in the world. Second, many states need much reform to become globally competitive.”
Press release on Doing Business in Mexico 2007 (PDF, 75KB)
Doing Business in Mexico 2007 (PDF, 1.26MB)
Speeches for private industry, trade association and government events are quite common in Mexico.
- Every event is started with a speech, or number of speeches from local, state or federal government officials, association presidents or high ranking members or the corresponding private industry equivalents.
- Generally when a speech is given in Mexico to a group, formal protocol is followed.
- For larger events a professional master of ceremonies will be hired to make the speaker introductions and keep the event moving.
- Each speaker thanks and acknowledges by name and title each member sharing the stage or table of honor.
- Mention of each member should be given by rank. Highest ranking official or member first, followed by the others in descending order.
- Speeches in Mexico tend to be long. Government officials tend to give lots of numbers and statistics. Despite the audience’s desire to hear a short, focused discourse.
- It is considered rude to take cell phone calls, carry on conversations with your neighbor, crack jokes or not pay attention during the speeches. If you can’t tolerate it, excuse yourself and leave the room.
- Often invited guests and members sharing the podium do not have anything important to say, they are invited as a courtesy or as part of the political/social protocol.
- After the initial speeches are over, some government officials may leave for other events.
- Use these opportunities to network and exchange business cards. It is often easier to make initial contact with important figures at an event instead of via telephone calls and emails to their office.
Everything you want to know about Mexican monetary policy, Mexican financial and payment systems, Mexican currency, Mexican banknotes and Mexican coins can be found at the Banco de Mexico site: BANXICO English language website.
BANXICO: “Banco de México is the central Bank of Mexico. Under the Constitution, it is autonomous in its operations and management. Its main function is to provide currency to the domestic economy. In discharging this task, the Bank’s priority is to ensure the stability of the currency’s purchasing power. Its other functions are to promote both the sound development of the financial system and the optimal functioning of the payment systems.”
The BANXICO site includes detailed sections on:
Need to know what the currency and coins currently in circulation in Mexico look like? Check out the sections entitled
Purchasing from Mexico and Mexican suppliers?
Don Gringo at Catemaco News and Commentary brought these items to our attention.
Sourcing in Mexico gets easier. The article points out that doing business with Mexico is easier than in the past.
- The proximity of Mexico to the US markets impacts communication, logistics, costs and time factors.
- Mexico has a history of dealing with the US, and are familiar with competitive manufacturing techniques.
- Relationships are critical to success.
- Beware of stereotypes.
- Take the time to find the “right” partner.
- Do’s and don’ts for doing business in Mexico
Does your supply chain strategy include Mexico? It should. Al Brown president of SupplyMex writes that Mexico offers:
- Logistics infrastructure, highways, rail and port system that has been improved over the past 10 years.
- Free trade agreements with 42 countries.
- Global production and quality standards.
- Stable political and economic environment.
- Skilled workforce.
Corruption in Mexico
Quite a bit of interest generated from the piece regarding corruption and bribery in Mexico. Corruption, bribes, mordidas, tips - Doing Business in Mexico
Don Gringo says “Mexico possibly has one of the best governments anyone could buy. And cheap, too.” Catemaco News and Commentary
Bernard Wasow writes in the Globalist “It is no secret that the at law enforcement in Mexico is a “for-profit” business.” Greasing Palms: Corruption in Mexico.
Wide Angle presents a Corruption Chart; How big is Mexico’s problem. Which gives a great state by state overview and comparison of corruption levels in Mexico.
A quote from the page: “According to anti-corruption czar Francisco Barrio, the cost of corruption by government officials and by everyday Mexicans surpassed the amount budgeted for education by more than three percentage points — some 9.5 percent of Mexico’s GDP of $550 billion. Recent studies by the World Economic Forum, an international organization that works to improve worldwide economic conditions, found that the business environment such as rule of law, transparency and corruption were disincentives for foreign investment in Mexico. Corruption, which is often described as a tax, adds to the cost of doing business. The Opacity Index, a study conducted by Pricewaterhouse Coopers, found that Mexico lost $8.5 billion in foreign direct investments in 1999 due to corruption and other suspect legal or economic practices.”
Corruption exists in every country in the world, in politics, in business, in everyday life. In some countries it’s more sophisticated or hidden, in others it’s obvious and required in order to get things done. Mexico is no exception.
People seem to ignore corruption in their own countries, and react with shock and anger to corruption in others.
Depending on where you live in Mexico, what you are trying to do, and who you are dealing with, your experience with corruption and bribery will not echo anyone else.
Evaluation of Mexico, China, Brazil, India or any other country as a potential business location or market should include an analysis of how corruption will threaten and affect your operations, efficiency and bottom line.
Your organization should have a clear understanding of the situation and create a set of rules governing how to deal with the reality and any situations that might arise.
You have to ask and answer the question, “do I want my organization to participate and be involved in corruption and bribery, and at what levels”?
Get advice and information from local businesspeople and consultants on the reality of corruption and bribery. Learn how the culture deals with it, detects it and punishes it before you commit to a strategy, path or action plan.
Have any questions about how to do business in Mexico?
Any specific problems or dilemmas related to doing business in Mexico?
Questions about the business culture in Mexico or Mexican culture in general?
Would you like to know more about a specific theme related to Mexican business?
Need references or information about organizations, people or associations in Mexico?
Send your questions to me at lee.iwan at gmail.com
or post a comment here.
When doing business in Mexico, one of the fundamental complaints I hear from non-Mexican business people is the speed at which business in transacted.
They say there are 5 speeds to the Mexican economy, I believe they also apply to negotiations in Mexico.
4. Going in reverse.
It can be quite frustrating, but it is part of Mexican business culture.
There are several options available that may help speed up the decision-making process in Mexico.
- Make certain you are both working for the same goal. Write it down, discuss it, and determine that everyone is seeking the same thing. There should not be any hidden agendas.
- Set fixed and specific dates when the data or information must be available or the decision will be made. Get personal commitments from the other participants. Don’t settle for vague answers, get them to agree in public to bring the specific data or make the decision on a specific date. Personal, not institutional responsibility.
- Does everyone have all the information required to make the decision? Write down what is missing and assign responsible parties and dates for completion.
- Follow-up with phone calls and written communication and verify that everything is running on schedule. You will have to dedicate more time to “motivating” or “prodding” than you are used to in your own country.
- Don’t get angry. If there is no decision it is because of a reason you don’t understand or hasn’t been verbalized. Anger is seen as threatening, and not part of a good relationship, it will hurt you more than help you.
- Be patient. It always takes longer than you think it will.
- Keep up the communications, in fact increase them. Contact all the team members involved, try and discuss the project or decision informally (outside of the office or work environment).
- It might be the money. When everything looks perfect, and still no decision, it might be due to money (or lack of it). Try and discuss this privately with the head decision-maker.
- It might be the risk or control involved. Bring the subject out in the open and discuss the risks and control issues involved for both sides. This is best done informally with the team members, one on one.
- It might be NO. Mexicans do not like to say no or give bad news in certain situations. They believe it is impolite, and many times will not respond or will allow the situation to continue until it fades away without a “yes or no” decision being made.
Related LinksHow to do business in Mexico
The term “Gringo” is used in Mexico to refer to Americans. Depending upon it’s use (and user) it may or may not be an insult.
My experience with the term in Mexico is that it is a convenient way to refer to Americans, much shorter that “Americano” or “Norte Americano”. Most of the time it’s use is not offensive or meant as a derogatory or demeaning remark.
Many Mexicans will not use the term around Americans thinking that it might offend. Even after establishing friendships when the term “Gringo” is used, often someone will apologize.
Where did the term originate? There are several stories, urban myths and rumours:
From Wikipedia: “A recurring false etymology for the derivation of gringo states that it originated during the Mexican-American War of 1846-48. It has been claimed that Gringo comes from “green coat” and was used in reference to the American soldiers and the green color of their uniforms. Yet another story, from Mexico, holds that Mexicans with knowledge of the English language used to write “greens go home” on street walls referring to the color of the uniforms of the invading army; subsequently, it became a common habitual action for the rest of the population to yell “green go” whenever U.S. soldiers passed by. This is an example of an invented explanation, because gringo was used in Spanish long before the war and during the Mexican-American War. Additionally, the U.S. Army did not use green uniforms at the time, but blue ones.
Another legend maintains that one of two songs – either “Green Grow the Lilacs” or “Green Grow the Rushes, O” – was popular at the time and that Mexicans heard the invading U.S. troops singing “Green grow…” and contracted this into gringo.
From the Snopes Urban Legends Reference Pages: “Although the first recorded use of “gringo” in English dates from 1849 (when John Woodhouse Audubon, the son of the famous nature artist, wrote that “We were hooted and shouted at as we passed through, and called ‘Gringoes’”), the word was known in Spanish well before the Mexican-American War. According to Rawson, the Diccionario Castellano of 1787 noted that in Malaga “foreigners who have a certain type of accent which keeps them from speaking Spanish easily and naturally” were referred to as gringos, and the same term was used in Madrid, particularly for the Irish.
The true origin of gringo is most likely that it came from griego, the Spanish word for “Greek.” In Spanish, as in English, something difficult or impossible to understand is referred to as being Greek: We say “It’s Greek to me,” just as in Spanish an incomprehensible person is said to hablar en griego (i.e., “speak in Greek”).”
According to the Real Academia Española (the ultimate reference for the Spanish language): 1. Adjective: Foreigner, especially one who speaks English, in general one who speaks a language other than Spanish. 2. Foreigner 3. In Mexico, Cuba, El Salvador, Honduras, and Nicaragua an American 4. In Bolivia, Honduras, Nicaragua and Peru a blond fair skinned person 5. Unintelligible language
There are perceptions and realities associated with bribery and corruption when doing business in Mexico.
Corruption, bribery, “mordidas” (translated as “bites”, but are actually bribes) and tips are part of Mexico and the foreigner’s perception of Mexico.
It’s a difficult subject to address because it involves ethical and moral decisions for the foreign visitor or business person. What is culturally OK in Mexico, may be seen as immoral and corrupt by an individual from another country.
Historically, corruption in Mexico is blamed upon the Spanish conquistadors. While corruption no doubt existed prior to the Spanish conquest, they certainly did institutionalize it in government and throughout the Mexican (and Latin American) culture.
Today corruption, bribery and tipping occur at all levels of Mexican society and at many different degrees. For one reason or another it has become part of daily life. Most of it involves small sums of money, and is thought of as tipping and not as a bribe.
In fact, to eliminate corruption in Mexico overnight is unrealistic and would probably result in chaos. As some Mexican observers have noted, “La mordida” is the grease that makes the system work.
All of the following might occur in Mexico. Which of the following are acts of corruption or bribery? Which are totally unethical, somewhat unethical, and no big deal? Which of these events occurs in your country ?
- The garbage collectors come by every 2 weeks, rings the doorbell and ask for money for a soft drink, US $1 or $2.
- While waiting in a long line, someone comes up to you and asks if you would like to avoid the line and be attended right away. It will cost US $ 5 to US $ 10, and save you 2 hours.
- Your application for a permit/license has been in the government office for several weeks, and no one seems to be able to tell you what is wrong. The secretary asks if you would like to buy a raffle ticket for some organization. After buying the ticket the application suddenly appears.
- You visit a local political leader and take him to dinner and a theater event to discuss your project.
- At holiday time, you send gifts to politicians, suppliers and business associates.
- Your daughter copies exam answers from another student at school.
- The police stop you for a traffic violation (which may or may not have occurred). They suggest that for US $ 20 or $ 50 you can make it disappear, and you’ll be on your way in 5 minutes.
- You need government agency approvals for your business project. In order to make sure everything is done correctly, you hire an official in the department as a consultant.
- You require a zoning change on a piece of land, you invite a government official to participate as an investor in the project, or perhaps give him some shares.
- Your son or daughter wants to get into a nightclub, the doorman says no. They give him US $ 5 and walk right in.
- A city inspector finds code violations in your restaurant. A call to a family member, who knows someone, who knows someone, results in the violations being revoked.
- A drug enforcement agent receives a phone call that tells him to choose between accepting USD $ 20,000 payment this year to let a drug shipment go by unharmed or to have his children shot.
- Your immigration papers are not quite right. There is a document missing. You are able to convince the official (though words and tears) to “overlook” the situation, no money is exchanged.
Can you live and work in Mexico and not pay bribes? Yes. (I’m lived and worked in Mexico over the past 14 years and have never paid a “mordida” in my private or business life.)
Are bribes necessary for doing business in Mexico? I think it depends on the circumstances. Most business can be done without them. It depends on you, and your evaluation of the situation. There must be certain areas where influence peddling, and “mordidas” are an integral part of the business, and other areas where it’s not required in the least. This is not unique to Mexico.
All Mexican local, state and federal governments and government agencies are not corrupt. In fact, in the past 10 years there have been great advances in transparency in government, including guarantees for the time involved in processing applications and permissions.
Mexican federal public policy and local and state governments have been actively reducing and eliminating institutionalized corruption and penalizing government workers involved in illegal acts. There is still a long way to go before it’s completely eliminated, but there has been a noticeable change in many areas.
Mexico’s poverty, unequal distribution of wealth, history and culture make it difficult to eradicate corruption overnight. Mexico is a country with many laws, but they are not well enforced. It’s similar to the temptation one might feel on the lonely country road at 3:00 AM and confronting a red light…..do you stop…or run through it?
You should develop and hold firm to your own ethical and moral principals in order to live and do business in Mexico. If you don’t do it at home, why would you do it in Mexico?
Your company should have a clear policy about corruption and bribery, and hold to it when doing business in Mexico, or internationally.
If you have any personal experiences or observations about corruption, bribery, mordidas and doing business in Mexico, please write me or comment here.
Interesting look at perceived corruption worldwide.
Transparency International has released their 2006 index of corruption perception on November 6, 2006.
Mexico lands at number 70 on the list, which puts it close to the middle of the pack out of a total of 163 countries.
” Since 1995, Transparency International has published an annual Index of perception of corruption ordering the countries of the world according to “the degree to which corruption is perceived to exist among public officials and politicians“. The organization defines corruption as “the abuse of public office for private gain. ” - excerpt from Wikipedia Corruption Perception Index.
“As this index is based on polls, the results are subjective and are less reliable for countries with fewer sources. Also, what is legally defined, or perceived, to be corruption differs between jurisdictions: a political donation legal in some jurisdiction may be illegal in another; a matter viewed as acceptable tipping in one country may be viewed as bribery in another. Thus the poll results must be understood quite specifically as measuring public perception rather than being an objective measure of corruption.
Statistics like this are necessarily imprecise; statistics from different years are not necessarily comparable.” - Wikipedia Corruption Perception Index.
The State of Guanajuato, Mexico has over 572 companies with foreign capital registered and located in the state.
49% of these foreign companies in Guanajuato are involved in manufacturing, and 29% are commercial operations which together represent an investment greater than 1,000,000,000 (one billion US dollars).
Due to changes in laws regarding foreign investment in Mexico (in 1993, 1995, 2001), 90% of all economic activities in Mexico are completely open to foreign participation and investment.
Mexico’s growing national economy, free trade agreements with 32 countries and geographic location provide great economic and logistics advantages to companies opening operations in Mexico.
In Guanajuato, 50% of all the foreign companies are located in the city of Leon (281), followed by Irapuato (71) Celaya (52), San Miguel Allende (31), Silao (26), San Francisco del Rincon (25), Guanajuato (19) and the rest (67) throughout the state.
Guanajuato occupies the first position for foreign investment of the all the Mexican states in the North-Central region.
Principal industries in Guanajuato that received direct foreign investment include:
- The automotive industry received US $ 874.2 million
- Processed food industry (concentrates, preserved products) received US $ 99.1 million
- Manufacture of paper, cellulose and derivatives received US $ 18.9 million
- Commerce of non-agricultural items received US $ 17.3 million
- Chemical manufacturing received US $ 15.9 million
- Clothing manufacturing received US $ 7.5 million
- Textile manufacturing received US $ 5.2 million
- Plastics manufacturing received US $ 5.4 million
- Food products received US $ 4.8 million
Who has invested in the State of Guanajuato, Mexico:
Country…. Investment (Millions of US dollars)…… %
United States of America……..1’ 009, 214.00………..92.7
Total: USD $ 1’ 088, 882.70 (Millions)
Good news for Mexico and Mexican business.
The IMF (International Monetary Fund) released their Regional Economic Outlook: Western Hemisphere on November 2, 2006.
They are predicting a 4.4% growth rate for this year and strong indicators for medium term growth due to a strong financial sector in the country.
Get the entire report here: IMF - Regional Economic Outlook: Western Hemisphere (pdf file)
Starting today, November 4, 2006 there are changes on how to dial to cellular phones in Mexico.
The program called “El que llama paga”, which means “whoever calls, pays for the call”, allows you to call any cellular phone in Mexico and the recipient of the call does not have to pay. Previously the cost of the call was shared between both parties.
If calling Mexico from out of the country (International long distance):
- To a fixed landline phone: the exit code of the country (in the USA - “011″) + 52 + area code + telephone number
- To a Mexican cellular phone: the exit code of the country (in the USA - “011″) + 52 + 1 + area code + telephone number
If in Mexico, calling from a fixed landline phone to a Mexican cellular phone
- To a cellular phone in the same city: 044 + area code + telephone number
- To a cellular phone in another city: 045 + area code + telephone number
- To a Nextel of the same city: telephone number
- To a Nextel of another city: 01 + area code + telephone number
- From a fixed landline that is NOT Telmex to a cellular phone of another city: 01 + area code + telephone number
If in Mexico, dialing from a cellular phone
- To a fixed landline in the same city: telephone number
- To a fixed landline in another city: 01 + area code + telephone number
- To a cellular telephone in the same city: area code + telephone number
- To a cellular telephone in another city: 045 + area code + telephone number
- To a NEXTEL: telephone number
- To a NEXTEL in another city: 01 + area code + telephone number
The use of business titles in Mexican business life is important.
Most people with professional degrees are addressed using their professional title. This is especially true in written communication. Failure to do so can be seen as lack of education and offensive.
Until you get to know a person, always use the professional title or full name, never address them by their first name until it is clear that they are comfortable with this.
You can ask how they wish to be addressed if unsure. It’s better to make a mistake on the side of formality.
Some titles are general, and when in doubt regarding the professional title, you should use these:
- Joven - refers to any young man from birth to adolescent.
- Señor (Sr.) - refers to any male older than an adolescent.
- Don - a term of great respect used to recognize older males.
- Señorita (Srta.) - refers to any unmarried female. Once a woman is above a certain age, she is referred to as Señora, even if unmarried.
- Señora (Sra.) - refers to any married or widowed woman.
- Doña - a term of great respect used to recognize older females.
- Doctor (Dr.) masculine, or Doctora (Dra.) feminine - Refers to anyone with a PhD. or Medical Doctors degree.
- Licenciado (Lic.) masculine, or Licenciada (Lic.) feminine - refers to anyone with a law degree (most common usage) or Bachelor’s Degree.
- Contador Publico (C.P.) - refers to anyone with a public accounting degree.
- Ingeniero (Ing.) - refers to someone with an engineering degree.
- Arquitecto (Arq.) - Refers to anyone with an arquitectural degree.
- Diputado (Dip.) masculine, or Diputada (Dip.) feminine - refers to a publicly elected official equivalent to Federal, State or Local representative in the USA.
When doing business in Mexico you are very likely to see some, or all, of the following during a business trip. It’s part of the Mexican business and social culture.
- Late arrival for meetings by participants. This might be up to 30 to 45 minutes late.
- Cancellations at the last minute.
- Changes in agreed upon plans and agendas.
- Long lunches or dinners, where business talk is not the major theme.
- Meetings that seem to go on for a long time before coming to the business issue.
- People will gesture and use their hands a great deal while speaking.
- There will be a degree of emotion in business discussions and presentations.
- People will be very formal and polite.
- People will sit very close to you when speaking, and often touch your arm or shoulder while talking.
- Your Mexican partners will not be forth coming and explicit regarding bad news.
- You will not hear the word NO a lot.
- Deadlines may not be met for reasons that you don’t understand or don’t believe.
- Until you establish a social relationship with your Mexican business partners, your business discussions will seem very vague, cold and unsatisfying.
- Decision-making may be extremely swift or excruciatingly slow. You never will know why.
- Dinners, parties, weddings and social gatherings last for hours. There is no such thing as a 2 hour cocktail party.
- You will be encouraged to eat everything, drink plenty and enjoy yourself while in Mexico. Failure to do this is seen as a refusal of hospitality or a sign that you are not comfortable in Mexico or with your hosts.
- In a social gathering the men will tend to congregate in one part of the room or table and the women in the other.
Good advice for international travellers, on how to avoid being seen as the “ugly American”. Are you the ugly American by Erin Richards, Budget Travel.
Remember that every action, comment, reaction, criticism and gesture is being watched and evaluated by your hosts, counterparts and clients when you are in their country.
Look for and work to find the similarities in your cultures and interests.
Humility and and stopping to think before acting will go a long way toward improving your relationships and international cultural and social skills.
To successfully work with Mexico one must understand some fundamental truths inherent in the country and culture.
Patience and Chaos are important factors in understanding the people, culture and history.
Mexicans are patient people. The have great tolerance for human error. They run on a schedule that is influenced by work concerns, family concerns, their own mental health, and takes into consideration outside factors and influences that might interfere with their plans.
This is not to say that Mexicans are never in a hurry, or are willing to accept poor quality, or like to move slowly.
What it means is that they are not overly disturbed and motivated to emotional outbursts and threats if something gets in their way, or does not go as planned. They patiently seek a solution, and if no solution is present, they accept the reality of the situation.
Chaos is part of Mexican culture and society. Lack of long term planning is quite common (at government, business, personal levels), and everything gets done at the last minute. The curious part is that everything DOES get done.
This chaos and disorganization draws strong criticism from individuals used to order, control, planning and expected outcomes in their own countries. Remember that it is a characteristic of Mexico, not good, not bad, just different.
Living in a chaotic environment allows the Mexicans to rapidly adapt to any situation, take advantages of opportunities quickly, and survive quite well in a every changing world.
There is spontaneity in Mexico. Social engagements are arranged at a moments notice, or simply just happen, unplanned and casually. Things just happen. Expect last minute changes in plans, events, and agendas. “Expect the unexpected” is great advice.
Not surprisingly, Mexico is a country where social relationships and social networks are extremely important. These personal bonds and relationships, which are reinforced constantly, help to creat order and get things done.
As is the case of all stereotypes, these observations are broad based and may, or may not, have any validity.
Manufacturers are returning to Mexico after “experimenting” in the Asia Pacific region. Some of the big reasons for this return are ; to reduce time to market, eliminate the financial costs of inventories in transit, lower the logistics costs, and to strengthen the supply chain by moving closer to just-in-time deliveries.
But moving to Mexico isn’t going to solve all the problems.
A September 2006 article in CFO magazine points out how US businesses are increasing safety stocks “just in case”. Delayed in the USA The article points out how supply chain disruptions are being provoked by an increasingly saturated US highway system and bottlenecks in deepwater ports and railyards.
The good news is that Mexico is close to the USA, a truckload of goods can leave any point in Mexico and arrive at the US destination in as little as 4-5 days. The railyards and new multimodal Interior Port in Guanajuato, Mexico allow manufacturers to establish production facilities in the interior of the country. Exporters can now clear customs and load the sealed container onto the rail-car at the new (2006) high capacity Customs port located in the geographic center of Mexico.
The bad news is that unless the US begins to upgrade their highway, port and rail facilities, supply chain managers in the US will be buying and storing higher levels of inventory to assure continuity of operations, “just in case”.
Immigration control is a global challenge, and yet not one developed country has developed a good workable and acceptable legal immigration plan that eliminates illegal immigration.
There are political solutions, and then there are real solutions.
Immigration between nations occurs when there are marked differences in economic wealth or living conditions between two regions. In order to eliminate massive immigration, wealth (and it’s distribution) of the economically disadvantaged country must improve or the wealthier country must lose it’s wealth.
The long-term solution to immigration will be found in changing economic conditions, policies and the creation of opportunities in the disadvantaged country.
A short-term solution will be found by building walls and increasing border enforcement (This is effective where the border areas are limited and can be totally controlled).
The current immigration situation between Mexico and the US has become a political football, and it appears political solutions are all that matter.
It’s time for both countries to work and invest in real, long-term economic solutions to solve fundamental problems in order to help and protect both countries. The US is facing a problem, and Mexico should assist their neighbor in finding solutions.
The Mexican perspective:
- There are many opportunities and jobs available that pay much better than in Mexico.
- There are no jobs available in Mexico for the majority of immigrants.
- Going to the US is a “rite of passage” for many Mexicans in certain areas. Most return to Mexico after 3 - 5 years.
- Many cross the border illegally to meet family members already in the US, and have jobs waiting for them once they arrive. Most immigrants have jobs in the US.
- Most of the immigrants come from rural areas in Mexico, with low levels of education.
- Mexican immigrants in the US send enormous sums of money to support family members in Mexico. Petroleum sales bring Mexico the most foreign currency income, followed by money sent by Mexicans in the USA (not all illegal immigrants) to family in Mexico.
- For many Mexican state governments, this injection of foreign capital is very important for maintaining local economies.
- Crossing the border illegally is dangerous and life threatening, and in many cases expensive.
- US employers are open and supportive to employing illegal immigrants, and in many cases provide false identification and protection to the workers.
- The majority of the millions of illegal immigrants currently in the US are working, and spending money in the local US economies.
- The legal immigration mechanisms available (visas) reject those who are economically disadvantaged (the ones with the highest need to immigrate).
- Mexicans believe that the US has the sovereign right to restrict and control immigration.
- They would like to see a realistic legal migration program created.
- The immigrants in the US pay sales taxes, and they consume goods and services in the US.
The US perspective
- Illegal immigration takes jobs away from US citizens.
- Illegal immigrants use social, health and welfare services paid for by US taxpayers.
- Illegal immigrants bring crime, drugs and violence to communities.
- Illegal immigrants don’t speak English and don’t learn English, and are forcing communities to spend money on bilingual teachers and government programs.
- Illegal immigration can be stopped by building a wall or by enforcing the border.
- Illegal immigrants don’t pay taxes.
- US agricultural businesses cannot survive with competitive prices if illegal workers are eliminated. Legal immigration will increase labor costs.
- Elimination of illegal immigrants will cause substantial increases in the costs of food, restaurants, hotels, construction and certain consumer and industrial goods and services. Immigrant labor is needed to maintain the US economy.
- The US Border Control has stated many times that the solution is in enforcing and penalizing US employers that hire illegal workers, not by penalizing and deporting the illegal immigrant.
- The US government and state governments understand the economic situation and provide political solutions for voters, but understand that the total elimination of immigration would severely hurt the US economy. A legal immigration solution must be implemented.
- There is a fundamental dilema. America is the land made of immigrants, and yet now must begin to control this immigration. Huge uncontrolled borders, wealth and opportunity, and willingness of employers to hire undocumented workers combine to make the US an attractive immigration destination.
Opportunities and possible solutions
If we agree that the illegal immigration problem is a consequence of economic situations and differences in the distribution of wealth, then the following ideas are possible solutions. None of them are easy, all of them have costs, but they are the only real long-term solutions to the immigration situation.
- US government and businesses coordinate with the Mexican government and business sector to invest in economic development projects in the areas in Mexico with the highest degree of poverty and immigration.
- The Mexican government must aggressively work and invest in order to improve opportunities and wealth in their country, especially for the economically disadvantaged.
- US businesses push for immigration reform that allows for temporary workers and legal immigration. The program would increase costs to the US employers, and the workers would be paying taxes.
- US government makes laws and enforces them against US employers that hire illegal immigrants.
- US government finds a method to legalize current immigrants that have been and are working in the US.