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Mexico, officially known as the United Mexican States, is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of Mexico. Covering almost 2 million square kilometres (over 760,000 sq mi), Mexico is the fifth-largest country in the Americas by total area and the 14th largest independent nation in the world. With an estimated population of 111 million, it is the 11th most populous country and the most populous Hispanophone country on Earth. Mexico is a federation comprising thirty-one states and a Federal District, the capital city.
A. Brief Country Profile
Population and Ethnic Group
The population of Mexico is approximately 111,211,789  . Mexico is ethnically diverse, and the constitution defines the country to be a multicultural nation. Mexican nationality is relatively young, stemming back only to 1821 when Mexico achieved independence from the Spanish empire, and it consists of many, separate regional and ethnic groups such as the various indigenous peoples and European immigrants. The majority of Mexicans are Mestizos which makes up the core of the Mexican cultural identity.
The United States of Mexico is governed by a congressional system where the President of the republic is both head of state and head of the government. Mexico is a multi-party democracy where voters nationally elect a President to serve a six-year, non-renewable term in office. The Federation, made up of 31 States and a Federal District (Mexico City), is divided into three branches: Executive, Legislative and Judicial, as set out by Mexico's Constitution.
Legislative: the bicameral Congress of the Union, composed of a Senate and a Chamber of Deputies, which makes federal law, declares war, imposes taxes, approves the national budget and international treaties, and ratifies diplomatic appointments. Executive: the President of the United Mexican States, who is the head of state and government, as well as the commander-in-chief of the Mexican military forces. The President also appoints the Cabinet and other officers. The President is responsible for executing and enforcing the law, and has the authority of vetoing bills. Judiciary: The Supreme Court of Justice, comprised by eleven judges appointed by the President with Senate approval, who interpret laws and judge cases of federal competency. Other institutions of the judiciary are the Electoral Tribunal, collegiate, unitary and district tribunals, and the Council of the Federal Judiciary.
Mexico has no official religion. However, Mexico's people are very religious and predominantly Roman-Catholic. Mexico is also an open and extremely tolerant country which allows all religions to practice their faith openly and without fear of reprisal. Churches of all Christian denominations may be found in Mexico City and you will also find all other major faiths (e.g. Muslim, Hindu, and Buddhist) represented in the capital, also. The district of Coyoacan, in Mexico City, is well-known for its extensive numbers of theological book stores covering virtually all religions and beliefs. In the provinces, Roman Catholicism is the dominant faith and most churches you visit throughout Mexico will be Catholic. In rural places with strong indigenous roots, for example, in San Juan Chamula, you will also find religious orders which are a blend of Catholic and Indigenous beliefs.
Education in Mexico is highly competitive and actively pursued especially in Amerindian communities as it as seen as the primary path to success and employment. Mexico has one of the highest student-to-teaching staff ratio in the world with 26 students per teacher nationwide, when all levels from pre-K through post secondary education are included. According to the OCED, compared to students from the worlds thirty most developed nations, Mexican students came in fourth in problem solving, third in science and technology and eighth in mathematics.
Mexico has one of the largest educational budgets in the world measured by actual spending and as a percentage of GDP. In 2009 the educational budget was $148 billion equalling 9.7% of total GDP. In 2004, the literacy rate was at 97% for youth under the age of 14 and 91% for people over 15, placing Mexico at the 24th place in the world rank accordingly to UNESCO. Primary and secondary education (9 years) is free and mandatory. Even though different bilingual education programs have existed since the 1960s for the indigenous communities, after a constitutional reform in the late 1990s, these programs have had a new thrust, and free text books, software, and vocational programs are available in more than a dozen indigenous languages.
B. Basic Concept of Negotiation Process
Basic Concept of Negotiation refers to how each party views the negotiating process. Conventional wisdom divided this into distributive and integrative. Mexicans have a win-win attitude, are hard bargainers which involved long, vigorous discussions. This concept of negotiation is also known as integrative bargaining strategies. The assumption underlying integrative bargaining strategies is that there is opportunity for both parties to gain from a negotiated agreement because they place different values on the issues being negotiated and can find effective tradeoffs by conceding less important issues to gain on more important ones. Integrative negotiation involves both cooperation to expand the pie and competition to divide the pie between the two parties. Negotiators fitting this profile believe that win-win solutions can be generated, employ a problem-solving approach to develop solutions that expand the size of the rewards available to everyone, and attempt to understand the underlying issues and their relative importance to both parties in order to capitalize on the different interests of both parties and to find effective trade-offs.
When doing business in Mexico, the most important thing to remember is that the relationship must be developed first. Mexican people make friends first, and then they do business, not the other way around. If you do not take time to develop a relationship (i.e. a friendship) building rapport and trust, then you may as well not be in Mexico on business. You may have the best product (they may have the very thing your company needs), but if you don't build the relationship, they will be highly reluctant to do business with you. Therefore your negotiations should initially center around building a relationship.
A meeting should always begin with small talk. Family is very important in Mexico, and a friendly enquiry about how the family is doing is often common practice, even among Mexicans. Other topics include the weather, latest fashions, and Mexico's areas of outstanding natural beauty. Begin the process of getting to know your hosts and be aware that their first impressions of you will count a lot. Use this time to develop the relationship and build a foundation for friendship. Your hosts certainly will.
Bear in mind what setting you are in: Most initial meetings begin over breakfast or lunch, and you should understand the relevant facts above to ensure you play your cards correctly. Don't rush and don't be rushed. Trying to short-circuit the process can lead to problems later on. Business deals are seldom (if ever) closed over the phone; Mexicans like to look you in the eye when they are closing the deal. Once again, personal contact and relationships are important, as they are throughout the entire Mexican culture.
A note about closing sales by email and web-trading: This is becoming more accepted in Mexico, and small business deals (e.g. subscriptions or re-subscriptions) may be closed using e-trades, but initial contracts and any significant business deal must be undertaken personally. The currency of trust that exists in the US, Canada & Europe in regard to trading and trusting businesses to deliver their promises through electronic trade has not developed in Mexico yet. Your business associates will want to see you in person, and you should want to see them, too.
C. Selection of Negotiators
Selection of Negotiators refers to the criteria used to select members of the negotiating team. Conventional wisdom divided this selection of negotiators into two; abilities or status. Achievement-based people evaluate and relate to others based on what they have accomplished; status-based people evaluate and relate to others based on who they are. For Mexicans their selection of negotiators is based on status. Mexicans view expertise as less important than fitting in with the group. Mexicans believe members of a negotiating team should be selected because of who they are and whom they know. Examples of relevant characteristics include family background, influential connections, seniority, age, or gender. Negotiators from status-based cultures may be senior, high-ranking officials, who wield considerable influence in their organizations and who may also command great respect in the community at large.
Mexican businesses tend to be very hierarchical. Status and position is important in Mexico, and you should acknowledge this and act accordingly. If a Mexican firm's top managers are present at a meeting, they will expect the same from your firm. They will feel insulted if subordinates are sent to meet with them. Equally, if a firm sends lower level managers to deal with high level people in your company, then you will be wasting your time. Make sure that you are meeting and negotiating with the people who will be making the decisions. More often than not, these will be senior people within the company.
D. Individual Value
Mexicans pursue individual goals, personal recognition. Interests of the group are a dominant factor. Harry C. Triandis  defines individualists as people who see themselves as loosely linked to and independent of others. Mexicans are motivated primarily by their own preferences, needs, and rights, and they give priority to their personal goals. From this, we can describe Mexicans as being emotionally independent from the organization to which they belong and is striving to achieve outcomes that are in their own best interests. They may also keep the organization's interests and goals in mind, but will do so because they expect personal reward and recognition for their decisions.
E. Concern for Protocol
Mexicans value formality and follow established etiquette.
Names: In Mexico, people have three names: Their First name, their Paternal name and their Maternal name. Written, they will use all three (or the third will be often abbreviated with the first letter), but verbally they will use the first two. For example, Maria Vazquez Laredo would introduce herself as Maria Vazquez, or Señora/Señorita Vazquez.
Titles: Titles are extremely important in Mexico-a big status symbol. Professionals with a degree are not referred to as Señor or Señora/Señorita, but with their title: The most common titles are: Licenciado/a (Professional e.g. Lawyer, BSc, etc.), Ingeniero/a (Engineer) Doctor/a (Doctor), Arquitecto/a (Architect). If you are unsure whether they have a title (a business card should always carry it) then you should assume a title and use the one that is most likely to represent their trade.
Men Meeting Men: Men always shake hands when they meet and before they depart each other's company. An "abrazo" (hug) is shared between friends; wait for your Mexican contact to lead with this. If, while shaking hands, he pulls you in toward him, follow through with your left arm on his back, and give him 2 or 3 pats on the back.
Men Meeting Women: A formal handshake is appropriate for business when meeting and before departing; some women may learn toward you to kiss; you should follow through with a light kiss on the cheek (only one, unlike Italy, for example). Women Meeting Women: A formal handshake is appropriate, and it is likely that women will kiss on the cheek when they meet and depart.
Generally, if you are introduced to a man or woman, you should always follow the protocols above: Physical contact is essential-never just stand there and say 'hello, nice to meet you'. Once you have built a rapport and have a friendship developing, you will find that your Mexican hosts will be much warmer, and physical contact in the "meet and greet" process will be more prominent (e.g. handshakes and hugs will be firmer and last longer). Don't let any personal reserve you might have interfere with this process: it is essential to gaining people's trust and understanding in Mexico.
In terms of dress code, Mexicans dress formally for business meetings with suits and ties, and will expect you do the same in the major cities (Mexico City, Guadalajara, Monterrey). This is also true for most cities inland. Shorts (even formal shorts) and short sleeved shirts (even formal short sleeved shirts) and trainers (tennis shoes) are a no-no.
The exception to this rule is if you are meeting in a very hot region or climate - Acapulco by the Pacific coast is a good example. Next to the beach, meeting attire tends to be smart informal; formal shorts and short sleeved shirts (not T-shirts) are acceptable, but your feet should be covered-no flip flops or similar. Dress light, but respectfully.
For social gatherings (outings, picnics, etc.) wear smart casual: chinos, polo shirt, pull-over for the evening, etc. If you're playing golf, you'll be required to wear proper golf wear, just as you would do at established golf clubs back home.
F. Complexity of the Language
Spanish is Mexico's official language, and business meetings should normally take place in Spanish. English is quite widely spoken in business circles, today more than ever before, and if you don't speak Spanish, your hosts may be happy to hold the meeting in English, but check beforehand to avoid embarrassment.
Even though your hosts are likely to accommodate your language needs, you should try to learn some Spanish if you are going to be doing lots of business in Mexico. Even an attempt to communicate with broken Spanish will be warmly appreciated and seen as a sign of interest and respect. If you do not speak any Spanish at all, it may be wise to hire an interpreter to attend the meeting with you. In such an event, meet with your interpreter beforehand, brief her/him about the likely content of the meeting, including any technical terms that you will be using.
When speaking in English to a Mexican who understands English, speak clearly, slowly (but not stupidly slow), and if you have a British English accent try to pronounce your vowels and the letter "r" more than you otherwise would. Why? Most Mexicans learn English by listening to Americans speak. A British accent can throw them off, especially more complicated words. The closer you speak to "Queen's English", the harder it may be for them to understand some words. If you have an English regional, Welsh, Scottish or Irish accent, this may help or hinder -read the body language to make sure.
Something that can happen inadvertently if you are speaking with people for whom English is a second language-don't shout or speak louder than you normally would! A note about written communication: All marketing literature, product manuals, warranty info, labeling, and anything you expect to leave with the contact should be in Spanish. Be sure to come prepared with all your relevant information translated into Spanish. It will show respect and show that you are serious about doing business in Mexico. If you start to ship products to Mexico, by law, you will need to have all written communication documents in Spanish, especially the labeling. Many goods stay in Mexican Customs (accruing expensive storage fees) because the labeling is does not match import regulations.
Mexican Communication Styles
It is common for colleagues to address each other through the use of family names, moving on to first name terms only when the relationship is very well established. If in doubt about which name to use, it is probably safest to err on the side of caution by starting with the family name. In addition, titles such as Liciendo/a (a professional such as a lawyer) or Ingeniero/a (an engineer) are also commonly used terms of respect. Emotion is not suppressed in business situations and discussions can appear heated and at times acrimonious to those from a culture which frowns upon the any visible shows of emotion during business dealings. This outward show of emotion is seen as a positive and implies engagement and emphasis.
Mexican body language differs from North American and Northern European body language. People stand much closer to each other and have far stronger eye contact than in many other cultures. It is important that you are not intimidated by these issues, as lack of strong eye contact or maintaining too great a distance could be misconstrued as standoffishness or untrustworthiness. Try to mirror the Mexican approach in these matters.
G. Value of Time
Mexicans practice polychronic orientation toward time. Do not expect punctuality. Mexicans take time to reach decisions. The English are so well known for their punctuality that in Mexico, there's a saying people use after agreeing a time with you: "Hora Inglesa", literally translated means "English Time", the inference is that the time agreed should be strictly adhered to.
In Mexico, time is not regarded as the panacea that it is in other western economies. Time is a very flexible thing in Mexico. As such, don't be offended or surprised if your contacts in Mexico don't show up in timely fashion: tardiness can be due to a range of different things and if it happens there will always a be a 'good reason' for it! For social events, you could show up 30 minutes later than the time on the invitation. People rarely show up for parties at the exact time, preferring to arrive a little later on; in Mexico this is quite common.
If you are sending out invitations to a social gathering, keep in mind that guests won't show up at the time you state, and importantly, it is not customary to define an 'end time' for social occasions in Mexico. Sometimes invitations will specify a time at which the event will end; in Mexico, this should be left open-ended.
Punctuality is less rigid than in certain other cultures and it is not unusual for meetings to start late and run over the allotted time. This level of uncertainty can make it difficult when scheduling a number of meetings on one day (especially if you need to travel around Mexico City between meetings.) Probably the best time to schedule meetings is between 10:00am and 1:00pm - as lunch usually begins around 2:00pm and can be quite lengthy.
If agendas are produced there would be little expectation that they would be followed systematically or any annoyance if non-agenda items are introduced during the meetings. Meetings are seen as opportunities for the free flow of ideas and information - although it is best to avoid very open disagreements with the most senior Mexican present as this could be construed as disrespectful and confrontational.
Open signs of emotion, through the use of interruptions and speaking loudly, are seen as a sign of active engagement rather than an unnecessary loss of control. Do not assume that, if a Mexican becomes highly emotional during a meeting, they have lost their sense of professionalism - they are probably conveying their sense of commitment and interest. It is not uncommon for small side-meetings to occur during a larger meeting or for people to interrupt colleagues in mid-sentence.
H. Bases of Trust
Generally, Mexico are rich with its culture and heritage and the Mexican value their culture and tradition the most. Trustworthiness is one of those important elements in Mexican culture. In business world, Mexicans like to do business with those they know and trust. Creating strong personal and business relationship with Mexicans is necessary to triumph in doing business in Mexico. First, In order to achieve this it is important to develop a good relationship with fellow Mexican and gaining their friendship and trust. Secondly, is to understand the culture and traditions of the Mexican and honor them in order to get that trust. For example, Mexican honor their family very high and thus making critical comments about all these elements in conversation will be regard as rude. Mexicans are very proud of their language and in order to gain their respect learning little Spanish word will be very beneficial.
Since the Mexican values are based on trust in which a business deal can only be achieved if that element is fulfilled it is beneficial to give good first impression when meeting the Mexican for the first time. In order to do that one need to understand a proper greeting is a must in Mexico and this will be discussed further later on. For example, shaking hands are considered the standard greeting in any occasions with Mexican. Moreover, it is also highly recommended to address all the members of a group individually. Greeting to the group collectively is viewed as being lazy and rude.
I. Risk Taking Propensity
Basically, Mexican tends to be risk avoidant and they will avoid risk as much as possible. They will behave in pessimistic manner in a situation whenever it involves risk. It is also a known fact the 'vagueness' attribute of Mexican or being 'indirect' which mean they will not give a straight answer to inquiries especially when what need to communicate is unpleasant. It is common in Mexico to receive an indirect response or 'I'll get back to you' kind of answer. Therefore, it is important to ensure that everything is clear when dealing with the Mexican.
J. Internal Decision Making System
Basically, the Mexican organizations are centralized decision making approach whereby all decisions are made by a few key people at the top level of management in the organizations. Those who have the authority in Mexican organizations tend to make decisions without the concern of consensus. The society in Mexico itself is hierarchical and due to that nature the responsibilities are normally not delegated to the lower tier of the management level. Prior to that, when dealing with a Mexican company it is advisable to identify the key decision-makers of that company and deal with them directly. In other words, in order to save time and money it will be important to ensure that the person to deal with are those who can make the decision whom usually are the senior people within the organization.
Moreover, the accountabilities have to be specified to those responsible as the authority is put on the top level management ranks or the bosses' shoulders. Empowerment or the delegation of power to subordinates is never assumed in Mexico and accountability needs to be specified accordingly to avoid problems from arising. To support the fact above, George Bowman who is one of the GE Mexico's managing directors said that the adjustment that the U.S managers undertook in Mexico were to demand accountability for the result which also include setting clear targets followed by regular progress check.
Beside that, due its hierarchy nature, they expect the representatives of other companies who attend a meeting will be at least be at similar rank as theirs. It will be an insult to the Mexican if the other companies send junior officers to deal with the higher ranking officers in the organization.
K. Form of Satisfactory Agreement
This dimension refers to the preferred form of agreement between the parties: either formal written contracts or informal oral agreements. Formal written contracts clearly specify desired partner actions, the degree to which both parties of the agreement will cooperate and conform to each other's expectations, as well as the penalties that one party can extract should the other party fail to perform. Informal agreements often consider the historical and social context of a relationship and acknowledge that the performance and enforcement of obligations are an outcome of mutual interest between parties.
Mexican prefers more to informal agreement. Words are not a binding commitment to action. Relationships ensure follow-through. Mexicans favor broad or vague language in a contract because they feel that definitive contract terms are too rigid to allow a good working relationship to evolve. Particularly with new relationships, Mexican may feel that it is impossible to anticipate and document every conceivable contingency. They may also believe that contracts inhibit the parties from exploring unexpected or unusual opportunities for improvement and success. Mexicans view the contract as a rough guideline, not because they want to evade responsibility, but because the relationship, not the contract, is primary.
L. Emphasis on Status
As a class conscious society, titles and other symbol representing status are very important in Mexico society and they should be politely acknowledge and the rules pertaining to the social etiquettes are to be followed. For example, the professional titles are very important to be addressed accordingly even in many informal situation. They cannot to be addresses as 'senor' or 'senorita' but must be addressed according to their professional titles such as 'licenciado' for lawyer or bachelor degree; 'ingeniero' for engineer of doctors; 'architecto' for architect; 'maestro' for fine artists and master craft people; and 'professor' for professor. Interestingly, when a person introduces himself by his professional titles, this means that the person is expecting the conversation to be a formal one.
Moreover, the Mexicans are embedded with politeness, patience and tolerance. When dealing with the Mexicans it is advisable to be as polite as possible and if it is not the request will not be fulfilled as the response or the impoliteness. It is also can be seen in the language and culture of the Mexicans. There are two forms of languages which are the formal form of language called 'usted' used when talking to person who are more senior as well as 'Tu' which is the informal form of language used when dealings with friends and many informal situations.
Prior to that, dress code is one of the important aspects in Mexican culture. In Mexico, proper treatments from the locals are assured if the person dresses appropriately depending on the occasions. For example, wearing a suit and tie for men and formal dress for women for formal occasions; smart casual attire for informal occasion. However, in certain city like Cancun, Acapulco, Los Cabos does not require a person to wear shirt and tie even to a formal meeting due to the climate at these place. Smart casual of light clothing is the best choice as the attire here.
M. Basic Rule of Etiquette
There are few basics rule of etiquette while in Mexico and they are as follows:
The formalities when meeting and greeting are important and failure to do so will be considered by the locals as rudeness. Moreover, correct physical contact is essential to build trust and respect with each other.
People in Mexico have three names consist of their first name followed by their paternal and maternal names respectively. Verbally, they will use the first of the two names and in writing they use all the three. In formal situation, it is highly recommended to avoid calling them by their first name until they allow it to do so.
Mexicans prefer to stand closer to each other particularly during conversation which sometime less than a foot with each other. This may create uncomfortable feeling to those who first come to Mexican and mix around with the locals especially talking to the person of the same gender. However uncomfortable it may seem, stepping back too far may show a sign of mistrust and lack of respect.
Men always shake hands when they meet and before they depart while hugging is common between men. Whereas, it is appropriate to bow slightly when meeting a woman. Moreover, during social situation, women may lean toward a man to be kiss and the man should politely give a light kiss on her cheek.
Gift giving is another important element in Mexican social culture as gifts are considered as a symbol of affection and appreciation. For example, if a person is invited to a dinner it is best for him to bring gift such as flower or wine or some token related to the person home country.
Mexicans have few basic etiquettes while dining with them socially or even for business. For example, if a person invited other person for a dinner or lunch it is assumed that the person who invite will settle the bills of the meals. It is not a customary for Mexicans to split the bill for the meals. However, as an outsider, it is advisable to offer to pay for the bill even he is the one being invited and politely decline the offer when the other party insists on paying as they would do so.
Discussing business during breakfast is common in Mexico and many deals always agreed during the breakfast. Meanwhile, businesses are sometime discussed during lunch time since lunch is the main meal for the locals. Moreover, it is rude to finish off lunch abruptly while eating with the locals. Whereas, business are seldom discuss during dinner as it is considered as social gathering where the discussion revolve around the matters related about friend and family.
During the meals, both hand should be above the table and avoid getting up for example to the toilet soon after the meals is finished. It is also a custom for men to offer toast which is called 'salude' meaning health. Whereas, the host will usually say 'provecho' before starting a meals which means privilege in Spanish.
It is better not to use knife and fork when eating tacos, tortas ans tostadas but instead use own fingers. Avoid to bring up topics such as war, politics or anything similar during the meals but preferable bring up topics about family or about the uniqueness of Mexican culture and heritage is the best topic.
In the restaurant, whenever settling for the bill, it is a must to include together the tip unless if the service provided by the restaurant are very poor.
Others, putting hands in the pocket while standing or using the okay signal by joining the thumb and index finger is some of the unaccepted behavior and incredibly rude.
Cultural differences can complicate, prolong, and even frustrate international negotiations. In an ideal world, skilled negotiators would come to the table with deep knowledge and familiarity with the culture and negotiation orientations of their counterparts; however, the pace and pressures of global business make this highly unlikely. Consequently, a framework that focuses on key dimensions of the international negotiation context and process as presented above in the context of Mexicans cultures can serve as a valuable tool in assisting negotiators and researchers alike in identifying potential points of conflict. The Negotiation Orientations Framework provides perhaps the most comprehensive approach to date for systematic comparison of national cultural differences in negotiations.