Reprinted with the permission of the SHRM Global Forum Institute for International Human Resources
ABOUT THE AUTHOR

Mr. Michael Grunsten, a native of Buenos Aires, Argentina, has managed maquiladoras on three Mexican border cities for U.S., Canadian and French corporations for over twenty-five years. Being bicultural and having worked both in U.S. plants as well as maquiladoras has given Mr. Grunsten a vantage point in synthesizing two systems.

Mr. Grunsten holds a Bachelor of Science degree in mechanical /manufacturing engineering from the University of Illinois–Chicago, studied production and operations management at Northwestern University’s Kellogg Graduate School of Management, and holds a Master’s degree in Interdisciplinary Studies focused on international operations development, from the University of Texas at El Paso.

“The universal elements of engineering, operations and products are most certainly basic in the administration of a maquiladora. It is, however, essential to integrate an understanding of personality and culture into the management formula.”

Mr. Grunsten is the author of The Maquiladora Survival Guide, a Reader for Mexican Industry Executives, and has lectured at U.S. and Mexican Universities on the topic of maquiladora management.

The four–step strategy presented in this paper has been implemented successfully in operations manufacturing a broad product range: from defense electronics to artificial Christmas trees. It is a strategy that adapts to the experiential and cultural aspects of the maquiladora while giving the U.S. manager an effective structure by which to administrate the company’s offshore operation.

©2000. Papers for ‘International Focus’ may be submitted to Sara Costello at the Institute for International Human Resources, 1800 Duke Street, Alexandria, VA 22314-3400 USA. Sara may also be contacted through E-mail at scostello@shrm.org or by telephone at +1.703.535.6202 or by fax +1.703.535.6497.

INTRODUCTION

Modern industry is still relatively new in many developing countries; the workforces and management staffs in these countries tend to be younger and less experienced than those in more developed countries. These factors, along with cultural implications, present a significant hurdle in light of current expectations of quality, delivery, and cost performance.

The Mexican maquiladora program is somewhat unique as a foreign operation in that the primary purpose is to provide assembly labor. Raw materials enter from outside the country, and once assembled, leave the country. Since the products are generally not marketed in the host country, the need to understand the culture is, unfortunately, minimized. The attitude of the visitor country is that the assembly technology is well understood and just as easily transmitted. As straightforward as this approach may seem, it will, in most cases, cause significant human resource and production problems.

The parent company is the initiator of the maquiladora. It often assumes that the new plant will be identical to the home operation. The argument is put forth that the experience and culture pose challenges to those assumptions.

While there is considerable literature available on social courtesies in international cultures, there is a need to understand the impact of those cultural norms on the day-to-day activities in the workplace. For example, studies and empirical evidence conclude that U.S. personnel feel less comfortable with strict and formal rules and prefer that control take place through mutual adjustment, whereas Mexican personnel expect leadership and guidance. Equally challenging is dealing with the significantly different level of industrial experience.

The new international manager arriving at a company’s maquiladora operation does so with expectations based on his or her management model, a model formed by the home country. Three aspects of a management model will be discussed—organizational responsibilities, skill sets, and attitudes. The three topics will be examined from the U.S. and the Mexican perspectives.

ELEMENTS OF A U.S. MANAGEMENT MODEL

Organizational responsibilities

The various functions of the U.S. industrial operation are assigned to individual departments. The mission of these departments is to define the processes and procedures that govern the various aspects of manufacturing. It is then the job of the departments to execute, monitor, maintain, and adjust the system on a daily basis. While many of the functions of the different departments are routine, the managers of the production departments call on the other departments to give support as events outside of the norm occur.

The U.S. production manager is generally a highly experienced and authoritative veteran who is intimately familiar with the product and procedures of the company. This U.S. manager is on the front line of production and is thus constantly monitoring and assessing the manufacturing process. This gives him or her the ability to analyze situations and the course of actions needed on their floor quickly. Because of their experience, knowledge and responsibility, these managers have the formal and informal authority to summon the support of the other departments on command. The U.S. manager expects the same type of capabilities and authority from production managers in Mexico.

Skill sets

Manual Skills

The manual skills required in a manufacturing operation depend on the complexity of the products being manufactured. The majority of the work in maquiladoras is the assembly of components into a finished product. While the dexterity required is not complex, the level of quality required calls for attention to detail. Reaching the quality levels required calls for extensive monitoring. Data recording and analysis are also required.

Record Keeping

The majority of personnel in U.S. plants have extensive experience with record keeping. It is a constant in their personal life—checking and credit card accounts, income tax records and retention of receipts are a few examples. Collection and analysis of information in the plant is a carryover of their personal experience.

Equipment Maintenance and Repair

While much work is carried out manually or with the aid of simple tools, most of the work in assembly operations is performed on machinery. There is a need for skilled mechanics and technicians to operate and maintain such equipment. Discretionary income in the U.S. is such that preventive maintenance is affordable and commonplace. U.S. maintenance personnel are accustomed to replacing machine components and carrying out preventive maintenance.

Attitudes

The U.S. manager’s model encompasses traits that he or she feels are necessary to be effective in accomplishing the tasks of the plant. These attitudes include, but are not limited to the following:

Initiative—encouraged at all levels of the organization.
Authority and responsibility through confidence derived from experience or practice; firm self-assurance and the ability to make rational decisions on one’s own and therefore answerable for one’s own behavior.
Assertiveness—stating strongly or positively with assurance, confidence or force.
Discipline—application, energy, behavior, and outward marks of respect towards agreed rules and customs.
Subordination of individual interest to general interest—through firmness, example, fair agreements, and constant supervision.

THE MODEL — AN ASSESSMENT IN THE MAQUILADORA ENVIRONMENT

Organizational responsibilities

The organizational structure of the maquiladora tends, by design, to mirror the structure of its corporate counterpart. With few exceptions, however, the Mexican supervisor or manager tends to be much younger and less experienced and hence does not carry the same authority as his or her U.S. counterpart. As a result there is a need for support departments to play a greater role in daily production activities.

Skill sets

Manual Skills

Manual dexterity is not culturally derived and, for the most part, is not experience related. It then becomes a matter of training personnel in specific tasks involved in putting the new and often unfamiliar products together.

Record Keeping

Record keeping in the personal life of most on the border is limited to birth certificates, school certificates, and receipts for bills paid to governmental agencies. Receipts for utilities are kept to avoid being charged again. Record keeping for personal tax purposes is virtually nonexistent; there are few deductions available. Store receipts are kept in cases where merchandise is bought on lay–away or as proof of payment; return of merchandise is significantly limited in Mexico.

Unlike their North American counterparts in U. S. plants, Mexican factory employees generally do not have personal checking accounts. Checking accounts are limited to a minimum salary level—which would include only those at the higher levels of maquiladora management.

While there exists a large base of individuals with an education in accounting, record keeping is not a skill that the average maquiladora worker brings to the job. While it is not difficult to collect data, inexperience makes data reduction a problematic area.

Equipment Maintenance and Repair

Equipment maintenance and repair skills, require special attention. Preventive maintenance in the home is a function of discretionary income. Such funds in the border area are somewhat limited. As a result, there is a tendency to wait until a breakdown occurs and to repair afterwards. Mechanics attempt to repair components rather than replace them. While the willingness is there to work hard, and often with great ingenuity, to keep equipment running, it is best to replace damaged or worn parts to avoid incurring much higher costs.

Attitudes

Through extensive studies Diaz–Guerrero (1967) has identified traits in groups and has sorted them into what he refers to as “passive and active syndromes,” suggesting that “Mexico may be the model for the passivity syndrome” while “the model of the activity syndrome is the United States.” Diaz–Guerrero’s active and passive syndromes are presented as they might relate to the personality traits that make up part of the aforementioned U.S. manager’s model. Hofstede’s four work–related dimensions, developed through his research in 50 countries, aids to assessing the cultural attitudes in the maquiladora.

Initiative — The power or ability to begin or to follow through energetically with a plan or task; enterprise and determination. (American Heritage Dictionary, 1994)

Mexico U.S.

—Less rather than more action

—More rather than less action

—Man has limited power and

aspirations

—Man has unlimited power and

aspirations

—Fatalism of personal initiatives for

work plans of activity

—Optimism of personal initiatives for

work or plans of activity

Authority and responsibility — Confidence derived from experience or practice; firm self-assurance and the ability to make rational decisions on one’s own and therefore answerable for one’s own behavior (American Heritage Dictionary, (1994)

Mexico U.S.

—Prefers to obey rather than to

command

—Prefers to command rather than to

obey

—Tendency to use indirect types of

behavior towards surroundings or

other individuals.

—Tendency to use direct types of

behavior, he himself modifies the

environment

—Work or task achievement done in

obedience to others

—Work or task achievement done

autonomously

Assertiveness — stating strongly or positively with assurance, confidence or force (American Heritage Dictionary, 1994)

Assertiveness is more valued in countries with charactertics such as those of the United States, there may be a feeling that conflicts should be resolved by openly fighting them out (Hofstede, 1991, p. 92). In Anglo cultures, the non–assertive strategies of withdrawal or smoothing are equated with an admission of defeat; the individual who habitually withdraws from conflict is likely to be scorned as ineffective. One study shows that among U.S. managers, withdrawal is the least often used means of conflict resolution, and confrontation is the most often used (Burke, 1970).

Discipline — obedience, application, energy, behavior, and outward marks of respect in accordance with agreed rules and customs (Morgan, 1986)

Mexico U.S.

—Modification of a subject’s behavior

by other individuals, institutions or

premises

—Modification of the subject’s

behavior by his own independent

and autonomous motivations

—Compliance, through modification

of self, to external stresses in order

to adapt to them

—Modification of the environment, to

have environment adaptable to self

—Greater degree of acceptance of

authority

—Lesser degree of acceptance

towards authority

Power Distance

Power distance, one of Hofstede’s four dimensions, is the extent to which inequality (a pecking order or hierarchy) is seen as an irreducible fact of life. It conditions the extent to which employees accept that their boss has more power than they have and the extent to which they accept that their boss’s opinions are right because he or she is the boss.

The score for Power Distance in Mexico is high: 81. For the U.S. the score is low: 40. (Hofstede, 1984)

Subordination of individual to general interest

Mexico U.S.

—Virtue in self denial	—Virtue in self fulfillment
—Modification of a subject’s behavior by other individuals, institutions or premises	—Modification of the subject’s behavior by his own independent and autonomous motivations
—Tendency to achieve harmony and collaboration rather than competition between human beings	—Tendency to compete rather than collaborate to succeed, even if it breaks harmony with others
—Cooperation	—Competition

Uncertainty Avoidance

This characteristic, another of Hofstede’s work–related dimensions, is reflected in the initiative and authority aspects of the model. Uncertainty avoidance is the lack of tolerance for ambiguity and the need for formal rules. This dimension measures the extent to which people in a society feel threatened by and try to avoid ambiguous situations. (Hofstede, 1984)

The score for Uncertainty Avoidance in Mexico is high: 82. For the U.S. the score is low: 46.

Combined Impact of High and Low Scores on Both Power Distance and Uncertainty Avoidance (Hofstede, 1984)

Both scores low (US) — Individuals feel less comfortable with strict and formal rules. Control and coordination tends to take place through mutual adjustment and specifying desired results.

Both scores high (Mexico) — Management is expected to provide leadership, guidance, coordination and control.

SUMMARY PROFILE OF THE MAQUILADORA

From the cultural aspect, it is clear that the Mexican national in the maquiladora has a very different perspective than his or her U.S. manager or co–worker. The staff of the maquiladora expects direction and control from management. The personnel are willing to dedicate their efforts to the benefit of their fellow workers and leaders as well as their own. They expect to do so in a non–confrontational, harmonious manner.

A FOUR–POINT STRATEGY

This writer created the four-point strategy presented below to allow individuals with greatly varied cultural attitudes and experience to meet those customer requirements in joint effort. The strategy consists of the following points: Process, Accountability, Support, and Service. While none of the concepts are new or revolutionary, they are particularly suitable for the maquiladora environment.

PROCESS — Defined Procedures and Processes

The products manufactured in the maquiladora and the skills needed are new to most of those in the plants. It is therefore essential that all aspects of the operation be defined in detail.

The basis of an industrial operation is the procedures that define the manufacturing processes for its products. The quality, cost, and delivery demands in today’s market leave little room for error: reliable processes must be well defined and followed.

The process of baking a cake is a useful analogy here. You have the recipe for a cake. Each ingredient is listed out: 2 cups of flour, 2 eggs, a tablespoon of sugar and a cup of milk. You mix the milk into the flour; you add the sugar, then the eggs. You stir everything together and put it into an oven at 350°F for 35 minutes.

Follow that recipe and you will have the same cake every time. If you do not get a perfect cake, go back and you will discover that the cook had only one egg in the refrigerator and attempted to compensate for the missing second egg with extra milk. You may find that the large cup used for measuring is more like a cup–and–a–half. Or the oven really is heating up to 375°F instead of 350°F. You will almost always find that if the cake did not come out right, it was because the recipe was not followed exactly. Manufacturing processes are similar to making a cake. The components to be assembled and the process must be specified precisely.

The company must not expect refinement on the production floor, a process sometimes likened to repairing an automobile engine while it is running. It is important to recall that these types of operations were once new to those in the U.S., and refinement spanned many decades. Additionally, conditions are more demanding in light of recent customer expectations in quality, delivery, and cost.

ACCOUNTABILITY — Accountability Through a Graded Daily Audit

Operations in the maquiladora can be defined as clearly as the recipe for the cake. It then becomes a matter of providing the recipe for manufacturing the product, materials, and tools.

The accountability audit increases the likeliness of correctly manufactured products as it addresses many of the cultural aspects of the personnel on the production lines. Uncertainty as to responsibilities is avoided—each individual has a clear list of items that are to be carried out in the process and the tools he or she needs to do so.

The list gives the lead operators and supervisors clearly defined tasks. These administrators then contact each operator daily to confirm that each step in the process is understood and is being carried out. The supervisors have the opportunity to greet and acknowledge the individual on their lines.

There is a unifying effect as the daily audit scores are posted. A continuous 100% score creates a sense of confidence that comes from the reassurance that the process is being followed correctly. If the product does not come out as it should, the responsibility then is on those who design or modify the process. The work of the operator is defined and doable—making for a pleasant, predictable and productive work environment.

The audit operates in the following manner:

Industrial engineers provide a process that is well defined and has predictable results.
The specific elements of the process are posted and recorded on a computer.
The same elements are explained to the operators who will be following the process.
The computer is programmed to randomly select a number of elements to audit.
An auditor checks to confirm that the elements are being carried out as prescribed.
An element in the audit that is being carried out as specified earns a point (1)
An element that is not being carried out as specified scores a zero (0); the deficiency is corrected immediately.
The results of the audits are posted and become the base of performance appraisal. (As an example: a score of 90% is the minimum acceptable score; at 95% the employee gets the going increase; above 95% an additional amount is given.)
The audit includes tracking elements of the process that fall into the responsibility of the non–production support departments as mentioned above.

SUPPORT — Placing Expertise on the Front Lines

As discussed, the U.S. production manager and his or her staff stood on the front lines and summoned assistance as required. The level of experience in the maquiladora calls for a different way of providing support. Production supervisors have their hands full, assuring that the production lines are peopled, that new and old employees are instructed on how to perform their jobs, and making sure that the work is done according to quality and time standards.

Industrial or manufacturing engineers are the ones responsible for technical issues on the production floor.

Maintenance personnel are to take preventive steps to assure that equipment runs properly at all times. Upkeep is defined for in the same manner that the processes are defined for the production personnel.

Production control personnel are to analyze and schedule production. The scheduler coordinates the issuance of material with material control personnel

The support described gives the production supervisors the time to attend to those working on the lines.

SERVICE — A “Customer–Directed” Graded Service

As discussed, confrontation in the maquiladora environment is not perceived as desirable, and indeed avoided whenever possible by Mexican personnel.

Many of the tasks between departments are not routine. Conflicts often arise and since confrontation is shunned, it is common for some projects to go undone. This creates further problems laying further burden on those needing the service.

The use of requisition forms to summon service from other departments is standard practice in U.S industry. The process presented here is modified to assure that the service is completed in a timely manner and at the same time, promote harmonious working relationships.

The key modifications of the procedure are these:

The requesting department sets the date that the work will be completed (more often than not the servicing departments work to their schedule).
The requisition is entered into a computer for tracking.
Support departments are scored on their timely completion of their tasks (this is also unique in that only production departments are measured on a daily basis).

The benefits of this system are as follows:

Departments get what they need to carry out their job.
Completion of projects is tracked by an impersonal agent.
Scoring serves as a reward system and defines the tasks of the service departments.

CONCLUSION

Those associated with the maquiladora, whether the Mexican national or the U.S. employee, have the same objectives in mind: manufacture to the quality, delivery and cost standards defined by the parent company and dictated by the market. While this commonality exists, the points presented in this writing support what many U.S. and Mexican personnel that work in these maquiladoras have known for some time—there are many differences in the way either thinks and acts.

The four-step plan presented allows both to function within their cultural and experiential frame of reference while meeting their common objectives. The cultural and experiential differences can be analyzed and addressed as they have been in this paper. Understanding the differences is the first step in the adaptation of the corporate operation into its Mexican maquiladora.