Academic journal article International Journal of Business

A Comparison of Management Style for Mexican Firms in Mexico and the United States

Academic journal article International Journal of Business

A Comparison of Management Style for Mexican Firms in Mexico and the United States

Article excerpt

I. INTRODUCTION

The literature indicates that culture influences the way firms are managed. Mexico and the U.S., although very close neighbors, have different cultures and the literature reports that the management style of managers in each country is different. The literature further notes that location of foreign firms and their proximity to their central firm may influence managers to amend their management style to the culture prevailing where the firm is located. Important work has been done to understand the culture of different countries and its impact on the management style used in enterprises. The work of Likert (1967) in establishing a measurement system to assess the degree of employee participation in management has been crucial and his approach is widely used to compare the management style of managers operating across countries. Likert (1967) characterizes an organization's management system on a continuum ranging from exploitive autocratic (System 1) to participative (System 4). Later in his experimental work, Likert and Likert (1976) reported that in the most highly industrialized nations, management styles tend to be concentrated more on the System 4 of the continuum and away from System 1 while the reverse is true for less industrialized nations.

This paper seeks to determine if managers in Mexican firms located in Mexico continue to use the authoritative management style as indicated in the literature and to determine if Mexican managers in firms located in the U.S. have similar management style as their counterparts in Mexico or because of their U.S. location Mexican managers have amended their management style to more closely conform to the U.S. culture. This work adds to the literature in two ways: (1) the research compares Mexican managers operating in their own country and operating in the United States while most of the research in the literature compares American managers operating in two different countries or compares Mexican managers to American managers and (2) the management style of Mexican managers using the Likert questionnaire was last completed in the work of Morris and Pavett (1992), so this research will provide a current insight as to how Mexican managers are today managing their firms.

The importance of this study relates to the bilateral commercial relationship between the U.S. and Mexico and their proximate geographic location. In addition, in 1994, both countries signed the North American Free Trade Agreement (NAFTA) which has increased their mutual trade and foreign direct investment. Between 1994 and 2005, the US-Mexico foreign direct investment flows increased substantially from $16,968 billion to $71,423 billion. By 2007, the Mexican commercial relationship with the U.S. almost tripled from $297 billion to $930 billion (Secretaria de Economia, 2005 and Office of the United States Trade Representative, 2008). This mutual increase in business inherently has had an attendant growth for the number of foreign enterprises who have situated in each country.

The growth of trade between the U.S. and Mexico and the increase in the number of Mexican firms who have established locations in the U.S. has created a need for understanding the way Mexican firms in the U.S. are managed and how they might differ from their counterparts in Mexico. This study reviews the management factors relating to goal setting, decision making, communication, leadership, motivation, and control that influence the management style of managers of Mexican firms located in Mexico and the U.S. Two research questions are considered in this study.

(1) Do Mexican managers of Mexican firms located in Mexico continue to use the authoritative management style?

(2) Do Mexican managers of Mexican firms located in the U.S. use the same management style as their counterparts in Mexico or do Mexican managers of Mexican firms located in the U.S. amend their management style to more closely conform to the culture in the U. …

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