Introduction

Throughout Mexico, businesspeople value personal relationships in the negotiating process. But the atmosphere of negotiations may depend on the region. In the south, you are likely to find a more informal atmosphere similar to that found in other parts of Latin America. In Mexico City and other northern areas, businesspeople tend to be more reserved, akin to their counterparts in the United States and Europe.

Goal of Negotiations

In Mexico, business is first negotiated between people and not companies. As a result, the strength of an agreement does not lie primarily with the written terms of the contract. Sometimes this causes problems, since oral commitments, even those sealed with a handshake, can lead to later confusion over the terms. You need to recognize this custom and as soon as is practical reduce your understandings to writing. 

Because the negotiations are conducted on a personal level, it is very important not to publicly insult your counterparts. The smallest slight, even if it is innocent or inadvertent, will permanently affect the outcome of the talks. Even when the discussions become especially competitive, you must resist any temptation to denigrate your opposition, because saving face is important to the Mexicans.

Attitude

Because Mexicans are known as hard bargainers, it is easy to lose sight of the fact that for them the end result is a win-win situation and that the ultimate goal is mutual benefit for both parties. Whenever in the heat of battle you feel that the value of this goal is lost, you should remind your hosts that the results of your proposal will be shared by both parties.

Although Mexican negotiators are not known for openly aggressive techniques, they are not averse to using deceptive tactics, and will assume the same of you. Even if this is not your style, the Mexicans will assume that you are not always being honest with them. Whenever possible, you should independently verify information from a neutral source. If you discover a falsehood, you should use this information to your advantage. A preferred response is to be understanding and point out that such deception is harmful to the relationship and will not be tolerated in the future.

Personal Style

Most negotiations will start rather formally as the parties get comfortable with each other. Taking time for small talk should move things along and lay the foundation for productive negotiations. Mexicans from the south tend to prefer an informal atmosphere, which may not be shared by businesspeople from the northern regions.

The practice of gift giving is not deeply ingrained, and is merely a pleasant opportunity to offer something of small value to your hosts at the beginning of the negotiations. Bribery and corruption are ever-present issues in Mexico and you may be forced to respond to questionable requests. You should determine in advance how you will respond in these situations, so that your actions will be clear-cut and not open to misinterpretation.

Communication Style

Communication in Mexico proceeds in an indirect manner. If you have an agenda, you should submit it in advance, but don’t be surprised if discussions stray from it, especially in the beginning. If you have important points to make, be persistent and keep returning to them throughout the negotiations. Eye contact is the best way to convey your seriousness and allow you to maintain focus.

Mexicans use the withholding of information as a negotiation strategy. You can expect not to receive important information until near the end of the process, in an effort to gain an economic advantage. It is expected that you will be doing the same thing, so don’t be forthcoming too early in the negotiating.

You may experience different negotiating styles from people in the southern areas around Oaxaca from those in the big cities such as Mexico City and Guadalajara. In the former, communication is much more relaxed and informal, similar to other Latin American countries, while in the latter it is similar to the more reserved United States or European styles.

Time Sensitivity

Mexicans have a reputation for not being very time sensitive, and the word mañana (tomorrow) is often used to characterize this trait. Give yourself plenty of time to accomplish your goals, and above all else be patient.  Meetings, unless they include a working breakfast, should not be scheduled in the early morning, and will almost always start late. The Mexicans are known for their hospitality, and drinking strong coffee in a meeting is common, as is smoking cigarettes.

Negotiations in Mexico are slow to gear up, and often get started in a positive direction only after everyone has been invited out to a working lunch. In Mexico, food is an essential part of the socialization process, so be prepared to eat and drink alcohol with your hosts.

Whenever your counterparts appear to be delaying the negotiation, try to evaluate whether this is a negotiation strategy or simply part of the culture. If it is a strategy, you can either play along with an equivalent strategy of your own, or more preferably you can just be patient and wait out the delay. When bureaucracy causes a delay, there isn’t much you will be able to do to move things along, although you should offer to work on the problem cooperatively with your counterparts.

Emotionalism

The Mexican personality can be very emotional and expressive. This will be especially true if a relationship has developed between you and your hosts. This development can be a mixed blessing. On the one hand, it can get in the way of a quick, crisp agreement. On the other, you should try to harness the emotionalism to benefit your position, and especially use it to strengthen the commitment to implementing the terms of the agreement. Ideally, at the end of the negotiations, you will not only have a mutually beneficial business relationship, but you will also have an emotional commitment to the outcome of your negotiations.

Risk Taking

In times of economic distress, it is unlikely that businesspeople would be willing to take unnecessary risks. Generally speaking, Mexican businesspeople are fairly levelheaded and cautious. If you have a proposal that is new or different, you will need to describe it in conservative terms, stressing the potential long-term benefits and perhaps offering warranties or guarantees to make taking the risk seem worthwhile.

Team Organization

Decision-making in Mexico will start with the agreement of mid-level personnel and work its way slowly up the ladder. You will probably encounter the boss at the first meeting and then the rest of the time will interact with experts and middle management. At the end of the process, you will again come in contact with the senior decision-maker. Whenever possible, try to determine who makes the final decision and try to get that person involved as soon as you can.

In smaller business units, especially in the south and with family-run companies, there will not be as many levels between you and the person who makes the final decision. In that case, there will be less of a need for a collective decision, and you should be able to conclude an agreement more quickly than in countries with large and complex hierarchies. As with most Latin American countries, there is the ever-present concern about corruption and bribery. It is important for you to determine in advance how you will react if confronted with requests of this nature.

Agreement-Building Process

Mexicans can be expect to see the bigger picture in business deals, and consequently will start with a long-range goal and work down to the details of the agreement. Minor disputes along the way should not call into question the basic relationship between the negotiators.

As with deal-making in any country, you need to prepare your strategy in advance and know the terms and rationale of your bottom-line offer before you start negotiating. Mexicans are tough bargainers, and you will undoubtedly start the process far apart and slowly work your way toward a compromise position. You need to save some of your ammunition for the end of the negotiations, when Mexicans can be expected to be most uncompromising.

Mexico does have a significant amount of government regulation, but you will not experience governmental intervention in the negotiating process, as is common in less-developed Latin American countries.

Mexican meetings are generally not well focused, and there is a lot of multitasking, with numerous interruptions. You may find this distracting or even annoying, but try not to get upset; stay focused on your goals.

Agreement Form

Mexicans like to make a lot of verbal commitments that you may think are agreements, but are actually part of their negotiating strategy. It is essential to put these commitments into writing, because of the unreliability of verbal statements. Negotiating in Mexico can be a very informal and unfocused process, which makes it harder to reduce understandings to fixed document, but the effort must be made.

Final contracts tend to be long and cover the details of the agreement. You should ask to have the final contract written in your native language, but if the agreement must be written in Spanish, you will need to obtain an authorized translation, which should be initialed by both parties. Mexicans have a neutral attitude regarding the need for attorneys, but generally will not have their attorney present at the negotiations. However, it is expected that, after general agreement, legal counsel will be brought into the process. Contract enforcement is expensive in Mexico, so if possible, try to have any necessary litigation take place in your home country.

Do not think that once the agreements are signed you are at the end of the process. Amendments and modifications are common, and you do not want to be forced to create new relationships to address them. Maintain contact with the senior decision-makers so that you can pick up the phone and sort problems out efficiently.

The assessments detailed in this article are intended for informational purposes only. They reflect typical attitudes within a given country or culture, and are not intended to describe any specific individual or business. World Trade Press is not responsible for any action taken on the basis of the information contained herein.

World Trade Press would like to acknowledge the research of Jeswald W. Salacuse (“Ten Ways That Culture Affects Negotiating Style: Some Survey Results,” Negotiation Journal, July 1998, Plenum Publishing Corporation) as the basis, with modifications, for the assessment categories described in this article.