Corruption, bribes, mordidas, tips – Doing business in Mexico

7 11 2006

There are perceptions and realities associated with bribery and corruption when doing business in Mexico.

Corruption, bribery, “mordidas” (translated as “bites”, but are actually bribes) and tips are part of Mexico and the foreigner’s perception of Mexico.

It’s a difficult subject to address because it involves ethical and moral decisions for the foreign visitor or business person. What is culturally OK in Mexico, may be seen as immoral and corrupt by an individual from another country.

Historically, corruption in Mexico is blamed upon the Spanish conquistadors. While corruption no doubt existed prior to the Spanish conquest, they certainly did institutionalize it in government and throughout the Mexican (and Latin American) culture.

Today corruption, bribery and tipping occur at all levels of Mexican society and at many different degrees. For one reason or another it has become part of daily life. Most of it involves small sums of money, and is thought of as tipping and not as a bribe.

In fact, to eliminate corruption in Mexico overnight is unrealistic and would probably result in chaos. As some Mexican observers have noted, “La mordida” is the grease that makes the system work.

All of the following might occur in Mexico. Which of the following are acts of corruption or bribery? Which are totally unethical, somewhat unethical, and no big deal? Which of these events occurs in your country ?

  • The garbage collectors come by every 2 weeks, rings the doorbell and ask for money for a soft drink, US $1 or $2.
  • While waiting in a long line, someone comes up to you and asks if you would like to avoid the line and be attended right away. It will cost US $ 5 to US $ 10, and save you 2 hours.
  • Your application for a permit/license has been in the government office for several weeks, and no one seems to be able to tell you what is wrong. The secretary asks if you would like to buy a raffle ticket for some organization. After buying the ticket the application suddenly appears.
  • You visit a local political leader and take him to dinner and a theater event to discuss your project.
  • At holiday time, you send gifts to politicians, suppliers and business associates.
  • Your daughter copies exam answers from another student at school.
  • The police stop you for a traffic violation (which may or may not have occurred). They suggest that for US $ 20 or $ 50 you can make it disappear, and you’ll be on your way in 5 minutes.
  • You need government agency approvals for your business project. In order to make sure everything is done correctly, you hire an official in the department as a consultant.
  • You require a zoning change on a piece of land, you invite a government official to participate as an investor in the project, or perhaps give him some shares.
  • Your son or daughter wants to get into a nightclub, the doorman says no. They give him US $ 5 and walk right in.
  • A city inspector finds code violations in your restaurant. A call to a family member, who knows someone, who knows someone, results in the violations being revoked.
  • A drug enforcement agent receives a phone call that tells him to choose between accepting USD $ 20,000 payment this year to let a drug shipment go by unharmed or to have his children shot.
  • Your immigration papers are not quite right. There is a document missing. You are able to convince the official (though words and tears) to “overlook” the situation, no money is exchanged.

Can you live and work in Mexico and not pay bribes? Yes. (I’m lived and worked in Mexico over the past 14 years and have never paid a “mordida” in my private or business life.)

Are bribes necessary for doing business in Mexico? I think it depends on the circumstances. Most business can be done without them. It depends on you, and your evaluation of the situation. There must be certain areas where influence peddling, and “mordidas” are an integral part of the business, and other areas where it’s not required in the least. This is not unique to Mexico.

All Mexican local, state and federal governments and government agencies are not corrupt. In fact, in the past 10 years there have been great advances in transparency in government, including guarantees for the time involved in processing applications and permissions.

Mexican federal public policy and local and state governments have been actively reducing and eliminating institutionalized corruption and penalizing government workers involved in illegal acts. There is still a long way to go before it’s completely eliminated, but there has been a noticeable change in many areas.

Mexico’s poverty, unequal distribution of wealth, history and culture make it difficult to eradicate corruption overnight. Mexico is a country with many laws, but they are not well enforced. It’s similar to the temptation one might feel on the lonely country road at 3:00 AM and confronting a red light…..do you stop…or run through it?

You should develop and hold firm to your own ethical and moral principals in order to live and do business in Mexico. If you don’t do it at home, why would you do it in Mexico?

Your company should have a clear policy about corruption and bribery, and hold to it when doing business in Mexico, or internationally.

If you have any personal experiences or observations about corruption, bribery, mordidas and doing business in Mexico, please write me or comment here.
Related Links

How to do business in Mexico, Parts 1 – 28

Tipping guidelines for Mexico

Doing Business in Mexico – cultural tips

World Corruption Perception Index – 2006

Patience chaos and doing business in Mexico

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Lessons in international business – negotiations

17 10 2006

Observations on how to create trust, effective meetings and excellent negotiations with overseas customers, suppliers and partners.

  • Whenever you are involved in international negotiations or global meetings keep in mind that you might be working with the same person for the next 10 – 20 years.
  • Negotiations should be open and straightforward.  Hidden agendas will eventually be discovered and make the next meeting very difficult.
  • Negotiations should involve creating value for both parties.
  • Meetings are important moments where trust is being built and confirmed.  Be honest and clear about your desires.
  • Never agree to something you cannot deliver or perform.
  • Listen, understand and evaluate what your partner is requesting.   What are they saying, and what does it mean.
  • Be certain of what you are negotiating and agreeing to.  If not 100% sure, stop and request clarification.
  • Prepare for the meeting several weeks before it happens.  Refresh and add information weekly.  When you reach the meeting, you will be in control of the information and feel comfortable during the talks.
  • At the end of the meeting, write down the most important points or agreements, with names and dates, and have it signed by those present.  This little tip will save lots of time and trouble for everyone involved.
  • Any agreement must have 100% follow-through.  If for any reason problems arise in the follow-through, immediately contact and communicate the situation to your partner.

Related Links

How to negotiate with Mexican business people

Great international business trip results





Great International Business Trip Results

16 10 2006

In any international relationship communication and understanding are critical for success.

Problems created by; language, stereotypes, misinformation, lack of information, and cultural misunderstandings combine with normal business problems to create a complicated scenario for anyone involved in international relationships and global business.

Prepare your international meetings and business presentations using the following questions as a guide to organize your ideas and focus on actions that will produce positive results for everyone involved.

6 Questions – Create Great International Business Trip Results

  1. What does this organization know about me, my company and my country?
  2. What do they think they know about me?
  3. What can I tell them that they do not know?
  4. What do I know about my international partner, culture and country?
  5. What do I think I know about this business, culture and country?
  6. What can they tell me that I do not know?

1. What does this organization know about me and my company. When you walk in the room an opinion has already been formed about you, your organization, and your ability to perform in the future. These ideas are based upon facts, information and past experience.

  • What has been the history of our relationship in their country?
  • Who has been involved in our mutual business, and why?
  • What promises have been made and kept by both?
  • What promises have been made and not delivered upon?
  • What have the major problems and success been in the past?
  • Press and media, our organizations promotional material.

2. What do they think they know about me. Clarifying the unknowns or presumed realities in a relationship is crucial to success. These ideas may be very damaging and limit your ability to trust one another. What stereotypical behaviour can you avoid or prevent? What can you clarify or refute through information or actions?

  • Behaviour and reacts based upon past experience with your organization.
  • Rumour and innuendo, press and media reports.
  • Negotiation styles.
  • Business objectives.
  • Behaviour, goals and methods of doing business based upon country and cultural stereotypes.

3. What can I tell them that they do not know. Today’s business world requires trust, information and solutions. Reinforcing your need to work with your international partner, providing important information or solutions, and clarifying misunderstandings can only help the relationship.

  • Clarify or destroy cultural stereotypes.
  • Clarify business objectives and why they are important in order to reach these objectives.
  • Provide solutions and alternatives to existing situations and challenges.
  • Provide information of value for their business and strategy.
  • Clearly identify current or potential business problems.
  • Predict and have answers ready for their questions.

4. What do I know about my International partner, culture and country? What do I know is true and not innuendo or interpretation? The numbers, facts, information, agreements and past performance history of the business. Information about the country and the business culture.

5. What do I think I know about this business, culture and country? What preconceived ideas and stereotypes are you working with? What are you assuming and what has been proven?

6. What can they tell me that I do not know? What questions do you need to ask in order to verify information or create plans. What pieces of your information puzzle are missing? This is the time to get your questions answered, what are they?

Related Links

Cultural misunderstanding it can happen to you

Stereotypes and global business

Create great international business relationships

16 Essential questions – the international business traveller’s quiz

Lessons in international business





How to motivate yourself on Monday

2 10 2006

Here we go again, Monday morning, back to work. Need some ideas on how to get pumped up for the week ahead?

1. The survivor approach. Challenge yourself to attack the most difficult work problems first thing today. Admit that it has to be done and might be the most uncomfortable or unpleasant activity you will encounter during the week. Once this is out of the way you’ll be surprised how much easier the rest of the week will be.

2. Send out positive energy. Be cheerful, upbeat and responsive to customers and coworkers. Say hello to everyone, acknowledge their presence. If you encounter grumpy, sad or depressed individuals smile at them and move on. Leave everyone you meet with the impression that you’re happy, full of enthusiasm and motivated today. Sound completely out of character for you? Good.

3. Monday is list execution day. List makers should prepare their weekly to-do lists on Friday afternoon or Sunday evening. When you walk into the office on Monday the plan is waiting for you to dig in and execute it.

4. You are working for you. Remember that you are working in order to achieve your personal goals. The work is part of that process. You are not working for XYZ corporation, you truly are working for yourself. It’s your decision to stay or to leave the company, your future is in your hands. Try that attitude on and see what happens.

5. Make someone proud of you. Everyone has a person or persons in their lives that they love and respect. Who are these people in your life? What could you do today at work to make them proud of you? Do it.

6. Act like an invincible leader. Feeling miserable and trying to spread that misery, gloom, doom and depression to others is a pretty pathetic way to live. Do you like to be around people with this attitude? Why would others want to be around you if you are a walking “cloud of misery and darkness”? You are a victim if you agree to be one.

7. Give yourself prizes. Set some work goals and create rewards for their completion that can be enjoyed on the weekend.

8. Motivation through memories. On the way to work think about the times in your life when you were the most enthusiastic, excited, motivated and happy. Remember the way you felt, identify why you felt so good, relive those experiences.

9. Go to work with a specific mission and deadlines. Make specific commitments for goal completion to others.

10. Decide to take a vacation. Burned out, stressed out, unable to focus, unable to get excited? Take time off, disconnect from work (that means no email, no telephone calls). Recharge your batteries. Figure out when you are going, for how long, with who and where.

11. Let cosmic forces and your subconscious decide. Sit down in a quiet spot, turn off the cellular phone, lock the door and try to clear your mind. In a matter of minutes you will begin to be bombarded with ideas or things you should be doing, and their priorities. Open your eyes, and get started.

12.  Music.  You know the tunes that start your feet tapping or set your soul soaring.  Record them, put them in your I-pod, burn a disk for the car.

13.  Change.  Setting a routine is quite normal, and comforting, but not motivating.  Change something.  Maybe it’s breakfast, the way to work, your clothes…who knows.  Fiddle around with your patterns and routines.

14.  Altruism.  Do something for someone else, without seeking anything in return.  Random acts of kindness.

R elated Links

Showtime – how do you want to live your life

Motivation, what gets you out of bed

10 things you should do on a Friday afternoon





Tipping guidelines for Mexico

13 09 2006

Tipping is always a concern for travellers. In Mexico, tipping is very common and expected, but there are no fixed rules for the amount of the tip. If someone is providing an extra service or favor for you, a tip would be expected and welcome.

You should always have loose change and low denomination bills with you in order to make the transaction effortless.

You should tip with the quantity that you feel comfortable with. I’ve provided some tip guidelines that should help get you started.

Basic guidelines for tipping in Mexico.

  • Restaurants – the normal tip amount is 10% -15% of the bill. There is a national value added tax (IVA) of 15% included on all restaurant bills, this is not the tip, this is a tax.  Many people leave a tip equal to the IVA, 15%, or leave 10% of the total bill that has the IVA tax included.
  • Bellhops and luggage handlers – $ 10 – $ 20 pesos per bag.
  • Hotel maids – $ 20 – $ 50 pesos per day.
  • Taxis – Depends upon the city, type of taxi (meter or negotiated price). If a metered cab, a tip would be expected perhaps 10% of the total. If the taxi is a negotiated price no tip would be expected. If a fixed rate to destination cab (for example airport cabs) a tip would be appreciated $ 10 – $ 20 pesos.
  • Gas station attendants – $5 – $ 10 pesos depending on the level of service
  • Bars – 10% of the total bill
  • Valet parking – $ 10 – $20
  • Grocery store baggers – $ 5

Related Links

How to do business in Mexico

Mexican official (and unofficial) holidays

Advice on what to expect when doing business with Mexico

Tip: How to call Mexico from the US