U.S.-Mexican Alliance Negotiations: Impact of
Culture on Authority, Trust and Performance
T E E GE N, H I L D Y J . & D O H , J O NA T H AN P .
THUNDERBIRD INTERNATIONAL BUSINESS
REVIEWS, DECEMBER 2002
Ayçin Irak
2008762168
Culture, Strategic Alliances & Negotiation
 Strategic alliances:
To control uncertainty in the environment
 To access products, technology and other important resources.
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 In the alliance arena:
Value claiming activities (competitive, pie slicing, distributive
negotiation): seeking authority advantage over partners
 Value Creating activities (collaborative, pie expanding, integrative
negotiation): partners balance authority; allowing each party to dictate
certain activities within the alliance.

Impact of National Culture on Negotiations
 Hofstede’s dimensions:
High vs. Low Power distance
 Strong vs. Weak Uncertainty avoidance
 Individualism vs. Collectivism
 Femininity vs. Masculinity

Uncertainty avoidance, in particular, cause problems among partners.
 Differences in cultural backgrounds:
 Cause problems
 Negative impact on alliance survival
 Decrease the likelihood that firms enter a foreign country through
an alliance

Mexican Culture Characteristics
 Strong
elements of mestizo
culture- a combination of
Iberian
and
indigenous
language, ethnic makeup,
social and political customs
and approaches to business
relationships.
 High power distant
 Strong uncertainty avoidant
 Collectivist
 Masculine.
Authority, Trust and Performance in Alliance
Negotiations
Authority
 Authority as contributor to alliance performance.
 Authority Advantage: directing the alliance’s activities in accordance
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with its own objectives.
Authority Balance: working in relationship based on reciprocity in
alliances.
Mexicans should seek authority advantage due to their masculanity.
Instead, they favor authority balance due to collectivist tendencies and
high power distance.
Although high in unceartinity avoidance, Mexicans confront the highly
unceartain and dynamic environmental conditions.
Trust
 Trust allows a firm to rely on the partner confidently.
 Mexicans place greater value on trust due to their low
individualism and high unceartinity avoidance.
 Historic suspicions between U.S. and Mexicans result in even
greater value of trust.
 Trusting relationships will have better performance.
Alliance Performance
 Masculine cultures: Achievement orientation of success.
 Individualistic cultures: Success as defined by benefits
significant to that firm as opposed to those of the alliance
as a whole.
Three confirmed hypoteses
 H1: Mexicans firms will perceive authority balance to associate
with greater alliance performance. They will perceive authrity
advantage to hold wiht lesser alliance performance.
 H2: Where Mexican firms trust their U.S. Alliance partners, they
will perceive greater alliance performance.
 H3: The positive relationship between authority balance and
alliance performance will be weaker when Mexican firms trust
their U.S. Alliance partners.
 Mexican firms don’t view authority advantage in a positive light.
Mexico is a business setting wherein maintanence of relationships is
highly regarderd (in contrast to U.S.)
 Mexico is collectivist.

 Mexican firms attache positive views to authority balance.
Mexicans are agiled diplomats who avoid confrontation.
 Mexicans are strong power distant and high unceartinity avoidant.

 Trust affects authority balance and performance.
When a Mexican firm trust the other party, balancing of authority is not
critical for enhancing performance.
 In low-trust conditions, it is important to negotatiate with balanced
authority.
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Why U.S.-Mexican Alliances Fail?
The Contribution of the Culture
 U.S. & Mexican firms often get together for the wrong reason.
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Two partners should contribute resources that are mutually
beneficial and complimentary.
For Mexicans, it is important to perceive a balanced control
over the direction of the alliance.
Mexican firms take a more collectivist perspective, U.S. Firms
focus on financial return.
Mexican firms seek long term survival of the relationship.
Mexicans see U.S. managers as too direct and speaking so
openly.
Mexicans feel U.S. as too fast without first consulting their
counterparts, Americans feel that Mexicans are too slow.
 In Mexican firms, decisions are made at the top of the hierarchy.
 U.S. Partners want to know what went wrong, Mexicans avoid to
criticize Americans eat at their desk, Mexicans take a long lunch
break.
 Mexicans see contracts as kind of ideal things that you strive to
achieve, Americans see them as laws.
 Mexican except unquestioned loyalty from employees, but
foreign partners are initially viewed with mistrust.
 Slaes transactions take long time in Mexico due to the
importance of trust building before finalizing the contracts.