Today’s post, which is partially based on materials from Dick Locke’s seminars on International Purchasing, is edited by Dick Locke, Sourcing Innovation contributor and President of Global Procurement Group.
This post is going to examine some of the cultural differences that you may encounter (as an American or Canadian Sourcing / Procurement Professional) if you are doing business with Mexico. We start by discussing each of the eight key cultural considerations outlined in our introductory post and then highlight a few other points that you should be aware of.
As per our initial post, this discussion is high-level and general in nature and, as Dick Locke points out in his classic text on Global Supply Management, while it is too easy to stereotype a country, individuals in each country will vary from the stereotype. You need to take time to get to know the people you will be dealing with because their behavior may be nothing like the usual behavior of the country in which they reside and there is always a chance that you might run into people who are trained to act like you … while in your presence.
- Power Distance
In Hofstede’s classic text on Culture’s Consequences, International Differences in Work-Related Values, Mexico is the country with the highest power difference which indicates there are severe differences in power and influences between those at the top and those at the bottom. The leader is in charge, and everyone will defer to him. This means that you need to direct your questions at the leader, and not the interpreter, and that you should not direct questions at domain experts or subordinates unless specifically referred to them.
- Uncertainty Avoidance
Mexico also ranked quite high on Hofstede’s uncertainty avoidance scale, which indicates that they generally don’t like uncertainty. However, Locke who disputes Hofstede’s contention to some degree, finds Mexican factories very flexible in schedule and points out some low uncertainty-avoidance characteristics of Mexico, such as a lack of a standardized format for telephone numbers. What this means is that while larger companies who have been doing business with the US for years will be used to uncertainty, and will not have that much of a problem with it if you have already established a good working relationship with the company, if you are trying to engage a new partner, especially a smaller company who has not done much business outside of Mexico, you should be prepared for a great deal of hesitation if you can’t specify what you want, when you want it, and in what quantity (just in case).
Mexico ranked quite low in Hofstede’s individualism scale. While this may appear to be true when you are dealing with those companies where the power distance is high, you will find that younger generations in Mexico’s larger cities, especially those that are near the border or where there is a fair concentration of wealth, are a lot more individualistic as they have incorporated a lot of the youth culture from their northern neighbor over the past three decades. Furthermore, your average Mexican places a lot more importance on the uniqueness of the individual than Hofstede gave them credit for.
- Polychronic vs. Monochronic Time
Mexico, as per Hofstede’s classic work, was traditionally an authoritarian polychronic culture, but the pre-China manufacturing boom brought with it a heavily monochronic influence to the Mexican workplace. As a result, you might just find that a duality of cultures exists in your potential trading partner. While the plant will likely exhibit a monochronic culture thanks to decades of American influence, at least during your visit, the head office will likely retain the classic polychronic culture because punctuality is not high on the list of Mexican priorities.
- Personal / Impersonal
Mexicans are very personal and they prefer to do business with others who are highly personal. Between trusted parties, a handshake on a relationship is often all that is needed to seal a business arrangement. Note the use of the word “trusted”. By default, the Yanqui, who they naturally distrust, will not be a trusted party and you will need to sign on the dotted line before they start to do business with you.
- Buyer / Seller Rank
While you’ll generally have a higher “rank” than the seller, today, this really comes down to the relative state of the economy. Money talks, especially if it talks with respect. However, don’t expect emails from strangers to be returned, due to the highly personal nature of the country.
- Importance of Harmony
Due to the significant number of western values Mexico has adopted, harmony in the workplace is nowhere near as important as it is in some Asian countries. However, Mexico, which has the most Indian-oriented mindset among the major American countries, has a strong national honor, obedience to authority, an acceptance of the stratification of their society, and a group loyalty. As a result, you will likely encounter a significant desire for harmony in your relationship.
- Importance of Face
Personal dignity is of high value in Mexico, a country where the Aztec legacy and Yanqui trauma are ever-present realities and where Christianity holds sway over at least 95% of the population. As a result, you’ll find that Mexico is one of the few non-Asian countries where a core cultural value is to save face at all costs.
One point that is important to note when doing business with Mexico is appropriately summed up in Richard D. Lewis’ When Cultures Collide. While the Mexican gives freely to his guest, conducting business and obtaining many social services incure a cost which is normally obviated in U.S. and Northern European societies. Mexican civil servants, officials, and police are paid very little and usually seek to augment their meager salaries by accepting what Americans call bribes to facilitate the granting of permits and other services. In other words, time to have a detailed discussion with your legal counsel about what “facilitation payments” are acceptable (and what records you’ll need to keep)!
Other points to note is that while most Mexicans are generally very courteous and polite listeners, they are also very suspicious of Americans. Don’t try to blow though the friendly small talk that will precede your business meetings. Let them get to know you and only get down to business when the time feels right. And if you truly want to profit, go for a win-win relationship.
As a matter of courtesy, if you are from the U.S., try to avoid calling yourself “American” as if it’s different from “Mexican”. America is a continent in Mexican geography. We share it with other Americans.
Finally, as I strongly recommended in my first post, if you plan to start doing business with any new international country, including Mexico, you should do a thorough job on your homework. You can start with:
- Dick Locke’s course on the Basics of Smart International Procurement (which is offered through Next Level Purchasing and counts towards the SPSM2 certification or ISM Continuing Education Hours), or
- a customized seminar from Dick Locke’s Global Procurement Group. Dick Locke and his associates each have decades of experience doing business with over two dozen countries, including the fifteen biggest importers and exporters to and from the United States, and Mexico. A single day with an expert like Dick Locke could save you months of headaches.
Again, a big thank you to Dick Locke for serving as editor for this special series of posts and providing some up-to-date materials and information for the purpose of this series.