Mexico is the country located in Central America stretching from the Pacific Ocean coast in the West to the Gulf of Mexico’s coast in the East. On the South, Mexico borders with Belize and Guatemala and, on the North, Mexico borders with the USA (See Map of Mexico). Mexico is one of the largest countries of Central America. The area of Mexico is above 761,000 sq. km. The population of Mexico exceeds 111 million people. At the same time, the density of the population is not very large. The largest city of Mexico is its capital ”“ the Mexico City (Crandall, 2004).
The official language of Mexico is Spanish, although there exist 62 languages of native tribes but they are used at the local level, whereas Spanish is the language of the national communication in Mexico (Crandall, 2004).
Mexico used to be the cradle of the advanced civilizations of the native population of America. To put it more precisely, Mexico was the territory where the Aztec’s and Maya’s civilizations emerged. However, the rise of the native civilizations ended with the European colonization of the continent. Conquistadors from Spain occupied the territory of modern Mexico defeating local states and tribes, pushing the native population to mountains, and eliminating a considerable part of the native population through slaughter, epidemics, and forcing them out of their native land. In such a way, Mexico became the colony of Spain. However, in 1810, Mexico declared its independence of Spain although it was recognized officially until 1821. In fact, Mexico used the Napoleonic wars to get the independence because Spain could not afford maintaining its power over colonies when it was in war with France.
On getting independence, Mexico has started to develop as an independent state which, to a significant extent, used the US as the model for the development of its administrative structure and political system. Today, Mexico is a federal state that stands on the democratic ground but the development of democracy and open market economy confronts the problem of corruption and high crime rates which are provoked by poverty of a considerable part of the local population (Bozyk, P 2006). Mexico is a member of the NAFTA and develops free trade with the US as its major partner in international economic relations (Bozyk, P 2006).
The development of business in Mexico should take into consideration local specificities, including the cultural difference of the native population of Mexico. To put it more precisely, the native population of Mexico consists of numerous tribes which have preserved their cultural uniqueness and difference. They are different from the mainstream Mexican culture and, when a company develops its business in remote areas of Mexico, for instance a company operating in a tourist industry. The cultural difference is very important because native tribes need a different approach to management and organization of work.
Furthermore, the high level of corruption in Mexico raises the problem of the tolerant attitude of the local population to corruption. As a result, the local population is vulnerable to actions which are normally considered to be illegal and ethically unacceptable, including bribery. Therefore, a company starting business in Mexico should focus on the establishment of new moral and ethical standards among local employees. What is more important the company has to develop the effective interaction with the local authorities and avoid illegal practices. In such a situation, the development of the effective relationships with the local authorities should be grounded on transparent policies.
At the social level, it is necessary to remember about the high degree of poverty among the local population. The low level of income of the local population increases the social responsibility of the company starting its business in Mexico because local employees are often unable to afford health care services and other essential needs. In addition, the educational level of local employees is another important issue because the higher education is not available to many Mexicans, whereas the higher education received in the US is considered to be a significant advantage in the local labor market. As a result, a company entering Mexican market can face the problem of the shortage of well-qualified local professionals with higher education. On the other hand, it is possible to employ Mexican employees, who got their higher education in the US. In such a way, it is possible to close cultural gaps with local employees with the help of Mexicans with higher education received in the US.
Thus, taking into account all above mentioned, it is possible to conclude that the development of business in Mexico has good prospects, especially if business refers to the tourist industry. Mexico has a favorable physical location, being close to the US and with great recreational potential. On the other hand, investors should take into consideration local cultural and social specificities, such as cultural diversity, corruption, bureaucracy, poverty, social disparity and a relatively low educational level of the local population. Nevertheless, the labor market of Mexico has a huge offer of a relatively cheap labor force.