Management practices across different cultural contexts in Mexico

Mexico

Question #1 asks: Why would multinationals be interested in setting up operations in Mexico? Give two reasons.

The first reason that MNCs are interested in setting up operations in Mexico is that they want access to the Mexican labor supply. The Mexican workforce consists of highly trained segments that represent a significant monetary savings when compared to comparably skilled employees in industrialized nations. There are many other sources of labor in the world that offer a similar labor advantage such as China and India. However another advantage to the Mexican labor force is that production in this labor market will also provide companies open access and tariff savings in the U.S. And Canadian markets which are major international marketplaces.

Question #2 asks: Would cultural differences be a major stumbling block for U.S. MNCs doing business in Mexico? For European firms? For Japanese firms? Explain your answer.u

One obstacle for the U.S. MNCs would be along the lines of collectivism vs. individualism in regards to organizational cultures. The U.S. has one of the most individualistic cultures in the world and Mexico represents more of a collectivist culture; although it is rated higher in individualism than the Latin American average. Research has shown that European firms can successfully expand through mergers and acquisitions and integrate socio-culturally into Mexico market in the pharmaceutical industry (Lupina-Wenger, Schneider, & Dick, 2011). Spanish firms in particular might find the Mexican market attractive since the language barriers would be significantly reduced. Japan could have success in the Mexican market and would find that parts of their organizational cultures are quite similar while other parts are not quite the same.

Question #3 asks: Why might MNCs be interested in studying the organizational culture in Mexican firms before deciding whether to locate there? Explain your logic.