Mexico

LP 3 In the International Spotlight-Mexico

Ch 5,6,7

Question #1.

Multinationals would be interested in setting up operations in Mexico to pay cheaper labor, rather than looking to other countries where labor is much higher.

A second reason why multinationals would set up operations in Mexico, would be to avoid paying tariffs to ship to Mexico (depending on where the country where their corporate headquarters is located). Due to the NAFTA, any country, other than Canada or the United States, delivering to Mexico would be charged tariffs of up to 25%.

Question #2.

I don’t feel that cultural differences would play as a stumbling block for a multinational corporation when operating in Mexico. I think the amount of Mexican workers that are currently working in the United States has prepared most businesses for this move. With the nations neighboring each other, it would still be beneficial for ownership and management to travel to Mexico to study the differences.

If a European firm was to operate a business in Mexico, there could be some disastrous issues. When looking at some key differences, some European nations are strict on being on time for meetings and social occasions, whereas in Mexico there is not as much focus on being on time for meetings and social occasions. It is even normal in Mexico for meetings to be cancelled. Some European nations can be suspicious of early friendliness in discussions whereas in Mexico it is normal to be friendly over being professional.

If an Asian firm was to operate a business in Mexico, I believe that cultural differences will not play a major road block for MNC’s. There are similarities in the way the two cultures begin their day, where their days start of slowly before getting right to business.

Question #3

Multinational corporations would want to study the organizational cultural in Mexico in order to become and maintain success with their company in Mexico. The firm would be able to understand all...