MEXICO REPORT - Quản trị đa văn hóa - Văn hóa kinh doanh của Mexico

Distribution of the gross domestic product GDP across economic sectors from 2009 to 2019.. To have a better understanding of this North American country, our team analyzed the culture of

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Phạm Ngọc Yến Trang K194101490

NAME OF THESIS:

“DIFFERENCES IN NATIONAL BUSINESS CULRURE OF MEXICO”

Lecture: MAS Ngô Thanh Trà Ho Chi Minh 6 April 2021

INTRODUCTION 1

CHAPTER 1: BRIEF INTRODUCTION OF MEXICO 1

1.1 Geography location 1

1.2 Natural condition 1

1.3 Demographic 3

1.3.1 Population 3

1.3.2 Ethnicity 3

1.3.3 Religion 3

1.3.4 Language 4

1.4 Social structure 4

1.5 Political conditions 5

1.6 Economic conditions 5

1.7 Education 8

CHAPTER 2: DIFFERENCES IN MEXICO’S BUSINESS CULTURE 9

2.1 Business values 9

2.1.1 Management style 9

2.1.2 Interpersonal Trust and Confidence 10

2.1.3 Contracts and Relationships 10

2.1.4 Teamwork in Mexico 11

2.1.5 Attitudes toward time 11

2.2 Business norms 12

2.2.1 Business meeting, greeting and titles 12

2.2.2 Etiquette 13

2.2.3 Agreement and contract 14

2.2.6 Business cards and gift giving 15

2.3 Notes in business negotiation 15

2.3.1 Attitudes 15

2.3.2 Language 17

2.3.3 Information Sharing 17

2.3.4 Speed of negotiations 17

2.3.5 Negotiating 18

2.3.6 Decision-making 19

2.4 Organizational structure of the companies in Mexico 20

2.5 Motivation 20

2.6 Leadership 21

2.6.1 Purpose and Methods 21

2.6.2 Types of leadership models 22

2.7 Other important notes about culture in Mexico business 23

CONCLUSION 23

REFERENCES 24

Figure 1.3 Distribution of the gross domestic product (GDP) across economic sectors

from 2009 to 2019 Reproduced from “Distribution of the gross domestic product (GDP) across economic sectors from 2009 to 2019” Statista.com

2020

Figure 1.4 GDP in Mexico from 1965 to 2020 Reproduced from “Mexico GDP - Gross

Domestic Product” Countryeconomy.com 2020

Figure 1.5 Annual GDP Mexico and GDP per capita Mexico from 2000 to 2020

Reproduced from “Mexico GDP - Gross Domestic Product'' Countryeconomy.com 2020

Figure 2.1 Analyzing factor' Hofstede (2016)

INTRODUCTION

Globalization is one of the great conditions for us to integrate and develop our career Analyzing the multicultural environment is to improve our knowledge and understanding about the culture and working environment we are approaching

Each country has a different culture, which directly affects the business culture of that country Mexico is no exception, is a country with an extremely rich and unique culture

To have a better understanding of this North American country, our team analyzed the culture of Mexico to find cultural differences that directly and indirectly affect the business process in this country with a view through the theoretical prism of Geert Hofstede to analyze and explain why there are different businesses In addition, we apply the knowledge of the Cross-Cultural Management subject in this analysis to better understand the differences

CHAPTER 1: BRIEF INTRODUCTION OF MEXICO 1.1 Geography location

Mexico is at the southern extremity of North America It borders the United States, Pacific Ocean, Guatemala, Belize, Caribbean Sea, and the Gulf of Mexico [1]

Mexico covers 1,972,550 square kilometers (2021) [2], “making it the world's largest country by area” (“Population and Housing Census 2020”, 2021) [3] The country has a total of 31 states and one federal district is the Mexican capital, one of the most densely populated urban areas in the world [4]

14th-Much of this country's territory is on the North American tectonic plate while partially small in the Baja California peninsula and belongs to the Pacific Plate and the Cocos Plate Geophysically, most of Mexico's territory belongs to North America, while 12% of the territory's Mexico belongs to the peninsula Tehuantepec which is located in Central America In terms of geopolitics, Mexico is considered a North American country along with the United States and

Canada [5]

1.2 Natural condition

Topographically, Mexico is mainly mountainous terrain The country has three main mountain ranges located along the coastline of Mexico Lying between these mountains and the coastline are these small and narrow plains Mexico is located in an unstable area, near the junction between the two plaques Cocos and North America, where earthquakes and volcanic eruptions occur in overflow [6]

Figure 1.1 Topography of Mexico in 2018 Reproduced from “Topography of Mexico”

Wikimedia Commons, 2018

Concerning the climate of Mexico, the Tropic of Capricorn divides Mexico's territory into two distinct climatic zones: the temperate northern half of the tropical climate and the southern half of which is highly dependent on elevation Besides, Mexico is also a country with many mountains These make Mexico one of the countries with the most diverse climate systems in the world [7]

About biodiversity, Mexico positions fourth on the planet in biodiversity (2017) [8] With more than 200,000 unique species, Mexico is home to 10–12% of the world's biodiversity (2007) [9] Mexico positions first in biodiversity in reptiles with 707 known species, second in warm-blooded animals with 438 species, fourth in creatures of land and water with 290 species, and fourth in greenery, with 26,000 unique species (2007) [10] Mexico is additionally viewed as the second country on the planet in biological systems and fourth in overall species (2007) [11]

1.3 Demographic

1.3.1 Population

Mexico's populace is around 130,004,727 individuals (2021) Mexico’s population is currently 1.65% of the world population Mexico is ranked 10th (2021) in the world in the ranking of the population of countries and territories [12]

1.3.2 Ethnicity

Mexico is a country with a wide range of identities, and its Constitution unmistakably expresses that Mexico is a multi-ethnic country Mexicans can be isolated into the accompanying primary gatherings:

The Mestizo (a hybrid of whites and Indians) is the ethnic group with the highest proportion in Mexico, estimated at 60-75% (2015)

Native Indians are assessed to make up somewhere in the range of 12 and 30 percent of the populace These were the main occupants of Mexico so their dialects are perceived by the Mexican government as the public language and ensured

Whites make up about 9% to 17% of the population They are immigrants of European descent They have many different origins, mainly Spain, and then some other groups such as France, Italy, Portugal, Basque, Germany, Ireland, Poland, Romania, and Russia Some Americans and Canadians also recently immigrated to Mexico

Blacks make up an unimportant minority in Mexico, focused on the shorelines of Veracruz, Tabasco, and Guerrero Mexico likewise has a huge Asian people group from China, Korea, the Philippines, Japan, Lebanon, Turkey, [13]

1.3.3 Religion

The 2020 registration by the Instituto Nacional de Estadística y Geografía (National Institute of Statistics and Geography) gave Roman Catholicism as the principle religion, with 77.7% (97,864,218) of the populace, while 11.2% (14,095,307) have a place with Protestant/Evangelical Christian sections—including Christians (6,778,435), Evangelicals (2,387,133), Pentecostals (1,179,415), Jehovah's Witnesses (1,530,909), Seventh-day Adventists (791,109), and individuals from the Church of Jesus Christ of Latter-day Saints (337,998)— ; 8.1% (9,488,671) announced having no religion; 4% (491,814) were unknown [14] [15]

Figure 1.2 Religion in Mexico in 2020 Reproduced from “Religion in Mexico”

Wikimedia Commons 2020

1.3.4 Language

Mexico is the country with the biggest number of Spanish speakers on the planet, more than twice as much Spanish as the starting point of the language Hence, Mexico has a significant job in spreading the impact of Spanish to the world, particularly in America [16]

Although Spanish is spoken by 97% of Mexico's populace, it isn't perceived as the country's only authority language [17] As indicated by the Constitution of Mexico, all native dialects have a similar right as Spanish, paying little mind to the number of speakers Inhabitants are completely qualified to be approached to offer public types of assistance and materials in their local language [18] English is broadly utilized in the American people group in Mexico, northern boundary urban communities, and major monetary and monetary focuses Some different dialects

of European inception that are likewise generally utilized are Venetian (beginning from Italy), Plautdietsch (southern Germany), German, French, and Dig

1.4 Social structure

Mexico is a decentralized society Mexican culture is emphatically isolated by income and schooling level Although the working class has attempted to grow in urban areas, the important division is between the rich accomplished tip top and the metropolitan and provincial poor, who establish by far most of the populace [19]

Mexican society is evaluated and stratified vertically Mexico emphasizes hierarchical relationships People respect their rights and turn to those above them for guidance and decision-

making People of rank must be always respected That is the source of decision-making and problem-solving in Mexico, and each rank will be assigned to the individual - be it family, friends, or business It would be disrespectful to break the chain of the hierarchy

1.5 Political conditions

The political issues of Mexico happen in a structure of a bureaucratic official delegate majority rule republic whose administration depends on a legislative framework, whereby the President of Mexico is both head of state and head of government, and of a multi-party framework The government addresses the United Mexican States and is isolated into three branches: executive, legislative and judicial, as set up by the Political Constitution of the United Mexican States, published in 1917

The leader power is practiced by the presidential branch, which is going by the President, informed by a bureau with respect to secretaries that are free of the governing body

Administrative force is vested upon the Congress of the Union, a two-chamber lawmaking body including the Senate of the Republic and the Chamber of Deputies

The legal force is practiced by the legal executive, comprising the Supreme Court of Justice of the Nation, the Council of the Federal Judiciary, and the university, unitary, and locale councils

“The politics of Mexico are dominated by four political parties: Institutional Revolutionary Party (PRI), National Action Party (PAN), Democratic Revolution Party (PRD), and the National Regeneration Movement (MORENA)” [20]

Figure 1.3 Distribution of the gross domestic product (GDP) across economic sectors

from 2009 to 2019 Reproduced from “Distribution of the gross domestic product (GDP) across

economic sectors from 2009 to 2019” Statista.com 2020

In 2019, agriculture accounted for about 3.5% of the economic sector and the percentage for the industrial sector reached approximately 30.2%, while the services sector made up an enormous proportion of 60.5%

Moreover, Mexico is the 16th largest in the world in nominal terms and the 10th largest

by purchasing power parity, according to the International Monetary Fund (2020) [24]

Figure 1.4 GDP in Mexico from 1965 to 2020 Reproduced from “Mexico GDP - Gross

Domestic Product” Countryeconomy.com 2020

About Mexico ‘s GDP (Gross domestic product), there is a larger variation between years Especially from the end of 2019 to the beginning of 2020, Mexico suffered from the COVID-19 pandemic leading to a severe effect on its economy

According to the statistics of Countryeconomy.com, in 2020 the GDP figure was

$1,076,160 million The total worth of GDP in Mexico dropped $192,710 million as of 2019 [25] Besides, its GDP Growth heavily decreased to minus 8.2%, and its GDP per capita also dropped down minus 16.0%

Figure 1.5 Annual GDP Mexico and GDP per capita Mexico from 2000 to 2020

Reproduced from “Mexico GDP - Gross Domestic Product'' Countryeconomy.com 2020 OECDiLibrary (the online library of the Organisation for Economic Cooperation and Development featuring its books, papers, and statistics and is the knowledge base of OECD's analysis and data) said that the COVID-19 pandemic would drive the economy into an extreme downturn in 2020, driven by the worldwide constriction, the fall in the travel industry, lower oil costs, and the vital homegrown imprisonment estimates are taken The gross domestic product would fall by 8.6% this year (2020) if there is another flare-up later in the year (the two-fold hit situation) On the off chance that further episodes stay away from (the single-hit situation), the economy would shrink by 7.5%, with recuperation in the second 50% of the year driven by fares and utilization In the two situations, the degree of GDP would remain lower than toward the end-

2019, as it will take some effort for the travel industry and fare areas to get back to pre-pandemic levels Poor people and powerless, including casual specialists, will be especially hard hit by the downturn [26]

In terms of commercial parts, Mexico mainly exported manufactured goods, electronics, vehicles and auto parts, oil and oil products, silver, plastics, fruits, vegetables, coffee, cotton, silver; while imported metalworking machines, steel mill products, agricultural machinery, electrical equipment, automobile parts for assembly and repair, aircraft, aircraft parts, plastics, natural gas, and oil products As well, the United States, Canada, China, Spain, Brazil are the main export partners; whereas the United States, China, Japan, Germany, South Korea are the main import partners of Mexico (2019) [27] In 2019, Mexico exported $491.6 billion and imported $467.2 billion (2019) [28]

1.7 Education

In Mexico, fundamental instruction is typically isolated into three stages: basic education (elementary school), upper - secondary education, higher education Each level of education is further subdivided as follows [29]:

● Educación Basica (Basic Education)

1 Educación Preescolar (early childhood education): Ages 3–6

2 Educación Primaria (elementary education): Grades 1–6

3 Educación Secundaria (lower-secondary education): Grades 7–9

● Educación Média Superior (Upper Secondary Education): Typically grades 10–12

1 Bachillerato General (general academic)

2 Bachillerato Tecnológico (technological education)

3 Profesional Técnico (vocational and technical education)

● Educación Superior (Higher Education)

1 Técnico Superior (post-secondary/associate/diploma)

2 Licenciatura (undergraduate and first professional degrees)

3 Postgrado (graduate/postgraduate education)

CHAPTER 2: DIFFERENCES IN MEXICO’S BUSINESS CULTURE 2.1 Business values

Cultural values can affect decision making, management style, interpersonal trust, teamwork, and the role of women in the workplace, among other issues

2.1.1 Management style

As Gregory K Stephens & Charles R Interview in 1994 [30], they suggested that:

The Mexican managerial style has been characterized as autocratic and paternalistic Mexican subordinates are more deferential and less likely to challenge or oppose a supervisor’s ideas or directives, especially across hierarchical levels Many employees still hesitate to provide decision-making input or assume decisionmaking responsibilities and risks

A reluctance to challenge decisions also appears to stem, in part, from the greater respect and sensitivity employees offer to other workers of all ranks, both within and across hierarchical levels Mexicans are far less tolerant of abrasiveness and insensitivity in managerial styles than are Americans This style is antithetical to gaining subordinates’ support and compliance

To Mexicans the issue is honor, not equality Rather than resent their “rank,” workers expect respectful recognition of their roles within the hierarchy Even the janitor expects respect To sum up, Mexicans accept the decentralization within the company because they see it

as respecting the rank they undertake

Figure 2.1: Table of analyzing factor' Hofstede (2016)

According to Hofstede (2016), the Power Distance point of Mexicans is high (81 points), which means there is an existence of high Power Distance in Mexico This clearly explains why Mexicans behave as above

2.1.2 Interpersonal Trust and Confidence

In everyday life or even in business, Mexicans are very promising However, the ability to perform as they say is not high This is normal for them because they do not want to disappoint the other party or business partner

Mexico is similar to many Latin countries when Hofstede's Dimensions are compared and analyzed Mexico's highest Hofstede Dimension is Uncertainty Avoidance (82 points), indicating the society’s low level of tolerance for uncertainty As a result of this high Uncertainty Avoidance characteristic, the society does not readily accept change and is very risk adverse Alternatively, in emotional cultures like Mexico, people often smile, talk loudly when excited, and greet each other with enthusiasm (Trompenaars’ seven-dimension cultural model) People are expected to open up emotionally to others; use emotional means to communicate to each other; use body language effectively These two dimensions also explain why Mexicans are very promising

2.1.3 Contracts and Relationships

Another Mexicans’ s Value that is influented by high Uncertainty Avoidance is that Mexicans place a high value on relationships and mutual trust, the resulting difficulties might well be insurmountable This leads to foreign companies wanting to cooperate with Mexican companies is quite difficult Because Mexicans tend to do business or sign associate contracts with relatives, friends, family, people they know They only believe in brotherly relationships in the family, relatives, close friends Building new relationships requires referrals from people you already know This has resulted in you have to build a good relationship in order to do a good business in Mexico

In addition to explain why they behave like that, a collectivistic culture like Mexico in which people value social networks and relationships and expect group members to support and sustain one another Mexicans also tend to be more loyal and will defend their dealings with an insurance vendor on the basis of the relationship, not the cost

2.1.4 Teamwork in Mexico

A fascinating aspect of the Mexican culture is that it may promote a quick adaptation to teamwork Their team spirit is real; they will help people in trouble If a supervisor is in trouble, they will help him They are high communicators in their group

Mexican workers’ desire for affiliation may enhance the effectiveness of the workteam concept Some Mexican employees develop such strong allegiances to a company that they view it almost as family

This aspect can be explained by the collectivistic culture of Mexico (Hofstede's research) Mexico has a low Individualism ranking (30 points) The score on this Dimension indicates the society is Collectivist as compared to Individualist This is manifest in a close long-term commitment to the member 'group', be that a family, extended family, or extended relationships Loyalty in a collectivist culture is paramount, and over-rides most other societal rules and regulations The society fosters strong relationships where everyone takes responsibility for fellow members of their group But this contrasts with Trompenaars research which found Mexico and the former communist countries of Czechoslovakia and the Soviet Union to be individualistic This shows the dynamic and complex nature of culture

2.1.5 Attitudes toward time

Latin countries are well-known for polychronic in their approach to time Mexico have the ''manana'' attitude, which in Spanish means that they are often generous about time, not the spirit of time is gold and silver like other cultures [31]

But due to working heavily with the Western culture of punctuality and being high in UAI which is a index of Hofstede (82 scores), this habit is now changing as well They always want their counterparts be punctual Hofstede explained the difference by his research which shows that Mexicans are high in their avoidance of risk [32]

To sum up, Mexicans tend to have a looser sense of time compared to other countries in North America However, arriving on time for a meeting is still important But you may be kept waiting 30 minutes or more This is due to the personal time management of Mexicans, everybody will have their own attitude of being punctual or not, so this is considered a value in Mexico