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





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





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