MEXICAN MANAGEMENT STYLE

By Alan S. Gutterman1

Abstract

In general, Mexican management style follows the high power distance and collectivism

found in Mexican societal culture and this means that Mexican firms are more likely to

adopt hierarchical structures with power vest at the top of the pyramid and introduce and

follow formalistic relationships between managers and workers; however, the apparent

rigidity of hierarchy and formalism is tempered to some degree by a relatively casual

approach to rules and regulations. Paternalism and a sense of extended family are also important factors of Mexican management styles. There is evidence, however, that

the consultative management style is becoming more acceptable in Mexico.

Mexico is considered to be a high power distance society, at least in relation to countries

such as the US2, and this means that Mexican firms are more likely to adopt hierarchical

structures with power vested at the top of the pyramid and introduce and follow

formalistic relationships between managers and workers; however, the apparent rigidity

of hierarchy and formalism is tempered to some degree by a relatively casual approach to

rules and regulations. The hierarchical structure seen in Mexican business organizations

follows the model that has traditionally existed in the church and in government and there

is typically a director general or president who has come up through the ranks to

assume that position and who generally deals only with a small group of senior managers

who report to the executive and are expected to show respect to the executive and take

and carry out the executives directions without question. These senior managers,

1 The material in this report is derived from a discussion that will appear in Organizational Management and Administration: A Guide for Managers and

Professionals by Dr. Alan S. Gutterman and is presented with permission of Thomson

Reuters/West. Copyright 2012 Thomson Reuters/West. For more information or to order

call 1-800-762-5272. Dr. Gutterman is the Director of the GL&B Institute for

Management Training and Studies [www.guttermanmanagement.org], which includes the

Country and Regional Management Studies Program

[www.alangutterman.typepad.com/glb_crms]. 2 See, e.g., G. Hofstede, Motivation, Leadership and Organization: Do American

Theories Apply Abroad, Organization Dynamics, 9 (1980), 42-63, 51-54; M. Marchese, "Matching Management Practices to National Culture in India, Mexico,

Poland, and the U.S.", The Academy of Management Executive, 15(2) (2001), 130-132

and C. Robert, T. Probst, J. Martocchio, F. Drasgow and J. Lawler, "Empowerment and

Continuous Improvement in the United States, Mexico, Poland, and India: Predicting Fit

on the Basis of the Dimensions of Power-distance and Individualism", Journal of Applied

Psychology, 85(5) (2000), 643-658.

assumed to have the trust of the executive, are given authority to make many decisions

relating to their division, department or function.3

Non-managerial employees usually have little or no authority and are reliant on their

managers and supervisors for directions. Formalism is very important in Mexican firms

and managers rarely interact directly with employees at Mexican manufacturing plants

and construction facilities, instead managers give instructions to supervisors who then

pass them along to the employees. However, employees accept their distance from

managers as the way things should be and are willing to work hard to complete the

instructed tasks as long as they believe that their managers and supervisors are wielding

their authority in a kind, sensitive and respectful manner. If employees believe that the

executive, senior managers and supervisors can be trusted, then there is a strong

likelihood that there will be good labor and community relations. Loyalty of a firm to its

employees is highly valued and illustrative of Mexicos paternalistic management

system in which firms take care of their employees and their families.4

The strong tendency toward high power distance and formalism observed in Mexican

firms would appear to rule out the effective use of certain management practices

commonly deployed in lower power distance countries such as the US. For example,

while employees, particularly employees who have been working with the firm for

extended periods, would certainly be able to make contributions to debates on how

particular projects and activities should be conducted, employee involvement in decision

making in Mexico is not typical and, in fact, managers that seek opinions from employees

may actually be perceived as weak and indecisive and lose respect and trust. Similarly,

efforts by managers to establish channels for upward communications that employees

might use to pose questions to management or make suggestions to management are

likely to go unused since Mexican employees are simply not comfortable with appearing

to raise problems or providing input on matters perceived to be outside of their place in

the overall hierarchy.5

The paternalism referred to above also follows from the strongly collectivist nature of

Mexican societal culture, which is clearly evidenced in the way that Mexican companies

are expected to care for their workers and their families and preference for harmonious

relationships in the employer-employee relationship. It has been observed that having a job is viewed as a social right in Mexico and that Mexican workers believe that society

owes them a job and that the job should not just be an exchange of money for labor but

should be a relationship in which the employer assumes moral and family responsibility

3 R. Schuler, S. Jackson, E. Jackofsky and J. Slocum, Jr., "Managing human resources in

Mexico: a cultural understanding". Business Horizons. FindArticles.com.

http://findarticles.com/p/articles/mi_m1038/is_n3_v39/ai_18348268/ [accessed June 12,

2011] 4 Id.

5 Id.

for all of its employees.6 As such, employees are seen as the extended family of the

company executive and receive a wide range of services and benefits, all of which are not

seen as extra but as simply part of the way in which the employer is expected to fulfill its societal obligations.

7 In return, Mexican workers are expected to be loyal and hard-

working.8 Related to the notion of extended family is the desire for harmony and the

relatively low tolerance for adversarial relations in Mexican organizations. Obedience and respect between managers and employees is the preferred situation and Mexican

managers generally avoid practices that may cause tension among groups of workers.9

Notice should be taken, however, of interesting changes in Mexican managerial styles

and practices. For example, Jimenez et al. conducted a study of 20 manufacturers and

distributors in Mexico to determine, among other things, whether managers of those firms

continued to use the authoritative management style. The average number of employees

among the surveyed firms was 111 and they had average annual sales of approximately

$3.1 million. The researchers relied on data collecting using the shorter version of a

study instrument developed and popularized by Likert10

and found that, based on

Likerts scoring system, managers in the surveyed firms tended to adopt and follow the

consultative management style (System 3 on Likerts continuum of management styles), which meant that employees had a modest level of interaction and communication with

managers regarding decisions but that although employees were consulted about

problems and decisions, management still made the final decisions.11

This finding was

interesting in that earlier studies had indicated that the preferred management style in

6 Id. The social responsibility of Mexican employers to their employees is reinforced by

labor laws and regulations that make it extremely difficult, and expensive, for employers

to terminate employees other than for causes specifically recognized by statute such as

dishonesty or violence. 7 According to Teegen and Doh, the ideal workplace situation is Mexico follows the

family model, with everyone working together and doing his or her share in accordance with his or her assigned roles, and it is assumed that authority is concentrated at the upper

levels of the organization and is not to be delegated. H. Teegen, and J. Doh, "U.S.-

Mexican Alliance Negotiations: Impact of Culture on Authority, Trust, Performance",

Thunderbird International Business Review, 44(6) (2002), 749-775. 8 Jimenez et al. also observed that trustworthiness, loyalty and reliability are important

to Mexican employers. M. Jimenez, M. Fasci and J. Valdez, A comparison of management style for Mexican firms in Mexico and the United States, International Journal of Business, 14(13) (2009). 9 DeForest has also found that Mexican have a low tolerance for adversarial relationships

in the workplace. M. De Forest, "Thinking of a Plant in Mexico?", Academy of

Management Executive, 8 (1) (1994), 33-40. 10

R. Likert and J. Likert, New Ways of Managing Conflicts (New York: McGraw-Hill,

1976). 11

M. Jimenez, M. Fasci and J. Valdez, A comparison of management style for Mexican

firms in Mexico and the United States, International Journal of Business, 14(13) (2009).

Mexico was Likerts System 2 (Benevolent Authoritative)12 and Jimenez et al. speculated that changes in external conditions, notably increased global competitiveness and

exposure of Mexican managers to US management styles, might be leading to a

progressive change in Mexican management styles toward greater inclusion of employee

ideas while retaining the centralized decision making authority traditionally associated

with Mexican firms and the overriding societal culture.

12

See, e.g., R. Likert and J. Likert, New Ways of Managing Conflicts (New York:

McGraw-Hill, 1976); T. Morris and C.M. Pavett, "Management Style and Productivity in

Two Cultures", Journal of International Business Studies, 23 (1992), 169-179; and M. De

Forest, "Thinking of a Plant in Mexico?", Academy of Management Executive, 8 (1)

(1994), 33-40. A Benevolent Authoritative System is hierarchical; however,

management tends to be more paternalistic and provides employees with a modest

amount of freedom within limited boundaries for interaction, communication and

decision-making.