How to speed up business decisions in Mexico

13 11 2006

When doing business in Mexico, one of the fundamental complaints I hear from non-Mexican business people is the speed at which business in transacted.

They say there are 5 speeds to the Mexican economy, I believe they also apply to negotiations in Mexico.

1. Slow.

2. Slower.

3. Stalled.

4. Going in reverse.

5. Dead.

It can be quite frustrating, but it is part of Mexican business culture.

There are several options available that may help speed up the decision-making process in Mexico.

  • Make certain you are both working for the same goal. Write it down, discuss it, and determine that everyone is seeking the same thing. There should not be any hidden agendas.
  • Set fixed and specific dates when the data or information must be available or the decision will be made. Get personal commitments from the other participants. Don’t settle for vague answers, get them to agree in public to bring the specific data or make the decision on a specific date. Personal, not institutional responsibility.
  • Does everyone have all the information required to make the decision? Write down what is missing and assign responsible parties and dates for completion.
  • Follow-up with phone calls and written communication and verify that everything is running on schedule. You will have to dedicate more time to “motivating” or “prodding” than you are used to in your own country.
  • Don’t get angry. If there is no decision it is because of a reason you don’t understand or hasn’t been verbalized. Anger is seen as threatening, and not part of a good relationship, it will hurt you more than help you.
  • Be patient. It always takes longer than you think it will.
  • Keep up the communications, in fact increase them. Contact all the team members involved, try and discuss the project or decision informally (outside of the office or work environment).
  • It might be the money. When everything looks perfect, and still no decision, it might be due to money (or lack of it). Try and discuss this privately with the head decision-maker.
  • It might be the risk or control involved. Bring the subject out in the open and discuss the risks and control issues involved for both sides. This is best done informally with the team members, one on one.
  • It might be NO. Mexicans do not like to say no or give bad news in certain situations. They believe it is impolite, and many times will not respond or will allow the situation to continue until it fades away without a “yes or no” decision being made.

Related Links

Patience Chaos and doing business in Mexico

Doing Business in Mexico – cultural tips

How to negotiate with Mexican business people

How to do business in Mexico





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





World Corruption Perception Index 2006 – Transparency International

7 11 2006

Interesting look at perceived corruption worldwide.

Transparency International has released their 2006 index of corruption perception on November 6, 2006.

Mexico lands at number 70 on the list, which puts it close to the middle of the pack out of a total of 163 countries.

Since 1995, Transparency International has published an annual Index of perception of corruption ordering the countries of the world according to “the degree to which corruption is perceived to exist among public officials and politicians“. The organization defines corruption as “the abuse of public office for private gain. ” – excerpt from Wikipedia Corruption Perception Index.

As this index is based on polls, the results are subjective and are less reliable for countries with fewer sources. Also, what is legally defined, or perceived, to be corruption differs between jurisdictions: a political donation legal in some jurisdiction may be illegal in another; a matter viewed as acceptable tipping in one country may be viewed as bribery in another. Thus the poll results must be understood quite specifically as measuring public perception rather than being an objective measure of corruption.

Statistics like this are necessarily imprecise; statistics from different years are not necessarily comparable.” – Wikipedia Corruption Perception Index.

Related Links

Internet Center for Corruption Research

Corruption Perception Index – 2006 (EXCEL)

Transparency International

Wikipedia





The definitive guide on how to dial to Mexico

4 11 2006

Starting today, November 4, 2006 there are changes on how to dial to cellular phones in Mexico.

The program called “El que llama paga”, which means “whoever calls, pays for the call”, allows you to call any cellular phone in Mexico and the recipient of the call does not have to pay. Previously the cost of the call was shared between both parties.

If calling Mexico from out of the country (International long distance):

  • To a fixed landline phone: the exit code of the country (in the USA – “011”) + 52 + area code + telephone number
  • To a Mexican cellular phone: the exit code of the country (in the USA – “011”) + 52 + 1 + area code + telephone number

If in Mexico, calling from a fixed landline phone to a Mexican cellular phone

  • To a cellular phone in the same city: 044 + area code + telephone number
  • To a cellular phone in another city: 045 + area code + telephone number
  • To a Nextel of the same city: telephone number
  • To a Nextel of another city: 01 + area code + telephone number
  • From a fixed landline that is NOT Telmex to a cellular phone of another city:  01 + area code + telephone number

If in Mexico, dialing from a cellular phone

  • To a fixed landline in the same city: telephone number
  • To a fixed landline in another city: 01 + area code + telephone number
  • To a cellular telephone in the same city: area code + telephone number
  • To a cellular telephone in another city: 045 + area code + telephone number
  • To a NEXTEL: telephone number
  • To a NEXTEL in another city: 01 + area code + telephone number

Related Links

How to call Mexico from the USA

Changes for dialing long distance to cellular phones in Mexico





Use of business titles in Mexico – Doing Business in Mexico

3 11 2006

The use of business titles in Mexican business life is important.

Most people with professional degrees are addressed using their professional title. This is especially true in written communication. Failure to do so can be seen as lack of education and offensive.

Until you get to know a person, always use the professional title or full name, never address them by their first name until it is clear that they are comfortable with this.

You can ask how they wish to be addressed if unsure. It’s better to make a mistake on the side of formality.

Some titles are general, and when in doubt regarding the professional title, you should use these:

  • Joven – refers to any young man from birth to adolescent.
  • Señor (Sr.) – refers to any male older than an adolescent.
  • Don – a term of great respect used to recognize older males.
  • Señorita (Srta.) – refers to any unmarried female. Once a woman is above a certain age, she is referred to as Señora, even if unmarried.
  • Señora (Sra.) – refers to any married or widowed woman.
  • Doña – a term of great respect used to recognize older females.

Professional titles

  • Doctor (Dr.) masculine, or Doctora (Dra.) feminine – Refers to anyone with a PhD. or Medical Doctors degree.
  • Licenciado (Lic.) masculine, or Licenciada (Lic.) feminine – refers to anyone with a law degree (most common usage) or Bachelor’s Degree.
  • Contador Publico (C.P.) – refers to anyone with a public accounting degree.
  • Ingeniero (Ing.) – refers to someone with an engineering degree.
  • Arquitecto (Arq.) – Refers to anyone with an arquitectural degree.
  • Diputado (Dip.) masculine, or Diputada (Dip.) feminine – refers to a publicly elected official equivalent to Federal, State or Local representative in the USA.

Related Links

Doing Business in Mexico – Cultural Tips

Patience, Chaos and Doing Business in Mexico

How to do business in Mexico

Criticism – how to do business in Mexico

Meeting people in Mexico

How to negotiate with Mexican business people

How to call Mexico from the USA





Doing Business in Mexico – cultural tips

1 11 2006

When doing business in Mexico you are very likely to see some, or all, of the following during a business trip. It’s part of the Mexican business and social culture.

  • Late arrival for meetings by participants. This might be up to 30 to 45 minutes late.
  • Cancellations at the last minute.
  • Changes in agreed upon plans and agendas.
  • Long lunches or dinners, where business talk is not the major theme.
  • Meetings that seem to go on for a long time before coming to the business issue.
  • People will gesture and use their hands a great deal while speaking.
  • There will be a degree of emotion in business discussions and presentations.
  • People will be very formal and polite.
  • People will sit very close to you when speaking, and often touch your arm or shoulder while talking.
  • Your Mexican partners will not be forth coming and explicit regarding bad news.
  • You will not hear the word NO a lot.
  • Deadlines may not be met for reasons that you don’t understand or don’t believe.
  • Until you establish a social relationship with your Mexican business partners, your business discussions will seem very vague, cold and unsatisfying.
  • Decision-making may be extremely swift or excruciatingly slow. You never will know why.
  • Dinners, parties, weddings and social gatherings last for hours. There is no such thing as a 2 hour cocktail party.
  • You will be encouraged to eat everything, drink plenty and enjoy yourself while in Mexico. Failure to do this is seen as a refusal of hospitality or a sign that you are not comfortable in Mexico or with your hosts.
  • In a social gathering the men will tend to congregate in one part of the room or table and the women in the other.

 

Related Links

 

Patience, Chaos and Doing Business in Mexico

How to do business in Mexico

Criticism – how to do business in Mexico

Meeting people in Mexico

How to negotiate with Mexican business people

How to call Mexico from the USA

Great International Business Trip Results

16 Essential questions – the international business traveller’s quiz





International Business – cultural mistakes

31 10 2006

Good advice for international travellers, on how to avoid being seen as the “ugly American”.   Are you the ugly American by Erin Richards, Budget Travel.

Remember that every action, comment, reaction, criticism and gesture is being watched and evaluated by your hosts, counterparts and clients when you are in their country.

Look for and work to find the similarities in your cultures and interests.

Humility and and stopping to think before acting will go a long way toward improving your relationships and international cultural and social skills.

Related Links

Cultural Misunderstanding- it can happen to you

International Business Tips

Great International Business Trip Results

16 Essential questions – the international business traveller’s quiz

Lessons in international business

Stereotypes and global business

Are you the ugly American