Heading for a culture clash?

Two companies had been shortlisted for a major infrastructural contract in Mexico. One was North American, the other Swedish. Both companies were invited to present their proposals to the relevant ministry.

The Americans produced a high-tech, hard-hitting presentation. Senior technical experts, lawyers, and interpreters flew down to Mexico City. All the arrangements had been written down in great detail and sent to the Mexican officials two weeks earlier.

At the agreed time the American team were ready to present, but they had no-one to present to. The people from the ministry arrived at various times over the next hour. They didn't apologise for being late, but just began to chat amiably with the Americans about a wide range of non-business matters. The leader of the American team kept glancing anxiously at his watch. Finally, he suggested that the presentation should start. Though the Mexicans seemed surprised, they politely agreed, and took their seats. 20 minutes later the minister walked in. He looked extremely angry and asked the Americans to start the presentation again from the beginning. 10 minutes later, he started talking to an aide who had just arrived with a message for him. When the American presenter stopped speaking, the minister signalled that he should continue. By this time, most of the audience were talking amongst themselves. When invited to ask questions at the end, the only thing the minister wanted to know was why the Americans had told them so little about their company's history.

Later, during lunch, the Americans were very surprised to be asked questions about their individual backgrounds and qualifications, rather than the technical details of their products. The minister had a brief word with the American team leader and left without eating or drinking anything.

They’re only your rules

Over the next few days, the Americans contacted their Mexican counterparts several times in an attempt to fix a meeting and start the negotiations. They reminded them that they had to fly back to the States at the end of the week. But the Mexicans' response was always the same: “We need time to examine your proposal amongst ourselves first.” At the end of the week the Americans left Mexico angry, frustrated and empty handed.

The contract was awarded to the Swedish company. The Americans had played by what they regarded as the 'rules'. According to their own cultural perspectives on the business world, the Americans did everything they should have done.

But the Americans were over-focusing on their own cultural 'given' that people should be judged solely on what they do. Like it or not, in Latin America people are judged not only on what they do but also on factors such as age, position, and family connections. When the Americans presented to the Mexican team, the Mexicans were not as interested in the technical abilities of the Americans as the Americans assumed. They were much more interested in the fact that the seniority level of the American team was way below that of the Mexican minister and his senior officials. And so, from the Mexicans' perspective, there was no way the negotiation could be conducted on equal terms. To show the kind of respect the Mexicans expected, the American team should have been led by a board member, at the very least. And as the minister himself was involved in the proceedings, a president, chairman or CEO would have been more appropriate.

Another mistake the Americans made was to include lawyers on the team. The US is famously litigious, and US firms will often include lawyers in their negotiating team, if only to ensure that the contracts might pose no future threat to them. This rests on the principle that if things go wrong, the first stop will be the law courts.

For Mexicans, and indeed for business people from many other countries that value warm relationships, business is very personal. You would as soon bring your lawyer during the courting period of a business relationship as you would during the opening exchanges of a new romance. Frequently good business flows from a good personal relationship - rather different from the prevailing attitude that ‘business’ and ‘personal’ issues that need to be kept relatively separate.

Another problem is the different attitudes the two sides have towards time. For us, no-one can expect more than a few moments of grace before tempers start to fray. But for Mexicans, precise punctuality is far less important than cultivating a good atmosphere.