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MEXICO & HUMAN RESOURCE MANAGEMENT.
Term Paper ID:22569
Essay Subject:
Examines Mexican cultural, business/labor & gender issues & effects on Canadian & Amer. firms in context of implementation of NAFTA.... More...
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Paper Abstract:
Examines Mexican cultural, business/labor & gender issues & effects on Canadian & Amer. firms in context of implementation of NAFTA.
Paper Introduction:
NAFTA AND HUMAN RESOURCE MANAGEMENT
Introduction
This research examines critical issues for human resource management (HRM) in relation to the implementation of the North American Free Trade Agreement (NAFTA) between Canada, Mexico, and the United States. The focus of this examination is on the threats and opportunities, both internal and external, confronting Canadian and American companies in the wake of the implementation of NAFTA.
Background
International business failures are often the result of poor human resources management and a lack of understanding of the cultural differences between the home and foreign countries (O’Grady, 1995, p.
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Due to a lack of practical education andexperience, Mexicans do not develop the problem-solving skills to discoverthe root causes of many problems and the group skills necessary to handleconflict and improve from mistakes" (O'Grady, 1995, p. 45).External monitoring systems frequently are required in Mexican subsidiarieswhere such systems would rarely or never be used in Canada or the UnitedStates. 77-94). (1994, December). Further, managers in the Mexican subsidiaries of American andCanadian firms must give "specific orders to employees and ensure there isfollow-up" (p. 46). There remains in Mexico a "deeply rooted expectation that oncemarried, a woman should stay at home. Critical shortages characterize both the skilled and semi-skilled classifications. In the "absence of legislation prohibiting genderdiscrimination and due to prevailing social mores, Mexican employers tendto hire married men first, then single men, single women and finally (andrarely) married women" (p. NAFTA AND HUMAN RESOURCE MANAGEMENT Introduction This research examines critical issues for human resource management(HRM) in relation to the implementation of the North American Free TradeAgreement (NAFTA) between Canada, Mexico, and the United States. Union leaders and the economiccrisis: responses to restructuring. Garvey, J. (1995, April). 5 ). 43). Industrial Relations Mexican labor laws are strong, and are designed to protect the worker(O'Grady, p. Doing business inMexico: Understanding cultural differences. 5 ). To deal effectively with the manăna syndrome, American and Canadianfirms must implement stricter control systems in their Mexican subsidiariesthan they use in their home country operations (O'Grady, 1995, p. Ifthe former alternative is adopted, it is important for the American orCanadian company to employ indigenous managers for the Mexican operation(O'Grady, 1995, p. 45). Employers are required to enter into acollective agreement with a union if the represents a majority of the workforce of the firm, and a majority representation is assumed unlesschallenged by an employer (Pupo & White, 1994, pp. The Culture of Delay American and Canadian firms setting up shop in Mexico must be preparedto come to grips with the "manăna syndrome" (O'Grady, 1995, p. 44). (1995, 23 January). 46). They are crucial for succeeding in Mexico" (p.47). Once married,the woman is on a pedestal (the saint). H., & Thompson, C. 49). (1993, Spring). Many Mexican employers continue to favor males hiring (Stephens &Greer, 1995, p. The task willnot be an easy one with respect to either group. Ayoung woman would never think of complaining about sexual harassment. Gladwin, C. Doing business in Mexico: the humanresource challenges. The industrial sector of the Mexicaneconomy is highly unionized--approximating 9 percent. 439-453).Mexican labor unions "have broad rights, including the right to strikeduring negotiations and the right to stage strikes in sympathy with otherunions" (p. Mexican supervisors must be taught to delegate authority, whileMexican workers must be taught to accept and use authority. Business Quarterly, 6 (1), 42-52. Background International business failures are often the result of poor humanresources management and a lack of understanding of the culturaldifferences between the home and foreign countries (O'Grady, 1995, p. (1994, Fall). 42). The proportion of women in the Mexican work force islower than that in either Canada or the United States; however, thefemale/male ratio in management is comparable to that in Canada and theUnited States. There are no legal protections in Mexicoregarding discrimination on the basis of gender. Recruiting and Retention Unskilled labor predominates in the Mexican labor market (O'Grady,1995, p. Mandatory benefitsalone add on average 3 % to 4 % to the basic payroll cost. 48-49). Thus,management of details is a necessity in Mexican operations. Benefits Mexican compensation packages typically include "a number of bothoptional and mandatory fringe benefits and include several benefits notenjoyed by Canadians or Americans such as: a mandatory Christmas bonusequivalent to a month's salary, 1 % of the company's pretax profits,contributions to a mandatory government retirement savings plan, eightstatutory holidays, double-time after 48 hours, a 25% premium for Sundaywork, the right to a permanent job once an employee is past the 3 -dayprobationary period, a six-day vacation with two additional days for eachyear up to a maximum of 24 days, training for workers, 12 weeks of paidmaternity leave and the right to return to work, and a 5% of payrollcontribution to the Federal Workers' Housing Fund. Fishing the talent pool. 35). Productivity The productivity of Mexican workers frequently is enough lower thanthat of American and Canadian workers to completely negate wagedifferentials between the two countries (O'Grady, 1995, p. Summary and Conclusion This research examined critical issues for human resource management(HRM) in relation to the implementation of the North American Free TradeAgreement (NAFTA) between Canada, Mexico, and the United States. The man is out in the world havingfun (he is the sinner.) So, the only way the woman can get anything doneis to become very manipulative. When all of the additionalbenefits are included with the base rate of pay, the disparity betweenwages in Mexico" and both Canada and the United States shrinks from theenormous gap that exists when only base compensation levels are compared(O'Grady, 1995, p. (1995, Winter). Organizational Hierarchy Relations between superiors and subordinates in Mexico are dictated byhierarchy (Stephens & Greer, 1995, p. It is almost considered a management privilege. The focusof this examination was on the threats and opportunities, both internal andexternal, confronting Canadian and American companies in the wake of theimplementation of NAFTA. 35-36). 49) cited the following adage in explaining themotivation and reward situation in Mexico: "Mexicans work to live, whereasAmericans live to work. Motivation and Reward O'Grady (1995, p. Mexican laborunions are not required to be certified through a vote of a firm'semployees. Stay At Home Canadian and American Firms NAFTA will have an effect on American and Canadian firms that do notestablish subsidiaries in Mexico (Flynn, 1994, p. American and Canadian firms desiring to operate in Mexico can eitheradapt to the Mexican organizational culture or attempt to impose anAmerican-Canadian style of management (Stephens & Greer, 1995, p. Stephens, G. (1995, Autumn). Organizational Dynamics, 24(1),39-55. G. "Even if an effectiveperformance appraisal process was developed, Mexicans would most likelyhave an aversion to implementing it because of their views about harmonyand conflict; their desire is to preserve positive relations with others.This creates a strong unwillingness for Mexicans to confront another workerwith their mistakes for fear of offending them. An increasing number of Mexican women are pursuing professionalcareers, although to a lesser extent than is the case in either Canada orthe United States (Stephens & Greer, 1995, p. Further,training programs for Mexican workers must be adapted to the Mexicanculture. Legal guidelines exist with respect to collectivebargaining, dismissal, compensation, maximum working hours, vacations,housing benefits, profit-sharing, the right to strike and social securitybenefits (Cook, 1995, pp. Mexican state-labor relations and thepolitical implications of free trade. M. A brief final discussion considers the impactof NAFTA on American and Canadian companies that do not operate in Mexico. Trade law and quality of life-disputeresolution under the NAFTA side accords on labor and the environment.American Journal of International Law, 89(2), 439-453. Sheridan, W. 42).With NAFTA now in effect, Canadian managers need to know what the key humanresource challenges are in Mexico and how these are to be successfullymanaged (Sheridan, 1993, p. (1995, August). 13). MultichannelNews, 16(4), 1 A-13A.Title: O'Grady, S. Mexican "managers understandthe culture and have the personal contacts necessary for handling a varietyof business situations. American Journal of AgriculturalEconomics, 77(3), 712-718. Mexican employees expect their immediate supervisor to make alldecisions directly affecting them, and their loyalty to the supervisor isstronger than that to the firm. Similarly, the Mexican culture that placesfamily first facilitates the transfer of individual worker loyalty to theperson's supervisor in an organizational environment, which tends to defeatthe team approach that is central to a TQM (total quality management)program that an American or Canadian company may desire to implement in aMexican subsidiary. These benefits include such items as bonusesfor coming to work (Mexican firms both expect and are tolerant of highrates of absenteeism), transportation and meal allowances, daycare forchildren, and education allowances. Employment practices compared: NAFTA. Changing superior-subordinate relationships among the staff of aMexican subsidiary can be a daunting task for an American or Canadian firm(O'Grady, 1995, p. To ensure consistency, allemployees doing the same job should be subjected to the same evaluationprocess and outcomes of the evaluation should be based on performance asopposed to favoritism" (p. Results of in-depth interviews conductedwith top executives from Canada and Mexico indicate that although the maindifficulties involve employing and managing people from a differentculture, there are also key differences in whether and how specific humanresource management practices are performed in each country. The skill levelsamong average Mexican workers is quite low. Performance Appraisal Most Mexican organizations do not employ formal performance appraisalprocedures; thus, Mexican are not accustomed to the process when it isintroduced by American and Canadian firms (O'Grady, 1995, p. R. 51). American and Canadian firms frequently payadditional benefits to their Mexican employees that Mexican employers donot pay (Flynn, 1994, p. Centralized decision-making isthe norm, and Mexican employees are reluctant to take on any responsibilityat work. In Mexico, male supervisorscustomarily kiss "their female secretaries on the cheek at the start of theday." While such behavior likely would be construed as unwanted sexualharassment in both Canada and the United States, women in the Mexican workplace expect such behavior on the part of their supervisors, and regard theactions as signs of approval. The best solution to the skilled and semi-skilledlabor shortage in Mexico for Canadian and American firms are in-housetraining programs (Flynn, 1994, p. Women compriseapproximately 43 percent of the work force in Mexico, but account for lessthan 2 percent of managers in Mexican organizations (Gladwin & Thompson,1995, pp. 49).Authoritarian Mexican managers render subjective evaluations, and neitherexpect nor entertain challenges to such evaluations (Employment practices,1994, pp. A not uncommon practice is for Mexicanemployees to follow their supervisors from firm-to-firm. In Canada andthe United States, a supervisor can be a member of a team, acting as bothcoordinator and director, while accepting both input and questioning fromsubordinates (O'Grady, 1995, p. Flynn. K., & Greer, C. If exports to Mexico fromCanada and the United States increase as politicians and corporate leaderspredict, approximately twice those numbers of higher paying jobs will becreated in Canada and the United States. Several humanresource management challenges and opportunities facing Canadian andAmerican firms doing or planning to do business in Mexico are reviewed inthe following discussions. A challengingemployer may not require proof of majority representation by a union untilafter a strike has been called by the union (Garvey, 1995, pp. Employment Relations Today,2 (1), 13-19. Canadians are perceived to fall somewhere inbetween." These attitudes may be explained within the context of internaland external control--Mexicans tend to feel that they have almost nocontrol over the factors that affect their lives, while Americans tend tofeel that they have nearly total control over the factors that affect theirlives. The findings of this research indicate that American and Canadianfirms setting up shop in Mexico face far more formidable HRM challengesthan the supporters of NAFTA indicated would be the case. Their husbands want them to stayhome. References Cook, M. 46). In the "conventional Mexican organization, managementdirects rather than inspires. 38). 713-714). L. Criticism is often takenpersonally making what Canadians consider constructive criticism asensitive subject to address" (p. There is a very unusual male-female thing in Mexico. I. Training programs for Mexicanworkers, to be effective, must be structured at a much more basic levelthan are programs designed for American and Canadian workers. 1 A). Someeven think of it as positive interest" (Stephens & Greer, 1995, pp. Pupo, N., & White, J. Further, firmsin Canada and the United States that decide to stay out of Mexiconevertheless will be affected in the HRM realm by NAFTA. 44). 42). Industrial Relations (Canada) 49(4),821-846. (1994, August). 49). The use of expatriate personnel in Mexican subsidiariesby American and Canadian firms generally is unsatisfactory, particularly atthe managerial level (Mahoney, 1995, p. Fringe benefitsamount to about 5 % of the nominal hourly wage. 48). If opting for the latter alternative, American andCanadian firms must realize that the submissive character of the greatmajority of Mexicans as employees largely defeats most efforts involvingparticipative management. 834-837). Further, high quality managerialpersonnel, while available in Mexico, command compensation at levelscommensurate with salary levels for comparable positions in the UnitedStates and Canada. Canadians tend to fell that they can affect the direction of theirown lives, if not control that direction. 44). In Canada and the United States,thus, "being one of the team reflects respectability whereas, in Mexico,sharing power is often viewed as a sign of weakness" (p. In Mexico,deadlines tend to be flexible and delays are the norm, while in Canada andthe United States, "deadlines and commitments are considered to be firm"(p. Mexicans--supervisors and workers alike--must beeducated in the benefits to both individuals and the firm of effecting sucha change. Women in the Work Force Mexican culture differs substantially in the treatment of men andwomen in the work place from its counterparts in Canada and the UnitedStates (Stephens & Greer, 1995, p. Approximately15 , American and 2 , Canadian low-skill, low-wage jobs are expectedto move from Canada and the United States. Further, Mexicans typically endorse the concept thatseniority takes precedence over performance. The strong respect for authority that characterizes Mexican employeestends to make the task of employee management easier than it is in eitherCanada or the United States (Stephens & Greer, 1995, p. Latin American Perspectives, 22(1),77-94. 43). The focusof this examination is on the threats and opportunities, both internal andexternal, confronting Canadian and American companies in the wake of theimplementation of NAFTA. 44). 46). 45). 4 ). 5 ). Rather, certification is obtained simply through registrationwith the Mexican government. American and Canadian firms intenton using formal appraisal processes in Mexican subsidiaries must informMexican employees "well in advance" as to the evaluative criteria, which"must be objective and within the control of the employee in order tominimize the evaluation being taken personally. Sexual harassment isperfectly acceptable. Benefits &Compensation International, 24(5), 35-36. NAFTA raises HR challenges forcompanies doing business in North America. Impacts of Mexico'strade openness on Mexican rural women. HR in Mexico: What you should know.Personnel Journal, 73(8), 34-41. 5 ). The key todealing with this problem in the Mexican subsidiaries of American andCanadian firms is effective training for Mexican workers. Mahoney, W. (1995, Summer). 49). 5 ). Management must "allow time to repeat instructions andto continually check on what was previously agreed" (p. Theliteral translation of manăna is tomorrow; however, the typical meaning ofthe work in an organizational context when used by Mexican employees is"not today and not necessarily tomorrow either" (p. R.
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