Cross-cultural challenges in developing business: A case study of Capella Hotels and Resorts in Mexico

This article discusses the cross-cultural challenges faced by Capella Hotels and Resorts in developing a new resort in Mexico. It explores the cultural complexities and barriers in developing business in a foreign country, including differences in power distance, communication styles, religion, masculinity, uncertainty avoidance, and wage inequality. The article concludes by highlighting the opportunity to create a fusion of cultures and deliver a quality experience to customers.

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Cross-cultural challenges
Barriers in Developing Business
Students Name
12/17/2018

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Capella hotels and resorts are considered as one of the finest constellations of hotels and
resort with the vision of delivering the best customer experience. All the hotels of Capella
uphold the crafted luxury designs combined with the highest level of personalized experience
and deliver the service that is unique and memorable. The brand fosters to include culture and
creating a harmonized environment in which the employees are equally respected. Each
location of Capella aims to blend nature, tradition and deliver a memorable experience to
customers. The company is planning to set up a new resort in Mexico because Mexico has
become one of the most attractive tourist spots. It is analyzed that there were various cultural
complexities, which are faced by the local employees of Singapore location (Capella Hotel
Group, 2018).
In Mexico, there is high dependence of the employees on the boss because their centralization
is very popular and all the decisions are in hands of the boss, therefore, such high power
distance is a challenge for employees in Singapore because there is comparatively less power
distance and provides the opportunity to the employees to take decisions. In Singapore, the
informal way of communication is implemented while in Mexico informal communications
can be perceived as rude which creates a communication problem for employees of
Singapore (Hofstede Insights, 2018).
It is analyzed that in Mexico employees follow mainly the Catholic religion and does not
focus on the other religions while in Singapore all, the religions are equally respected and
festivals of all the religions are celebrated such biases can create dissatisfaction among the
diverse workforce. In Mexico, there is a higher degree of masculinity and managers are
expected to be more assertive and decisive in their decision. The conflicts are solved by
fighting out them and there is competition among the organization. While in Singapore, there
is a culture that is more feminine. The softer aspects such as empathy, the consensus are
encouraged and the problems by solved privately and politely (Communicaid, 2018).

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In Mexico, there is a high score of uncertainty avoidance and innovation is resisted, as they
believe that there, should be no uncertainty in the future and follows strict rules. There are
rigid codes of behavior and does not include flexibility in decisions such beliefs lead to
challenges for the employees of Singapore as in Singapore there is very less figure of
uncertainty avoidance because of high power distance employees follow more rules (Coria-
Sanchez and Hyatt, 2016).
In Mexico, the organizations are more concerned for quick decisions and do not save for the
future while in Singapore, the organizations concentrate on perseverance, long-term
investments and concentrate more on future by building string relationship while in Mexico
they focus on quick results. Such changes in perceptions create a problem for the employees
of Singapore. To establish healthy relations with the people in Mexico they prefer to speak
the Spanish language while in Singapore people know languages such as English, Tamil, and
Malay. Such language issues can create problems in understanding the perceptions of each
other and leads to communication barriers. There is a high degree of racism in Mexican
culture the people are divided into groups according to their color. Such racism is not
practiced in Singapore and can disturb the working environment of the employees (Anheier
and Isar, 2012).
Gender and wage inequality is considered the main issue for the employees of Singapore. In
Mexico, the organizations concentrate on employing males because they have the belief that
hiring male employees will provide more power and competitiveness in the organizations and
the problems can be solved in a better way. Such a belief leads to the creation of
dissatisfaction among the female employees and can act as a bottleneck in developing the
resort in Mexico. The main issue in doing business in Mexico is higher wage inequality.
There is higher inequality in the distribution of wages among the employees. There is high
poverty in Mexico and rich people are becoming richer such difference in the distribution of

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income destroys the zeal of the workforce to dedicatedly contribute towards the company
organization. The employees in Singapore are able to maintain their standard of living, enjoy
leisure time by getting the equal wage distribution, and effectively contribute towards the
success of the company (Ting-Toomey and Dorjee, 2018).
In Mexican culture, the management has the hierarchical structure and the process of decision
is slow. They prefer to build trust and relation and do not show punctuality in meeting on
time. They have the culture of shake hands, hugs, which may not be acceptable by the
employees of Singapore (Ting-Toomey and Dorjee, 2018).
The government of Mexico has implemented certain steps to improve the infrastructure and
led to the creation of employment opportunities for the people but are slow in taking
decisions. They prioritize to build long-term relations with the people but negotiate in a
different manner. They focus on following proper gesture to communicate; regular eye
contact is considered rude in Mexican culture and they prefer to use their last name while
communicating to them (Wild, Ball and Alverne, 2016).
The establishment of Capella hotels in Mexico will provide the opportunity to mix the culture
of Singapore and Mexico and create a fusion to attract the customers and deliver a quality
experience to them. The traditional culture of Capella hotels and resorts delivers develops the
culture in the organization to respect all the religions and avoid racism. It focuses on
developing collectivism and maintains a harmonized environment in the organization (Erbe
and Normore, 2015).
From the above discussion, it is concluded that although Mexico is considered as the most
attractive tourist spot it comes with lots of cultural challenges and complexities, which
disturbs the working environment of the organization and thus creates dissatisfaction among
the employees. The cultural differences such as language, religion, racism create a challenge

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for the employees. A higher degree of wage inequality and considering more masculine in
their organizations act as barriers in achieving efficiency. Development of new resort in
Mexico will provide the opportunity to provide the fusion of culture of both the countries and
delivering a quality experience to the customers.

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References
Anheier, H. and Isar, R.Y. (2012) Cities, cultural policy and governance. London: Sage
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Capella Hotel Group. (2018) About [Online]. Available from:
https://www.capellahotels.com/en/corporate/about [Accessed 17/12/18]
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