Cross cultural Management Project

CROSS CULTURAL MANAGEMENT

LATIN AMERICA MEXICO AND VENEZUELA

SUBMITTED BY:

MODAK PRIY ( 08XPGDM31)

LATIN AMERICA – Mexico and Venezuela Mexico

Introduction Three times the size of the state of Texas, Mexico has a population of almost 88 million. The ethnic composition of the country is 60 percent mestizo (a mixture of Indian and European), 30 percent Amerindian, 9 percent white, and 1 percent other. Mexico is a federal republic. Spanish is the official language of Mexico, although over 100 Indian languages are also spoken. English is widely understood by educated people and in urban centers. There is no official religion, but almost 90 percent of Mexicans are Roman Catholic. Protestants account for around 5 percent. Mexico is one of the United States’ most important trade partners. It is the third largest exporter to the United States, and its international trade products include oil exports, tourism, and the products of its many assembly plants (called maquiladoras). Most of the labor force is employed in the agricultural sector. Trivia One must know a person before doing business with him or her, and the only way to know a person in Mexico is to know the family. Personal relationships are the key to business success. It is called Confianza (trust) which means importance of having personal relationship between interactants. In order to make this connection intermediaries are used. It is critical, especially for a high ranking meeting, to use a person who is known to the Mexican businessman or woman you are meeting. This is your "business family" connection, the person who will introduce you. This person is the bridge that builds the trust necessary to do business in Mexico. Mexicans are warm and gracious. They embrace the manana attitude ("Why do today what can be put off until tomorrow?"), and do not embrace the time-is-money mentality of many other cultures. The old Mexican saying is that "North Americans live to work, but Mexicans work to live!" Respect their sense of time and traditions. If your natural tendency is to speak quickly or you have a forceful or sharp tone of voice, 2

become aware of how you are coming across. Become sensitive to the pace and tone used in Mexico. Otherwise you will destroy a relationship with your caustic tone and behavior.

Culture in Mexico •

Religion in Mexico: Over 50% of Mexico’s population practices the Catholic religion.

* WORLD FACTBOOK 2002

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Appearance •

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Men should wear a conservative dark suit and tie. Your wardrobe should include suits that have classic lines and tailoring in gray or navy, and white or light blue shirts. A white shirt is more formal and should be worn when the formality of the meeting dictates. Women should wear a dress or skirt and blouse. A classic suit may also be worn. Build a wardrobe using classic lines, classic skirt lengths, and basic classic colors - gray, navy, white, and ivory. Men may wear pants and a light shirt for casual. Plan a casual wardrobe using the classic colors, plus camel, and you will be casual, yet polished. Should you have the opportunity to wear a guayabera, the wonderful traditional lightweight shirt, you wear is out over your pants. This design is very comfortable in warmer weather. Women may wear a blouse with pants or a skirt for casual. To present yourself as professional and polished, even in an informal setting, build your casual wardrobe using classic shades of gray, blue, camel, white and ivory. Jeans are generally not appropriate, and tight or low cut clothing is never appropriate. 3

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Standing with your hands on your hips suggests aggressiveness, and keeping your hands in your pockets is impolite. Mexicans may not make eye contact. This is a sign of respect and should not be taken as an affront.

Behavior • • • • •

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Men shake hands upon meeting and leaving, and will wait for a woman to be the first to offer her hand. Women may shake hands with men and other women. Many times a woman may pat another woman's shoulder or forearm, or kiss on the cheek. Long-time friends may embrace, and after several meetings you may also be greeted with an embrace. Punctuality is not rigid because of the emphasis on personal obligations. The best time for appointments is between 10:00 a.m. and 1:00 p.m., with late afternoon a second choice. Business lunches, rather than dinners are the traditional form of business entertaining and are usually prolonged affairs, beginning between 2:00 and 3:00 p.m. and lasting three to four hours, with little time being devoted to actual business. Lunches are an essential part of business to establish a personal relationship. Working breakfasts are also popular, meeting at 8:00 or 8:30 at your hotel, and usually lasting two hours at the most. Conversations take place at a close physical distance. Stepping back may be regarded as unfriendly. Mexican men are warm and friendly, and make a lot of physical contact. They often touch shoulders or hold another’s arm. To withdraw from this touch is considered insulting. Giving gifts to business executives is not required. Small items with a company logo (for an initial visit) are appreciated. Secretaries do appreciate gifts. If giving a valuable gift, such as perfume or a scarf, present it on a return visit. A man giving it to a female secretary should indicate the gift is from his wife. Gifts are not required for a dinner guest, but will be appreciated. Good choices are candy, flowers (sent ahead of time), or local crafts from home. When giving flowers: yellow – represent death, red – cast spells, and white – lift spells. Do not give gifts made of silver, as it is associated with trinkets sold to tourists. Women should not invite a male counterpart for a business dinner unless other associates or spouses attend. Also, Mexican 4

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men will graciously attempt to pay for a meal, even though you are hosting it. A professional way to host a meal is to dine or lunch at your hotel. Pre-arrange to have the meal added to your hotel bill. Tipping is appropriate for services provided. Wages are often so low that workers depend heavily on gratuities for their income. Pay for store purchases by placing money in the cashier’s hand, rather than on the counter.

Communications • • • • •

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Refrain from using first names until invited to do so. Titles are important and should be included on business cards. You may directly speak to someone by only using his or her title only, without including the last name. Doctor is a physician or Ph.D. Profesor it the title for a teacher. Ingeniero is an engineer. Arquitecto is an architect. Abogadois a lawyer. People without professional titles are addressed using Mr., Mrs., or Miss and his or her surname. Senor is Mr., Senora is Mrs., and Senorita is Miss Hispanics generally use two surnames. The first surname listed is from the father, and the second surname listed is from the mother. When speaking to someone use his or her father’s surname. A married woman will add her husband's father's name to the end of her name, usually shown as de (name) when written. This woman would be formally addressed as Senora de (name). In speaking to this same married woman less formally, you would simply say Senora (name). Do not use red ink anytime you are writing someone's name. The traditional toast in Mexico is Salud (Sal-UUD). Mexican’s use a "psst-psst" sound to catch another’s attention in public. This is not considered rude. Mexicans refer to people from the United States as North Americans. Good conversational topics are Mexican culture, history, art, and museums. Never discuss the Mexican-American war, poverty, illegal aliens, or earthquakes.

Venezuela

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Introduction The population of Venezuela is 20.2 Million with an ethnic makeup of 70 percent mestizo, and the rest – Spanish, Italian, Portuguese, Arab, German, and African. Only 2 percent of the population is pure-blooded Amerindian. The capital of Caracas, has approximately 3.2 Million people within its city limits. Venezuela is a federal multiparty republic, with a president who is both chief of state and head of government. The cabinet, or Council of Ministers, has twenty-six members. There is a bicameral congress, composed of the Chamber of Deputies and the Senate, and the judiciary is represented by the Supreme Court. Elections are held every five years. The official language is Spanish. English and a variety of Amerindian dialects are spoken. There is no official religion, but the vast majority of people are Roman Catholic (96 percent). Trivia In Venezuela, there are two generations with distinct differences doing business. The older generation will want to get to know you personally first, rather than your company or firm. The younger generation may have been educated in the United States and will typically want to relate more to your business dealings or company, rather than to you personally. Columbus discovered the area of Venezuela in 1498. Culture in Venezuela •

Religion in Venezuela: Over 50% of Venezuela’s population practices the Catholic religion.

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* WORLD FACTBOOK 2002

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Appearance • • • •

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Dress for men is conservative – dark business suits of tropical weight wool Fashion is very important to Venezuelan women. Women should pack their best business clothes and one cocktail dress People tend to stand very close together when conversing. Venezuelans often touch each other’s arms or jacket during conversation Posture while seated is important; avoid slouching

Behavior • • • • • • • • • • •

Business people are punctual and small talk is minimal It is good practice to follow up morning appointments with an invitation to lunch Have business cards printed in English on one side and Spanish on the other. Be sure your position is clearly indicated and present your card immediately following an introduction Unlike lunch, dinner is for socializing, not for business Businesswomen should be aware that going out alone with Venezuelan businessmen may be misconstrued The two senior executives should sit facing each other When dining, wait until everyone is served before beginning to eat Guests rarely sit at the head of the table To indicate you have finished eating, place your utensils in parallel and diagonally across your plate An appropriate gift for a man is something for the office - such as a good quality pen. A women would appreciate the gift of an orchid – the national flower Guests may bring or send flowers or candy to a hostess 7

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The senior visiting business person may give a toast offering good wishes for business negotiations, adding a memorized Spanish phrase about the pleasure of being with Venezuelans

Communications

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Handshaking by both sexes common and customary; shake hands on greeting and departing. The handshake is firm Good friends hug and women kiss cheeks Avoid dominating the conversation. Venezuelans like to be in control Titles are important and should be included on business cards. Address a person directly by using his or her title only. A Ph.D.D or a physician is called Doctor. Teachers prefer the title Profesor, engineers go by Ingeniero, architects are Arquitecto, and lawyers are Abogado. Persons who do not have professional titles should be addressed as Mr., Mrs., or Miss, plus their surnames. In Spanish these are: • Mr. = Senor • Mrs. = Senora • Miss = Senorita Most Hispanics have two surnames: one from their father, which is listed first, followed by one from their mother. Only the father’s surname is used when addressing someone Good conversation topics: business, art, literature, history Bad conversation topics: local unrest, inflation, politics

CROSS CULTURAL ISSUES WHICH IMPINGE ON BUSINESS BETWEEN THE TWO COUNTRIES USING GEERT HOFSTEDE’S CULTURAL DIMENSIONS MEXICO Mexico's highest Hofstede Dimension is Uncertainty Avoidance (UAI) (82), indicating the society’s low level of tolerance for uncertainty. In an effort to minimize or reduce this level of uncertainty, strict rules, laws, policies, 8

and regulations are adopted and implemented. The ultimate goal of this population is to control everything in order to eliminate or avoid the unexpected. As a result of this high Uncertainty Avoidance characteristic, the society does not readily accept change and is very risk adverse. Mexico has a low Individualism (IDV) ranking (30), but is slightly higher than other Latin countries with an average 21. The score on this Dimension indicates the society is Collectivist as compared to Individualist. This is manifest in a close long-term commitment to the member 'group', be that a family, extended family, or extended relationships. Loyalty in a collectivist culture is paramount, and over-rides most other societal rules and regulations. The society fosters strong relationships where everyone takes responsibility for fellow members of their group Mexico has the second highest Masculinity (MAS) ranking in Latin America (69). This indicates the country experiences a higher degree of gender differentiation of roles. The male dominates a significant portion of the society and power structure. This situation generates a female population that becomes more assertive and competitive, although not at the level of the male population. Another Dimension in which Mexico ranks higher than other Latin neighbors is Power Distance (PDI) with a rank of 81, compared to an average of 70. This is indicative of a high level of inequality of power and wealth within the society. This condition is not necessarily subverted upon the population, but rather accepted by the culture as a whole.

VENEZUELA

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While Venezuela is similar to other Latin American countries when analyzing Hofstede's Dimensions, it does has unique characteristics by possessing extremes in all four Hofstede Dimensions - three on the high end of the scale and one on the low end. The first significant exception is that unlike all other Latin countries, except Panama, Venezuela's highest Dimension ranking is not Uncertainty Avoidance (UAI). Venezuela's highest ranking Dimension is Power Distance (PDI) with an 81, compared to an average of 70 for the average of all other Latin countries. This is indicative of a high level of inequality of power and wealth within the society. This condition is not necessarily subverted upon the population, but rather accepted by the culture as a whole. Venezuela's Uncertainty Avoidance (UAI) of 76 is slightly below the Latin average of 80, indicating the society’s low level of tolerance for uncertainty. In an effort to minimize or reduce this level of uncertainty, strict rules, laws, policies, and regulations are adopted and implemented. The ultimate goal of this population is to control everything in order to eliminate or avoid the unexpected. As a result of this high Uncertainty Avoidance characteristic, the society does not readily accept change and is very risk adverse. Venezuela has the highest Masculinity ranking among the Latin countries at 73, compared to an average of 48. This indicates the country experiences a higher degree of gender differentiation of roles. The male dominates a significant portion of the society and power structure. This situation generates a female population that becomes more assertive and competitive, although not at the level of the male population. Venezuela has a very low Individualism (IDV) ranking at 12, compared to other Latin countries (average of 21). The score on this Dimension indicates the society is strongly Collectivist as compared to Individualist. This is manifest in a close long-term commitment to the member 'group', be that a family, extended family, or extended relationships. Loyalty in a collectivist culture is paramount, and over-rides most other societal rules and regulations. The society fosters strong relationships where everyone takes responsibility for fellow members of their group.

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Cross Cultural Issues impinging business between two Countries Generally, cross cultural issues arise when the people from two different countries while dealing with each other are confronted with misunderstandings. This has a negative impact on the business between two countries. Main reason behind such misunderstandings is either cultural difference but more so is the lack of understanding of cultural references through which culture manifests itself. So, keeping this in mind, we can measure the cross cultural differences between two countries with the help of Greet Hofstede. With the help of this model, we have notes following Cross Cultural Issues between Venezuela and Mexico – Dimension Time Orientation Uncertainty Avoidance

Power

Venezuela (Old Business) Polychronistic; time is flexible

Venezuela (New Business) Monochronistic ; people value puntuality High High Avoidance; Avoidance; seeks thorough seeks thorough information information before making before making any decisions any decisions

High Power; defers to authority with little or no resistance Masculinity High Masculine; men hold authority Individualism / Highly Collectivism Collectivistic; place value on group well being and there is no place for individuality

High Power; defers to authority with little or no resistance High Masculine; men hold authority Highly Collectivistic; place value on group well being and there is no place for individuality

Mexico Polychronistic; time is flexible Very High Avoidance; seeks thorough information before making any decisions and want to clear everything upfront High Power; defers to authority with little or no resistance High Masculine; men hold authority Collectivistic; place value on group well being but sometimes individuality do creep in

Impinges arise due to differences in various dimensions like Uncertainty Avoidance. In Venezuela though it is high but still it is lower than that of Mexico. So Mexicans seeks to avoid uncertainty or risks through the

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means of high control which is generally in one or more of the following form – 1. A strong bureaucracy 2. A low social mobility 3. Importance of Age Hence any of these factor may fact as an impingement between the businesses of two countries. Another main impingement is the type of businessman you are dealing with. For example if you are dealing with Monochronistic type then you must be aware of the following 1. Time is perceived as line going from past to the future and can be act according to specific action. Punctuality matters a lot. 2. Only one thing at a time is good enough. 3. These are high on uncertainty avoidance, agenda is strictly followed. 4. Implementation or Execution of work has a priority over the relationships. 5. This type of societies value time. However, if it is a Polychoronistic type of society, then you must be careful about 1. People are tempted to do several things at once. 2. Since, many things are done at a time, they are interrupted often, which might result in delays and wastage. 3. Relationships have priority over execution or implementation. 4. Punctuality is relative. 5. Projects and appointments tends to get postponed. 6. Lending or exchanging personal goods are common. Business lunches are a good example to show the difference between polychronism and monochronism. In the first case this lunch can be used to sign a contract but even if it is the real object of the meeting it is not the only topic discussed: therefore pleasure and work take place at the same time. In monochronic societies this lunch will generally be arranged after the signature the contract: thus pleasure and work are not mixed. So, we feel that these are main issues that may act as an impingement in business between Venezuela and Mexico. Otherwise, these countries have many commonalities as explained in above mentioned table. Following are some of the general rules which must be followed by the business while doing business in any Latin American Country.

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Rules for communicating with Latin American Businesses Goal Initiating Contact Using Titles Showing Respect Knowledge Culture Building Relationship

Method Offer polite self-introduction, goodwill statement for reader, associates and friends Use of senor, senora or professional titles; avoid first names on initial and early contacts; include Mother’s maiden name in correspondence Use at least some of reader’s language; show interest and in reader’s country and company of

Develop personal rapport first; inquire about family; communicate frequently; visit country or offer to host; Giving Gifts Send of bring gifts to potential associates Handling Bad Present news implicitly and with high regard for News reader’s feelings and reputation Maintaining Frequently use pronouns; express formal, yet Personal Tone personal, goodwill for family and associates

Learning’s Cross Cultural Management enables oneself to keep a good balance between the respects for local environment and need to keep some of one’s own business practices. Thus it allows you to inculcate the attributes of both the cultures. It is a wrong notion that cultural differences happen only between two foreign countries, these can arise within a country also. So, one must be careful to manage these differences also. Hence, it becomes imperative not to underestimate the cultural issues between the foreign countries that have same language like in our case the Official Language of both Venezuela and Mexico is Spanish. Therefore in order to enable the smooth functioning of business, to reduce the feeling of anxiety or frustration due to these cultural issues, we suggest following steps for a businessman – 1. Get information about the country you are going to well in advance. 2. Try to learn the language: without this you will feel handicapped while negotiating and communicating. 3. Accept to take part in activities of the country. It will provide you with the opportunity to gel well with their culture. 4. Be aware of the complexity of any foreign culture. 14

5. Acknowledge the influence of your own culture. Bear in mind that while travelling abroad people carry a part of their culture with them. 6. Be patient towards the natives and try to understand them. 7. Be ready to modify your own habits, attitudes, values etc. References • • •

Differences in work/family orientations: workforces in Venezuela, Chile, Mexico and the United States, Kelly C. Strong, Joel D. Nicholson, Warren R. Nielsen, Cross Cultural Management: An International Journal http://en.wikipedia.org Beyond Hofstede : Cultural Applications for communicating with Latin American Businesses, William Wardrope, Proceedings of 2005 Association for Business Communication Annual Convetion

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