5 Ways in which Cross-Cultural Differences Affect Your Outsourcing

So, you´ve set your eye on Mexico to outsource your manufacturing. This means you are aware of some significant numbers, such as:

• Labor costs are 14.6% lower in México than in China
• There are over 1,200 logistics and distribution cluster companies in the Cali-Baja region
• American trade with Mexico has grown by nearly 30 percent since 2010, to $507 billion annually
• Foreign direct investment in Mexico last year hit a record $35 billion.

This hard data shows confidence among American companies on Mexico´s outsourcing capabilities.

However, when it comes to setting up a successful operation in Mexico, you´ll need knowledge that goes beyond numbers. Intangible cultural differences can make or break a business, so it is essential to be able to handle them.

It´s not all about money

We may think that when it comes down to business, money does all the talking, but that´s not always the case.
Inadvertently hurting sensitivities of your foreign counterparts can result in doors closing, deals falling apart and overall lack of cooperation.
On the other side, showing cultural savvy can expedite things and make everyone, from factory owners to workers, go the extra mile for you. Gone are the days where it could all be solved by handing out “mordidas” (bribes).

Why it matters :Today, this practice may actually destroy your credibility and cause legal problems.

Here is a list of significant cultural differences between Mexico and the US, compiled from academic studies, and my opinion on how they can affect business dealings:

No. 1

MEXICO. Difficulty separating work and personal relationships

U.S. Separates work from emotions/ personal relationships

Why this matters: In Mexico, business agreements often happen after a long lunch/dinner, rather than at the meeting room. If you feel things are not moving forward, you may try to this technique to build trust.

No. 2

MEXICO. Shuns confrontation.

U.S. Direct and frank communication style.

Why this matters: Macho images notwithstanding, Mexican business people pride themselves on their diplomatic skills. They are polite and courteous, even if this may hinder frank communication. You may need an insider to read non-verbal clues and understand if things are going your way.

No. 3

MEXICO. Dress and grooming are status symbols

U.S. Appearance is secondary to performance.

Why this matters. While Mexicans are open to differences in dress and manners, dressing nicely shows respect towards them, while making you gain theirs.

No. 4

MEXICO. Proud of long history and traditions

U.S. Proud of the “American Way of Life”

Why this matters. A recent employee satisfaction survey at a large maquiladora in Tijuana found that workers were unhappy about the cancellation of the annual Mother´s day picnic and Christmas event. This complaint ranked higher than comments regarding salary and benefits.

No. 5

MEXICO. Truth is a relative concept

U.S. Truth is seen as an absolute value

American companies need to be sensitive towards important dates such as these to keep worker morale up and attract the best workforce members.

Why this matters. My experience working as an outsourcing broker for American companies has taught me that this is a particularly sore point of conflict between the cultures. It leads American companies to see problems where Mexicans don´t. Here again, it takes an experienced person to distinguish between issues that may affect quality and deadlines and to handle them in a way that will yield the desired results -and not alienation and hostility.

Nevertheless, everyone agrees on this:

You can´t extend Christmas.

And at the end of the day, that´s what are all working for.