Doing Business in Mexico - Business Etiquette

Doing Business in Mexico – Understanding the Cultural differences between the US & Mexico
by Ignacio Hernandez

Mexico business etiquette and Mexico business culture.

For many years I have considered the development of business relations between the United States and Mexico of the utmost importance. And as business necessarily involves understanding among individuals, when cultural differences exist the task of successfully working together can become even more difficult than usual.

I have considerable experience in doing business in Mexico, between American and Mexican executives, and over the years I have identified a number of practical concerns. Factors and differences that, if ignored, can result in maybe an amusing situation, but more likely missed business opportunities.

Take for example a typical “deal making” session between business persons from the two countries. This conversation will likely occur between two high-ranking executives, as Mexicans tend to make business deals at the highest levels. Trust plays a very important role in establishing relationships, this sometimes may be even more important than professional competence or experience.

The average Mexican business executive will spend the majority of time discussing general topics, waiting the final moments of conversation to bring up the matter at hand. Yet in the “every second counts” mentality of the U.S., light conversation like this is often viewed as an expensive waste of time.

In Mexico's typical business culture meetings start off slowly, with Mexican businessmen exhibiting behavior that is gentle and compromising as they warm up to the actual topics and purpose of the meeting. As well, in Mexico there is a considerable gap between the executive level and the various levels of the rest of the company, causing the executive who well may agree with you to mentally translate how the rest of the corporation can and will execute. There is a sizable downshift process from top management levels to the execution levels in Mexico.

Let me outline a few of the problems an American businessperson might face in setting up a meeting with a Mexican contact. When making a phone call to Mexico, it is relatively difficult to establish first contact. In addition, once contact is made it is customary for several secretaries to “process” the call prior to reaching the intended person. For this reason, I recommend obtaining a phone number for the executive’s direct line whenever possible. It is also helpful, since cellular phones are very important in Mexico, to obtain your contacts cellular number.

The initial call rapport is very important, and if someone is helping you that person must speak fluent Spanish in order not to become discouraged. Do not expect to have the executive secretary answer the phone unless you called his or her direct line, plus whatever the case be patient.

Patience is very important in U.S. - Mexico business relations!

In Mexico, time is not money; money is for enjoying life. There is a saying that "Americans live to work, but Mexicans work to live!"

The American must be conscious of the time zone and time of the day he or she is calling. The typical Mexican Business day starts at 9:00 am and end at 7:00 pm. While this is similar to the U.S. business day, one part is quite different. We take very long lunches. The Mexican business day is interrupted by a two hour lunch, usually between the hours of 2:00 pm and 4:00 pm. This is a custom which has existed for decades and is not likely to change overnight.

If the U.S. businessperson is unable to contact his or her Mexican counterpart and is only able to leave messages, it is not likely - at least by Mexican standards - that calls or messages left will be returned. In most cases Mexicans tend to think that if a call is important it will be placed again. If the Mexican and American businesspersons have, upon crossing these boundaries, been able to set up a meeting time, there are a few more problems that might be encountered.

If the Mexican writes to confirm the meeting on, for example 9/8/06, he is expecting to meet on August 9, 2006. This will create some difficulties when the American arrives for the meeting on September 8, 2006. Remember that in the United States the month is first, whereas in Mexico the day of the month comes first.

Now days, email can be used as an alternative to telephone for confirming appointments and general communication. The secretary is normally the person writing and answering all the emails on behalf of his or her boss.

The U.S. businessperson might also experience a problem if he or she has scheduled a dinner meeting. For Mexicans dinner often occurs at 9:00 pm, not the typical U.S. time of 6:00 pm – 7:00 pm. For reference purposes, other meals occur at 8:30 am for breakfast and 2:00 pm for lunch. In order not to have misunderstandings, it is recommended that women should not invite a male counterpart for a business dinner unless other associates or spouses attend.

Business deals in Mexico are only closed between friends and business meals are the time to get to know each other, conversation may wander through many different topics and the actual business topic at hand is sometimes reached over coffee and after meal drinks.

So now the U.S. businessperson is actually in Mexico City, to visit lets say Corco S.A. de C.V. First he or she must get adjusted to the change in altitude, for Mexico City is over 7,300 feet above sea level. I have noticed in the past that this change can be very exhausting, and thus I recommend that you allow at least one free night of conditioning time to account for possible weariness.

Transportation is of some interest in Mexico. When hiring a taxi, do not accept transportation from private individual soliciting patrons within the airport. Always use obviously professional transportation services. If taking a cab, please note that in most cases you will not have the advantage of a running meter to know the cost. Always ask the price prior to accepting the ride. Once a price has been given though, it is safe to assume that this will be the final fee upon arrival.

Also of note is the situation in Mexico City when driving a car. In an effort to combat pollution, Mexican authorities limit the use of vehicles to four days during the workweek, with a temporary imposed reduction at times limiting driving to three workweek days. The system is based upon license plates numbers. If renting a car, it is thus helpful to ask if it can be actually be driven during your stay in Mexico City, and if so on what day or days of the week might its use be prohibited. I recommend always using taxis in Mexico City to avoid this problem.

Due in parts to the difficulties of traffic, Mexican businessmen or women are customarily late for a scheduled appointment, usually by 15 to 30 minutes, yet it can be more. This scheduling difference should be taken into account, particularly when arranging a meeting within Mexico City. Also note that, after years of “being late,” Mexican business persons do not hold much stock in making an agreed upon meeting time.

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, etc.). The exception to this rule is if you are meeting in a very hot region, a port or beach resort.

When it comes to business greetings, the proper practice is a handshake, regardless of gender. When already developed a relationship or among business associates of the opposite sex, a kiss on the cheek is acceptable or a hug is common between close male friends. Mexican men are warm and friendly, and make a lot of physical contact. They often touch shoulders or hold another’s arm. To withdraw from this touch is considered insulting. Your attempts to speak Spanish will be much appreciated. Mexicans are very polite and helpful, they use the word "please" and "thank you" frequently.

In the United States, it is become customary to use an associate’s first name within minutes of the initial meeting. Mexicans on the other hand are not pleased with being addressed so casually and will wait for your invitation to use a first name. In Mexico, people have three names: Their first name, their father's last name and their mother's last name. Use only the father's name when talking to someone; it is not their middle name. Do not call them by their mother's last name. Titles is a big status symbol in Mexico, they are used before the first name: Lic. (Licenciado), Ing. (Ingeniero), Dr. (Doctor), etc.

Of course, there will be some language difficulties. Even though most Mexican businesspersons have learned a little of the English business language, they do retain Spanish language speech patterns. Mexicans tend to invert phrases in English. For example, I might say to you, “The budget of my company we have for 2006”, rather than “We now have the 2006 budget for my company completed”. The meaning is always there, but you must listen carefully.

Mexicans also tend to attach the word “NO” to the end of a comment, seemingly turning each statement into a question (isn't it?). Many statements are not actually questions and can be identified as such by body language common to both countries.

A Mexican will occasionally ask a question which seems to degrade something of value to him or her. For instance, he or she might say, “Our city here is quite dirty, no?” the correct response is not, “It sure is!” One should respond to such a phrase with an opposite reply, such as “no, I find Mexico City very nice.”

We must always try to be conscious of what another individual actually means by a comment. As I have mentioned, this can often be achieved by watching body language. For the most part, this remains consistent through out the world. Have in mind that some times in Mexican business circles "yes" can mean no and "no" can mean maybe.

If you want to buy a real estate property in Mexico, location is very important. Make sure you meet people from the area you are planning to buy, because word of mouth is critical to find the good deals and which properties may be available for sale. Real estate transactions in Mexico are carried out different than in the US. It’s a good idea that you retain a local real estate agent with good reputation, but have in mind that there are no especial requirements or brokerage licenses needed to get in the business of selling properties or establishing a Mexican real estate corporation. For real estate transactions you don’t need an attorney, but you do need a notary, which has a complete different role than the US notaries. Notary Publics in Mexico are first licensed attorneys, and then they have to pass a special notary public examination and thereafter are appointed by the Governor of their state to act in a given geographical location. In Mexico, every legal document, such as deeds, wills, powers of attorney, constitution of corporations, establishment of trusts and other legal transactions must be made before a notary public in order to be valid. If the document is not notarized by a Mexican notary public it is not legal. The Notary validates the complete transaction.

If you are going to sell in Mexico, Mexicans do not respond well to impersonal means of communication or of selling. In general Latinos prefer to speak to a human being. It is a culture that is defined by almost everyone as strongly interpersonally oriented. Internet sales in general have not done as well in Mexico, not just based on how many people have access to the Internet, but also to cultural preferences. Also, voice-mail systems are often labeled Hispanic unfriendly.

If hiring some one in Mexico, jobs can be advertised for men or women, with an age range, and marital status specified as well. Before you start hiring people, you should talk to a lawyer, because the rigidities in the law make firing very difficult.

Once a deal has been struck, then the daily interaction between the countries will begin. This is not to say however that things will be easier.

Distribution differences between the two countries will certainly play a large part. Take for instance some of these cultural differences: Mexican businesses do not place an emphasis on actual delivery date. In fact, it is customary to tell a purchaser that the order will arrive “sometime next week”. This practice runs contrary to the U.S. standard of providing delivery times almost to the exact hour, day and gate/dock number.

Remember too that long delays can occur due to lengthy holiday periods which Mexico is accustomed to, especially during numerous religious off work periods like Christmas, Semana Santa (Holy Week or the week before Easter), Our Lady of Guadalupe (December 12th), Mother's day (May 10th or Dia de las Madres), Day of the Death (November 2), Kings Day (January 6 - Dia de Reyes), etc. If one of these holidays falls on say a Wednesday your shipment might not leave until the next Monday. Which is not too bad considering you must allow for even more off time during the Christmas and New Year's holiday period.

In Mexico long weekends or long off work periods, are called “puentes” (bridges) and there is a joke that the longest bridge in Mexico is the “Puente Guadalupe Reyes.” This is because it runs from December 12th, the Day of Our Lady of Guadalupe, to Kings Day on January 6th. The fact is almost everything slows down over this holiday span.

When delivery problems do occur, Mexican managers often claims that “it will be taken care of,” offering no further explanations. Such a situation in the United States can result in loss of continuity, acceptance and possibly removal of shelf space within the trade, and is usually addressed with “the delivery problem will be taken care of and this is how…..”

Mexican and American companies can develop profitable business relationships, but we must work closely to develop and maintain them. As well, the US Mexico cultural differences that I have described do go well beyond having different languages. However, I believe that Mexican businessmen have a great deal of respect and admiration for the United States business people as a whole. If there has been a problem between Mexico and the U.S. it’s been more at the level of government politics than at the level of people to people.

I am sure that more and more US - Mexico business relationships are leading us on the right path and that together if we trust each other, if we take advantage of our strengths and overcome our weaknesses, we can gain great economic and social benefits. Advantages and benefits that are not as easily gained with the European community or the Pacific Rim. Above all, Mexico should not simply be a distant neighbor of the U.S., for it must continue its march towards a more prosperous and stable future.

In Mexico when you are finishing something and almost out of time you say: “I am finishing at 5 to 12” (cinco para las doce). Whereas if I were an American businessman, I would say that “I am finishing in the eleventh hour”. As you can see Mexicans appreciate time differently - we still have time to wait until almost midnight.

I hope that I have been able to properly convey my message - that what works in Mexico does not necessarily work in the United States and vice versa. Yet with a little understanding on and by both sides it is not hard at all for us to work together and prosper.

Speech by Ignacio Hernandez on Doing Business in Mexico.

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