Essay About Large Business Organizations And Mexican Economy

Challenges That May Be Faced in the New Environment
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Challenges That May be Faced in the New Environment
The country chosen for the bank branch to open up in is Mexico. A significant emergence of
large business organizations have been established in the Mexican economy and many of them
are global or multinational businesses. These organizations conduct business with other foreign
organizations, especially when it comes to importing of raw materials as well as exporting of
manufactured goods. Mexico has a strategic location and the market has seen growth and
sustainability by the influence of the United States of America. It is also an influential trading
partner with the countries in Latin America. (Blake, 2009)
In spite of its strategic location and economic favors that Mexico may have, Mexico still has
its many investment challenges involved with it. Some of these challenges are the fact that there
are variations with regard to such key factors involving its culture and literacy levels. Regarding
these challenges stakeholders need to consider the social, ethnic, cultural, and educational
challenges which come along while pursuing investments into the Mexican market. (Kingstone, 2011)
Cultural challenges
The Mexican culture is very forward in holding family values and traditional values in high
regard. The women for example from typical Mexican families are more concerned with the
household duties primarily. The majority of them would not even consider working outside the
home commercially, especially if the husband or male members of the house were able to
provide adequately for the family. Another noticeable traditional family value is that children
who are from a family with higher income remains in their families or live at home longer than
say young adults would in the United States of America. This means when the male spouse is
financially stable, the women and children and young adults choose to stay out of the workforce
for gainful employment unlike American households. These traditions can hinder organizations
when it comes to a vibrant work force, and this type of situation can also inhibit innovation. (J.C. Hamilton, 2012)
Ethnic and Social Differences
While the majority of the American society is mostly cosmopolitan, the Mexican society is
mostly made up of mestizos. Over half the Mexican population, 60 percent of Mexicans are
mestizos, this highlights that when dealing with Mexican society it is a necessity to understand
their ethics and social norms and this is not always easy to do for a foreign investor. An
organization could very well lose clients by disregarding the etiquette, and then the bank has to
spend adequate resources and time into solving such challenges. (Kingstone, 2011)
Educational Characteristics
Unlike the United States of America in Mexico there are states where the literacy rates are
extremely low. This is especially the case in were Native Americans constitute the majority of
the population. Regions that make up these poor literacy rates are in Oaxaca, Guerrero, and
Chiapas. In highly urbanized areas of Mexico the literacy level is much better and reaches 97
percent in some areas. This factor indicates that in terms of literacy, Mexico is not an equal
society. Since this unequal level of education exist in Mexico it causes the labor market to not be
competitive and again this factor can hinder and deter the level of innovation in organizations. (Blake, 2009)
Legal and Political Systems
Every country has its own legal and political systems. Mexico is very similar to the united
States of America with its legal and political systems. Both countries political systems are made
up of the federal presidential systems. The president in both countries is the head of the state and
the government, and the countries both have multiparty electoral systems. Both nations consist of
three arms of government which make up the executive, judiciary, and legislature. These
similarities show that with regard to the legal and political systems being the same that the bank
will not be faced with investing challenges in this aspect. (Nicholls, 2013)
Government Intervening in Private Sector
According to the Mexican constitution it is a capitalistic economy where the government
does not interfere with the private sector, so it’s supposed to be void of political interference. But
corruption and political influences do run rampant in Mexican business operations. An example
is the organization of Wal-Mart has been accused in the past of offering bribes to Mexican
officials in the government to help speed up or obtain the operation license needed as well as
other favors pertaining to help start up business.