Corporate culture in Mexico: Opportunities and challenges for foreign companies

One of the challenges of setting up a business location in Mexico consists of establishing a suitable corporate culture. Such culture shapes work environment attitude and behavior and therefore is critical for the employees’ satisfaction and productivity. In order to build a suitable corporate culture for Mexico, it is of underlying importance to be aware and understand the local corporate culture as well as its weaknesses.

The traditional Mexican corporate culture and its weaknesses

The traditional Mexican corporate culture is characterized by strong hierarchies, an authoritarian leadership style, low wages and long working hours. As a result, Mexican workers are generally highly dissatisfied with their work situation, which negatively affects productivity.

Due to financial hardship, the job is perceived by many Mexicans as a means to an end. This consists primarily of earning enough money to support the family. In view of the fact that work motivation is material rather than intrinsic, identification with the company is rather low. The lack of a sense of belonging is just as unhelpful for productivity as the unfavorable working conditions.

Changing corporate culture

However, foreign companies have now brought a breath of fresh air into the rigid, traditional structures of Mexican corporate culture. In order to respond to the primarily material motivation of Mexican employees, many foreign companies offer more attractive working conditions, including higher wages. The implementation of material incentives positively affects employee confidence. On a long-term basis, this increases the loyalty to the company as well as productivity and job satisfaction, from which both employees and employers benefit.

Local companies have also started to recognize that investing in trustworthy working relationships and decent working conditions pays off. This is how the Mexican corporate culture is currently undergoing a major transformation, making employers more attractive, employees more satisfied and work processes more efficient.

Building a corporate culture in Mexico

Foreign companies have the opportunity to present themselves as attractive employers within the framework of “cultural change” by setting new priorities. The establishment of a new corporate culture in Mexico offers the opportunity to take advantage of one’s own corporate culture in order to eliminate weaknesses in local structures. However, it is important to note that radical restructuring is often ineffective. Too many changes might lead to confusion and excessive demands. In order to prevent a “culture shock”, a rough orientation towards the existing structures tends to be helpful at first. In this sense, the main difficulty lies in reconciling the advantages of one’s own corporate culture with the structures prevailing in Mexico.

Which specific factors need to be taken into account?

In the first step, it is critical to create fair and attractive working conditions. This does not only mean fair wages: Bienestar (wellness)-programs, flexible, family-friendly working hours, home office or other voluntary benefits such as private health insurance can also be attractive incentives.

Personal relationships are important to Mexicans. This also applies to the work environment. A friendly employer-employee relationship conveys a sense of belonging and creates trust. For foreign companies, the aspect of language also plays an important role in this context: Mexicans dislike speaking English. The ability to communicate in their mother tongue is crucial for Mexican employees. This not only facilitates communication but also increases trust and identification with the company.

One of the biggest challenges in building a corporate culture is to combine hierarchies and initiative in a meaningful way. Many Mexican employees are used to work under controlling and authoritarian conditions. Therefore, even in a non-traditional corporate culture, clear guidelines and hierarchies can make sense. At the beginning, too many personal initiatives might overstrain Mexican employees due to the lack of habit. Nevertheless, other options should be available: the possibility of making one’s own decisions shows the employees they are trusted and are an important part of the company. As responsibility increases, so does interest in the job itself; a motivation that goes beyond fulfilment of material needs.

Further tips on how to motivate your employees and thus improve the corporate culture can be found in our blog. Here, you can read more about Mexican culture in general.