Cross-Cultural Management: USA & Mexico Business Challenges Report

This report delves into the realm of cross-cultural management, specifically examining the business relationship between the USA and Mexico. It begins with an introduction to cross-cultural management, emphasizing the impact of societal culture on business practices and the importance of understanding cultural differences in international business. The report then presents an assessment focusing on Hofstede's cultural dimensions, analyzing various issues arising from cultural differences, including trade agreements and the Mexican banking system. It provides a detailed overview of Hofstede's six dimensions (power distance, individualism vs. collectivism, uncertainty avoidance, masculinity vs. femininity, long-term orientation, and indulgence vs. restraint) and their implications. The report concludes with an assessment of organizational culture, the impact of import/export, and challenges faced by organizations operating internationally. It highlights the significance of understanding cultural differences to ensure equal growth opportunities and effective international trade. The report also touches upon the limitations of Hofstede's theory and provides a view of each country in terms of Hofstede's cultural dimensions.

Cross-Cultural
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
ASSESSMENT 1 ..........................................................................................................................1
CONCLUSION................................................................................................................................4
ASSESSMENT 2 ............................................................................................................................6
INTRODUCTION ..........................................................................................................................6
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Cross-cultural management can be referred as a study of administration in a different
culture environment. This concept helps in determining influence of societal culture on business
managers and managerial activities (Ang and Van Dyne, 2015). Also, it helps in determining
cultural orientations of organization and its staff members. In simple words, cross cultural
management means managing teams in that way which considers cultural and practices
differences of customers in international business context. There is a potential relationship
among two big countries such as USA and Mexico, these two countries are concern on gaining
high growth and success through establishing collaboration with each other. These two countries
share a 2000 mile border and the bilateral relationship among two counties has a direct influence
on the lives and livelihood of millions of people and society. Different type of issues are faced by
the companies who are significantly conduct various business operations in the country of USA
and Mexican. The first issue is related with trade agree if any firm is indulged in trading
operations than they have to follow legal procedures and sign the legal trade agreement. The
second issue is related with the banking system in Mexico as they achieve growth after
stagnation but their interest rate is comparatively high while they are providing loans to
customers. This report contents the study about issues and challenges that are faced by business
organisation in which business expansion and export and import cause different issues that has a
huge impact on organisational as well as economic condition of country (Aycan, 2011). Hofstede
model is widely applied by organisations as their analytical tool and also helps in managing the
problems in effective and efficient manner.
ASSESSMENT 1
Hofsteded's culture Dimensions theory and various issues that rise through culture.
In this modern era the major purpose of each small as well as large business organisation
is to expand their operations at wide area through offering variety of goods and services to their
significant buyers who are valuable in attaining high growth and success at market place. Each
country is concern on establishing good relationship with other neighbour country as to fulfilling
the needs and wants of people (Bar-Tal and et. al., 2013). The government and its authority plays
a vast role in expanding business and its operations at global market. USA and Mexico has good
relationship with each other and conduct various business operations as to satisfying the different
needs and wants of buyers. The international trade among these two countries helps in
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developing the economic condition which create value in high growth and success of country.
Various kind of issues are faced by the companies who conduct different kind of business
operations all over the world. The government rules and regulation of two countries are different
from each other and it is required for each business organisation to follow these rules and
regulations as to reaching at higher position in market. The change in government policy has a
direct influence on import and export of countries as it is effective in fulfilling the needs and
wants of people who belongs to different geographical areas. The banking system in Mexico has
represents a sign of growth after the years of stagnation but the interest rate is comparatively
high. The changing policies and rules has a huge impact on living standard and livelihood of
people and society. Hofstede's cultural dimensions theory is a base for cross-cultural
communication which have been developed by Geert Hofstede. It explains the effects of a
culture of a society on the values of the person living in a society. It also describes about how
these values are related to their behaviour. Geert has done factor analysis for relating the values
with behaviour. Hofstede proposed a theory related to cross cultural communication which
describe the culture of the people of the society with the help of their values, which is related to
their behaviour of the members living in the society (Caligiuri and Tarique, 2012). It analyses
from structure of factor analysis. Hofstede developed his theory with the help of these
behavioural factor with respect to culture of the society. Hofsted examine the behavioural factor
of employee working in the IBM between 1963 to 1973. Firstly Hofstede proposed four
dimension along with culture values which analyse, individualism- collectivism , uncertainty
avoidance, power distance and masculinity – femininity. Hofsted again explore its research in
Hong Kong independently and gives fifth six research dimension I.e long term orientation and
indulgence versus self restrain. The Hofsted dimension of culture is based on six major models,
which are evaluated as below:
 Power distance index (PDI)
 individualism vs collectivism
 uncertainty avoidance index
 masculinity vs femininity
 long term orientation vs short term orientation indulgence vs restrain
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Power distance index: It describe about those people who having low extent of power in the
organisation and institution. This dimension determine that inequality and power perceived from
the follower from lower level to higher level and it led to questioning from higher level; and
want to distribute the power among people equally.
Individualism and collectivism: This index determines that the group of integrated people who
emphasis on “i” and “we” which led to loose relationship of the particular individuals from their
family (Chen and et. al., 2010). This culture defines the degree to which people in a society are
mixed together in a groups. Societies which has adopted individualism culture have loose the ties
with other people, it means they are only in relationship with those people who are in their
immediate family. Here individualism defines individual as a separate entity. A individual person
makes the choices of his own, works only on his thoughts and takes responsibilities of his
choices. Objectivism supports individualism because object is single like a individual.
Individualism lives like isolated person, he or she works for their own growth. He or she can
give efforts for his showing his own performance, people wants individual attention by the
others. they thinks, lives and acts towards fulfilment of individual goals. Each individual has the
capability to analyse the best things from their self. Individualism defines persons motivation and
values is totally different from others. They are able to make decisions regarding to whom they
has to cooperate with.
Uncertainty avoidance index: It determine the level of tolerance in the society for ambiguity in
which people embrace if something unexpected happen in the society and culture. A lower
degree in this index shows more acceptance of differing thoughts among the people. It tends to
impose some regulation in the society which help in prevent the ambiguity among the people.
Masculinity and femininity: Masculinity define as to getting reward, achievement, heroism,
assertiveness for success. This dimension counterparts the cooperation , modesty caring for the
weak quality of life. Rather in femininity determine the gap between male and female and it also
help in assent of these gaps which led to discrimination regarding the work. As the term defines
this culture separates males from females. According to the theory, masculinity is defined as a
preference for achievement in a society (Chevrier, 2013). It gives raise to heroism, assertiveness
and rewards for success. A masculine society has a qualities that are categorized as male like
strength, dominance and egotism. Business that are built on this type of culture feel that success
and winning in the market shows profitability of enterprise. This type of culture relates success
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with money value. A manager while preparing a speech to these cultural people use to focus on
ideas of achievements, success and financial gains.
Long term orientation vs. short term orientation: This dimension relate the challenges of past
and future. Lower degree of index that traditional steadfastness is honoured, high value of index
shows adaptation and circumstantial, problem solving necessity. whereas short term orientation
shows the no economic development.
Indulgence and restrain: It determine the happiness whether the people living in the society
living freely which allows to fulfil their desire and having fun. It allows to control the
gratification of need and regulate it by means of strict social reform. Indulgence society believe
in controlling of their own life and their emotion which the believe of the society related to the
factor which affects their life and their emotion (Eyssel and Hegel, 2012).
In this modern era competition is so high and each business firm is concern on attaining
high competitive edge through performing effective at market place. International trade is
beneficial for countries growth and success and in this government plays a vast role in setting up
various rules and regulations as to creating international trade more easy and secure. It is
required for countries government to design effective policies which are easy to be implemented
into proper action. As the both countries USA and Mexico deals with each other just to fulfilling
the needs and wants of people, so government needs to prepare some trade policies that are easy
and effective for making international trade more easy. Hence, these are major cultures which
can creates various business problems. So, it is highly important for all business enterprise to
adopt that culture in which both male and female achieves equal growth opportunities otherwise
discrimination can put company into worst situations. Legal authorities have made various laws
which force company to create good working environment where female gets career
opportunities just like males.
CONCLUSION
As per the above report it has been concluded that the major focused area of each
business organisation is to expand their business functions at global market as to attaining high
growth and success at market area. Various type of challenges are faced by organisations that are
having their business operations all over the world. It is required for firm to adopt appropriate
culture and policies as to conduct their business operations in domestic as well as international
level. The major benefit of this theory is that it helps in implementing various business
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operations in well planned and systematic manner as to gaining high growth and success at
market place.
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ASSESSMENT 2
INTRODUCTION
Organisational culture plays a vast role in establishing global presence of company at
market place. An effective organisational culture helps 8in implementing all business operations
in effective and systematic manner. The companies who conduct their business operations all
over the world faces various challenges and issues which are needs to be resolved by them in
effective and efficient manner as to achieving high profitability and growth. Import, export and
changes in government policies has a vast impact on economic condition of country as it has a
direct influences on international trade (Hamilton, 2015). This is valuable for country to attain
high growth through implementing various organisations into international trade as it helps in
increasing the number of foreign currency among country and this create huge growth of
country. Mexico is the Unified States' third-biggest global exchanging accomplice for
merchandise, with $525.1 billion altogether (two-way) products exchange amid 2016. Products
sends out were $231.0 billion, and imports were $294.2 billion. Two-path exchange
administrations with Mexico came to $54.5 billion of every 2016. This section of report is based
on the criticism and limitations of Hofstede theory and the view of each country in terms of
hofstede culture dimension model. This theory is effective in creating appropriate decision for
carry out the business and its activities in well planned and systematic manner. The effectiveness
of hofstede model and its implementation among organisations that are belongs from different
countries.
The views of country in turn that represents through their scores on each of the Hofstede
culture dimensions
The international trade among USA and Mexico is valuable in developing economic
condition of both the countries. The Assembled States and Mexico share a 2,000-mile fringe and
several billions of dollars every year in two-way exchange (Challenges in Mexico Market).
Around a million American subjects live in Mexico, and a huge number of Mexicans and
Americans go between the nations each year (Jackson, 2012). This strict and non-literal
closeness is supported by the built up exchange connections and motivating forces the Mexican
government has instituted to improve the nation's worldwide exchange position all of which can
make Mexico an alluring focus for U.S. organizations hoping to extend their worldwide business
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nearness. These two countries has an effective and positive relationship with each other and
widely concern on exploring their business operations all over the world. Hofstede culture
dimension theory plays a vast role in managing all business activities among the culture of firm.
The best classes of merchandise sent out to Mexico in 2016 were hardware ($42 billion),
electrical apparatus ($41 billion), vehicles ($21 billion), mineral fills ($20 billion), and plastics
($16 billion). The best import classes from Mexico in 2016 were vehicles ($75 billion), electrical
hardware ($62 billion), apparatus ($51 billion), optical and therapeutic instruments ($13 billion),
and furniture and bedding ($11 billion).
Mexico is the world's fifteenth biggest market, by GDP, which developed at a rate of 2.6
percent in 2016. For long haul supported development, the Mexican government has taken
measures to pull in outside speculation, including auxiliary changes influencing the vitality,
instruction, work, budgetary, and political sectors (Kawar, 2012).
Mexico is likewise part of various activities and assertions intended to upgrade exchange,
including the North American Pioneers' Summits (with the U.S. also, Canada). The U.S.,
Mexico, and Canada are likewise accomplices in the North American Unhindered commerce
Assertion (NAFTA). Truth be told, Mexico has more organized commerce understandings than
some other nation on the planet, incorporating settlements with Japan, the EU, and numerous
Latin American partners a refinement of note for U.S. organizations with worldwide sourcing
prerequisites. Mexico's USD 1.1 trillion yearly Gross domestic product create it the second
largest economy in Latin America and the fifteenth biggest economy on the planet (Mackie and
Hamilton, 2014). Mexico has a huge, enhanced economy, and its expanding success is connected
to its extending exchange and venture relations with the Assembled States in the course of recent
decades.
The Geert Hofstede examination for the Unified States is fundamentally the same as
other World Nations that have their legacy established in Europe with solid connections to the
English Isles. Independence positions most elevated and is a huge factor in the life of U.S.
Americans. There are just seven nations in the Geert Hofstede inquire about that have
Independence (IDV) as their most astounding Measurement: USA (91), Australia (90), Joined
Kingdom (89), Netherlands and Canada (80), and Italy (76). The high Independence (IDV)
positioning for the Unified States shows a general public with a more individualistic demeanour
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and moderately free securities with others. The masses is more independent and pays special
mind to themselves and their nearby relatives.
The following most astounding Hofstede Measurement is Manliness (MAS) with a positioning of
62, contrasted and a world normal of 50. This shows the nation encounters a higher level of
sexual orientation separation of parts. The male commands a critical part of the general public
and power structure. This circumstance produces a female populace that turns out to be more
emphatic and aggressive, with ladies moving toward the male good example and far from their
female part (Ochieng and Price, 2010). The Assembled States was incorporated into the
gathering of nations that had the Long haul Introduction measurement included. The LTO is the
most minimal Measurement for the US at 29, contrasted with the world normal of 45. This low
LTO positioning is demonstrative of the social orders' faith in meeting its commitments and has
a tendency to mirror a gratefulness for social customs.
The following least positioning Measurement for the Assembled States is Power
Separation (PDI) at 40, contrasted with the world Normal of 55. This is demonstrative of a more
noteworthy uniformity between societal levels, including government, associations, and even
inside families. This introduction strengthens a helpful connection crosswise over power levels
and makes a more steady social condition.
The last Geert Hofstede Measurement for the US is Vulnerability Shirking (UAI), with a
positioning of 46, contrasted with the world normal of 64. A low positioning in the Vulnerability
Evasion Measurement is characteristic of a general public that has less standards and does not
endeavour to control all results and results.
Problems might arise from the differences between the countries on each dimension and
suggested possible solution:
The power distance dimension of USA and MEXICO are as follows :
The power distance dimension of Mexico expresses the attitude of the culture towards
people living in the society , the less powerful member members in the organisation of Mexico
have unequal distribution of power (Usunier, 2011). Whereas in USA the distribution of power
among the employee working in the organisation is according to the post given to the employee
they are responsible to their departmental head of the organisation.
Masculinity and femininity between USA and Mexico
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In Mexico there is feminine society which reveals that people lives in order to work
where managers of the organisation are to be decisive and assertive it is related to the
competitive conflicts their performances and conflicts resolve not by peaceful method rather they
start fighting with superior and walk out from the organisation start protested violently against
the organisation. Whereas in USA there is masculine society the people eager to do work in
peaceful environment they work according to the organisation rules and follow up the
organisation propaganda (Wagner and et. al., 2012). If some conflicts happen they used to
arrange the meeting tom resolve the conflicts people use to listen ethics and various type of issue
of feminines also and coordinate with them in the organisation.
Individualism: In Maverick social orders individuals should take care of themselves and their
immediate family as it were. In Collectivist social orders individuals have a place with 'in
gatherings' that deal with them in return for dedication and loyalty. Mexico, with a score of 30 is
viewed as a collectivism culture. This is show in a nearby long haul responsibility regarding the
part 'gathering', be that a family, more distant family, or expanded connections (Thomas and
Peterson, 2017). Unwariness in a collectivist culture is central, and supersedes most other
societal standards and controls. The general public encourages solid connections where
everybody assumes liability for kindred individuals from their gathering. USA follows
individualism culture which is different from Mexico, so this create issue in international trade
among these two countries.
For example:
In the organisation of Mexico where there is conflict between the men and women they
started quarrelling for some issue of the organisation they started to fight with each other at last
organisation decided to call out police force to stop the fight there are lots of people died at the
time of conflict. Whereas in USA if such incident could not be happen because the employee of
the organisation are responsible to their department, organisation keen to resolve the conflict
with peace , organisation follow the suggestion and problems of male and female employee
equally there is no gender discrimination within organisation.
The solution to avoiding the gender conflict in the organisation of the Mexico and USA ,
organisation should not discriminate according to the gender, it should give equal power and
opportunity to the employee working in the organisation. Organisation should took relevant steps
to trained their manager so they are capable to solve the issue by fair order not by discriminating
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among the male and female employee working in the organisation finally it is assume that there
should not gender discrimination in the organisation.
CONCLUSION
From the above report this has been summarised that when people from distinct
backgrounds work together as a team they come across various problems. This is due to the
reason that each individual beliefs are different and when they have to work on same projects
they find it difficult to reach on common solutions. USA and Mexico follows various rules and
regulations as to attaining high growth and success in international market as it is valuable in
enhancing economic position of country. Hofstede culture dimension model plays different role
in both the countries as to making effective and possible decision for organisational benefit and
success.
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