Doing Business in MexicoKent Ingram, Brittany Self, Lauren Tarpley, Phillip Dahlen, John Minott, Brittany Sanford, Tyler McGinnis, Cole Taylor

Mexican Economy• Classified as a middle-upper economy.• Economy grew some 5% after 2009 recession.• Even so, 44% live below the poverty line.

Mexican Economy• Remittances—Money sent from Mexican immigrants to

Mexican natives. • $21 billion in 2010• 2nd most foreign currency obtained behind oil.

• Oil accounted for $125 billion in production per day

Mexican Economy• 13 trade agreements with 44 countries. • $300 billion in exports in 2010• Electronic and Machinery (38%)• Vehicles and Transportation (17.8%)• Mining and Crude oil (14.6%)

• 80% of exports went to the US in 2010.

Mexican Economy• Sovereign debt is investment grade with stable outlook. • Lowest among members of the OECD.

• Tourism is a large contributor.• 20 million tourists in 2010, generating around $12 billion.

• $1.04 trillion GDP (nominal) 2010.

Cultural Groups

Ethnic Composition:• 60% mestizo• 30% Indian• 9% Spanish

Cultural Groups

Regional Subcultures:• Northern Border Region• Central Region• Southeast Region• Mexico City• Area along Gulf of Mexico

Cultural Dimensions• Most important value is their focus on the people• Friends and family are of high importance • View accomplishment in terms of affiliation rather than

achievement• Machismo• The basic building block in the society is the immediate family

Cultural Dimensions• Whenever problems arise, Mexicans will try to change

themselves rather than the environment.

Workforce:• 15% agriculture• 30% industry• 55% services• 50% of total Black Market

Customs• Greetings take time and often consist of many hugs, kisses,

shakes, and pats on the back.• Gifts are typically brought to the home. It is not necessarily

appropriate to bring gifts to the business. • The Mexican Fiesta• Day of the Dead

Communication• The official language of Mexico is Spanish.• Other languages spoken are Nahuatl, Maya, Mixteco, and

Zapoteco. • Spanish and English will more than likely be intertwined in

business.• Meetings become personal after the initial introduction.

Communication• In Mexico, gestures, facial expressions, glances, posture, and

clothing are all nonverbal communicational styles• Hispanics don’t find personal space to be invasive whenever

meeting others

Conflict Style• Confrontation of conflict is dealt with indirectly• Hispanics tend to avoid confrontation

Negotiation Style• Since Mexicans are status conscious, you should bring

someone on your negotiating team who is an executive. • If you do not speak Spanish, an interpreter is needed. • Negotiations will include a fair amount of haggling. • Attorneys should not be present during negotiations, and they

will take time, so patience and flexibility are necessary.

Food & Eating Etiquette • Arrive at least 30 minutes late; arriving on time or early is

considered inappropriate. • At a large party, you may introduce yourself, but at a smaller

gathering the host handles the introductions. • During the meal, keep your hands visible by resting your wrists

on the table. • Do not sit until directed and do not begin eating until the

host/hostess begins. • Only men give toasts, and it is seen as polite to leave some

food on the plate when finished.

Mexican Business Environment-Technology

• Manufacturing and service industry comprises the majority of the economy

• Cheap labor rates attract large companies, worldwide• “Knowledge and Innovation Project”• 5 year plan enacted by Mexican government• $663 million total budget ($300 million from World Bank

• EU-Mexico Joint Committee• Joint effort between Europe and Mexico to decrease Mexican

independence on United States• 4th Pillar: “Cooperation in Science and Technology”

Distribution• Centrally Located• Ideal for distribution of manufactured goods to North America

• NAFTA• North American Free Trade Agreement• Free trade between Canada, United States, and Mexico

Ethics and Impressions of Americans

• Adopted ethics from current U.S. management practices• Recent influx of ethics• FedEx instills ethical values in their employees by cultivating trust

in unsupervised situations

Business Relationships• Emphasis on building close relationships to build trust • Respect of Culture• Assimilate to Spanish language in speech and text• Avoid prolonged eye contact• Formality is expected (Senor, Senorita, etc.)• Small gifts are acceptable, but not encouraged

Management Practices• Class differentiation culture• More loyal to individuals than companies• Build trust before making a business deal• Visit three or four times to build trust

• High Power Distance• Strong Hierarchy/vertical company structure• Those in power demonstrating care and concern for their

subordinate• Insubordinate unless strong emotional bond

Management Practices• Highly sensitive to criticism• Take their time making decisions• Like to be Compensated for work right after it is completed• Women in the workplace• Lower ranking positions• Stricter sexual code of conduct• Dress conservatively

Human Resources Practices• Obedience and respect valued• All about who you know• Incentive given daily• Currently the minimum is 62.33 pesos ($4.60) a day in zone A

(Mexico City). • The Mexican Federal Labor Law • 28 days to evaluate the employee's work ethics• Then employer assumes responsibility for the worker;• Job security is granted and termination becomes expensive

Business Practices• Business card presented at beginning of meeting• Spanish on one side, English on another• Education and experience qualifications listed• Titles important because of hierarchy value

• Monochromatic culture • Flexible with time• Deadlines don’t get made before big holidays• Willing to interrupt business for personal concerns

Business Practices• Meetings• Frequent interruptions expected

• Considered rude to turn away visitor or phone call• Slight bow to women and wait for her to extent her hand• Shake hands with men• kiss on cheeks common if you know them well.

• Gifts common in Mexico• Perfume to executive for his wife

• Shows you are thinking about the family