Background To Business In Mexico

The old saying of never confuse geographic proximity with cultural proximity was probably never more true than when trying to compare Mexico with its larger neighbour, the United States.

More than a border separates the two countries and although the economic importance of the USA to Mexico cannot be overstated (80% of Mexican exports are bound for the USA), Mexico is a country unique unto itself with a very distinct approach and business outlook.

Just as it is never a good idea to confuse Canadians with people from the USA, it is just as bad to assume Mexicans will be similar to North Americans. (Mexicans are also Americans, as they will point out to you.)

Thus, although the USA has a large influence, both economically and politically, on the development of Mexico it is a very good idea to do some research into the ingredients that make the country so radically different the other two North American countries before trying to do business there.

The biggest influence US business culture has on Mexico is probably in the large number of US multi-nationals who operate in the country and the business processes which follow in their wake. When working in Mexico, it is essential to find out which type of company you will be working with. Are you liaising with the subsidiary of a foreign-owned multi-national or with a locally owned and controlled firm? This will obviously impact on such areas as business structures and decision making — but less so on issues such as team working and communication styles.

It is also probably true to say that the biggest single significant difference in approach to business between Mexico and the USA would be the much greater emphasis placed on the value of personal relationships within the business cycle. Mexico is definitely a country where relationships need to be firmly in place before significant business will follow.

A brief overview of some key concepts to consider when doing business in Mexico

Written and Produced by Keith Warburton

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Overview

As part of the world’s largest trading block (NAFTA), Mexico must be an attractive potential market. It is strategically positioned between North and South America and as such is a great base for further expansion in the region. In addition, Mexico has negotiated a strategic network of free trade agreements which give it preferential access at least 46 countries with a combined population of in excess of one billion people.

Whilst Mexico does represent an attractive market entry proposition and doing business in Mexico is likely to bring rewards, there are several impediments which need to be taken into consideration. Bribery and corruption remain a problem – although progress is being made in this area – and organised crime still poses a serious threat both in the cities and the regions. Mexico could also be considered a little too dependent on the robustness of the US economy – if the States is doing well, Mexico is usually flourishing as well.

However, one of the key considerations you need to factor in when looking at doing business in Mexico is the local business Culture. Mexico might have a border with the USA but their business cultures are poles apart. Whereas the USA puts business firmly before relationships in business dealings, Mexico is the exact opposite. In a strongly hierarchical culture, who you know and how well you know them are absolutely critical to success. You need to forge great relationship and you need to know how to forge those relationship. Take the time to make the right type of contact and you will be rewarded.

This country profile provides an overview of some of the key aspects of Mexican business culture in a concise, easy to follow-format. The document includes information on:

  • Background to business
  • Business Structures
  • Management style
  • Meetings
  • Teamwork
  • Communication
  • Women in business
  • Entertaining
  • Top tips