Cultural dimensions of success in Mexico.

• Author: Valadez, Veronica Siller
• Position: Learning Mexican culture to prevent business management problems

Neglecting to learn about Mexican culture could cause problems or even prove fatal to a new venture in this burgeoning market.

Multinational companies establishing production and assembly operations in Mexico can realize substantial profits in the area of labor costs. A caveat: Some significant characteristics within Mexican culture bear thoughtful consideration. American companies considering a position in this rapidly developing market will find very real differences between managing firms in Mexico and in the U.S. Neglecting to learn about Mexican culture could prove fatal for management coming from countries obsessed with efficiency and productivity. Ethnocentric thinking can create costly problems and cause coronaries -- a rare occurrence, incidently, among Mexican people engaged in business.

Industry in Mexico is considerably more than an assembly line. The large work force has an 88% literacy rate, one of the highest in Latin America. Companies such as Ford Motor and Bayer have set up training schools, or even sent workers abroad, then put them at the controls of million-dollar machines in Mexican plants. Because there is still some scarcity of skilled workers in Mexico, firms that train workers for technical skills should be prepared to back up that investment with attractive benefit packages as well. New firms come along and lure skilled workers to their companies with incentives that cost considerably less than training. Mexicans' loyalties are quite different from Americans', who may envision working their entire lives for only one company. Mexican workers are, incidently, protected by some of the strongest labor laws in the world -- laws that give workers complete job protection and that require employers to specify reasons for dismissal, with severe penalties if improperly handled.

Despite problems of skill scarcity, the abundance of unskilled workers creates one of the biggest comparative advantages for Mexico -- low-cost labor. The abundant labor market, and the increase of labor-intensive activity, creates a continuous labor supply and also provides firms with opportunities for bargaining with unions.

One fundamental difference, which is both cultural and technical, is the information infrastructure in Mexico; only 142 persons in 1,000 receive a daily newspaper, only one in eight owns a TV. Jan Du Rietz, a manager for the Swedish-based Ericsson Co., which has telecommunications operations in Mexico, acknowledges that Mexico is an excellent place to do...