David Alan Binder welcomes you. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ “Everything that we see is a shadow cast by that which we do not see.” ― Martin Luther King, Jr.

Yes, I am looking for authors to interview of published books.
Join the community of authors interviewed,
quite the diverse group at this link:
Then please contact me for details!
ab3ring AT juno DOT com
dalanbinder AT gmail DOT com

Credits:  Sunrise by Dan at http://www.freedigitalphotos.net/

So what compels me to be a writer?  My feelings and being in touch with them and using them to write down how I felt and dealt with various situations that happened to me in my life and a self help to heal and ease whatever torment or elation I was going through at the time.  Another influence was the Moody Blues, they struck a chord within me.

Just less than a year ago I read Jeff Goins headline on his site goinswriter.com which stated, "You Are a Writer (So Start Acting Like One)".  This gave me the permission to do what I had been born to do, to go ahead and take the plunge and start again for the thousandth time with the impetus to not stop.  (Sorta like quitting smoking in reverse.)  The thing is I never stopped writing what I had stopped was trying to get out there, to get published, to make it happen, to live the dream, to catch the rainbow.  Come run and catch rainbows with me and we can live happy and free and find the everlasting peace that comes from chasing (and maybe actually catching) it.  After all it is the journey that makes us who we are, we all get somewhere, maybe just not where or how we intended to end up.

Manuscript, whether your hands perform the action of scripting, hence manuscript from when all documents at one time were written, before the printing methodologies came into being.

Parchment, a work written on the skin of an animal or even possibly human in a culture now unknown.

Scribe your best work and pour your heart and soul into with flowing metaphors like a fountain splashing upon the medium of your choice.

Write as rain, cleansing your mind and anticipating the moisture feeding the minds of the world.

The Musician by David Alan Binder
He had gotten his first instrument as a child practically.  He played with it getting familiar with the nuances of how to make noise that was pleasing.  His parents relegated him to his room at times, or the garage, or at others to a nearby copse of trees not far from home but far enough that he could barely be heard, which was the best way for them to get through his learning process.  So as he became more adept he experimented sometimes failing miserably but comfortable that he was still learning and progressing.  Each failure represented getting closer to that perfection of sound that people wanted to hear and would eventually pay to hear.  He practiced getting better, honing his craft for by now he was becoming a craftsman.  One that understood the subtleties of the instrument.  Eventually he became so adept that he could not only tune the instrument on his own but replace parts that had worn to the point that they needed to be replaced.  He furthered his knowledge one day by taking the instrument completely apart then was able to reassemble it and got the satisfaction of knowing his instrument inside and out and thoroughly in tune with it.  It became a projection of himself, his persona, his extension of himself into anther atmosphere.

Now he plays on a stage with other musicians like him who had gone through similar processes until they became craftsmen,  They became masters of their playground and are in demand and people pay lots of money to hear them.

Become like them, hone your craft through hours of practice and know your instrument inside and out and be able to express yourself in ways that move yourself first then others.

This work is automatically protected the moment it is written down it does not have to be "registered" for a copyright for it to be valid.  According to http://copyright.gov/help/faq/faq-general.html#mywork
"Your work is under copyright protection the moment it is created and fixed in a tangible form that it is perceptible either directly or with the aid of a machine or device."

All rights and permissions are reserved by the Author, David Alan Binder and may not be reproduced except with permission.




PA660 Final Paper

November 30, 2010

David Alan Binder


I recently read a book by David Faber named, “And then the roof caved in – How Wall Street’s Greed and Stupidity Brought Capitalism to its Knees”.  This relates to our class in so many ways and brings home the crucial questions of whether capitalism should be allowed to be unrestricted like Milton Friedman and Friedrich von Hayek have asserted or if it should be regulated as John Keynes has espoused.

The subject matter presented in the book is about the financial crisis that hit the United States in 2007 but which started in 2001 and is linked directly with the dot com bubble busting and then September 11, 2001 terrorists attack on the United States.  How it might be asked could these three incidents be inexorably linked?

The dot com bubble started before 1999 and the date problem for computer software involving the date 2000.  Between this and the technology investment fervor which in 1999 to give one example from the book had Yahoo! Stocks valued at 150 years of earnings that the company could make from annual revenue.  How can a company be expected to be worth that much money?  When one looks back on that figure someone somewhere should have thought this is not practical let alone possible for a company to achieve that kind of worth.  So money was lost and the investments stopped and the bubble popped.  This meant layoffs in the technology industry to the tune of approximately 11,000 a month near the end of 2000.  Because of the slowing economy and the job losses wealth started vanishing and the economy slowed down and then came to a halt in mid 2001.  Fed Funds were 6 percent in 2001 near the beginning and by August of that year were down to 3.5 percent.  Then the September 11 (911) terrorist attack on the twin towers in New York happened.  September 12 the Fed lent billions of dollars to banks for liquidity to keep the “system” afloat.  This was in an effort to keep faith in the economy.  The fear of an economic collapse was high so Alan Greenspan desperately cut interest rates.  Six days after the attack the Federal Funds rate was cut to 3 percent.  Two weeks after that, it was cut another one-half percent to 2.5 percent.  November 6, 2001 the interest rate was cut another one-half percent down to 2 percent, and then a month later another quarter of a percent was cut.  By 2003 the interest rate was 1 percent.

This low interest rate succeeded in starting to fuel the economy as people saw housing interest rates fall from 8.05 percent (average) in 2003 for a 30 year mortgage to 5.84 percent (average) in three years.  This meant that “a one-year adjustable rate mortgage could be secured with an average interest rate of 3.76 percent in 2003”.  This fueled the housing boom.  This interest rate cut is linked to the subprime mortgage industry which was originated sometime back in 1993 and tied to the Community Reinvestment Act (CRA) (the act goes back further than that though).  Banks wanted to increase participation in the CRA since this was driven by congress to get more homeownership to people who could not afford prime loans.  In order to do that banks got into Adjustable Rate Mortgages (ARM’s), interest only ARM’s, Hybrid ARM’s, Negative Amortization ARM’s, and Option ARM’s all of which enabled subprime borrowers to afford housing in some way or another.  This market was drying up and about to die according to the author when 9/11 hit and the interest rates fell and the ARM market was able to tap into this market and started fueling the fire.  The fire was the housing boom and as long as interest rates fell or stayed the same and housing prices increased it was easy to refinance and purchase another home and flip it.  Flipping a house is buying it and performing some cosmetic work on it and a few months to a year later selling it at a greatly increased value since house values were going up steadily to increasingly to drastically.  Soon regular people were doing this since there was so much money to be made.  It was also easy to refinance a house you were living in pay off car and credit card loans or put in a swimming pool and basically use the house as an ATM machine to use the higher equity in value of the house of a year or more and use that money to do something else with it.  This gave Americans lots of money flow to purchase and spend and fuel the economy more.  So Federal people who should have been carefully watching this trend sort of ignored or just plain liked it since it spurred economic growth.  Examples were given in the book where some of these loans were so bad and with no money down and people taking out second mortgages to start a business and eventually the greater demand for these loans the decreased scrutiny in origination took place.  Why?  It was because these loans were sold by banks and institution as fast as possible to increase profit and to distance themselves from the loan coming back and haunting the originating financial institutions, since there was virtually not a worry about whether the loan would be paid since it was no longer an asset of the originating institution. 

In 2002 Dr. Edward (Ned) Gamlich who served on the Federal Board of Governors for eight years tried to warn Sheila Blair who at the time was a Department of Treasury senior backing official (she would run the Federal Deposit Insurance Corporation (FDIC) during the banking crisis which was the worst in a seventy year period).  In spite of the warnings no one took heed since the question was asked, “who’s complaining” and the answer was no one “Everybody’s making money,…so what’s the problem?”.  As long as the mortgage Ponzi like scheme was working no one cared about it or the future.  The real deal came down to since many mortgagees did not have to document their income anyone could get a loan.  Some institutions are to have alleged to have put in the income of the loan recipients without their knowledge of what was reported and other recipients just lied.        Two institutions that profited from this mortgage “money train” (P62) were the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).  The book tells how these institutions stated out as government entities in 1938 and in 1968 went public and the status changed from entity to Government Sponsored Entities (GSE) this essentially means they are sponsored and funded by the government but are run by a private corporation (sarcastically this is the best of both worlds in order to have the backing and legitimacy of the government and yet be able to be run as a private enterprise).  November 2003 both of these institutions have understated its earnings Freddie Mac by $5 billion and the Fannie Mae also it was later found.  This enabled them to show a steady increase rather than reporting drastic increases and then maybe later showing decreases.  It enabled them to smooth the curve showing steady increases and thus “hedge its exposure to changes in interest rates by using derivatives”.  So if their earnings showed up as being less volatile than they actually were.

The Office of Federal Housing Enterprise Oversight (OFHEO) published a report in 2004 that left Freddie Mac and Fannie Mae with shattered reputations and Congress upset and the regulator (OFHEO) wanting accountability for this situation.  Because of this report both of the GSE’s began to cut back on the number of mortgages when the demand was increasing.  So mortgage originators became creative with no “baby sitter” to dictate standards.  Mortgage originators needed a buyer and they found one on Wall Street.  The first companies to sell their mortgages on Wall Street found it easier since the standards were relaxed and this opened the deluge.  “The moment the mortgage originator met an unregulated Wall Street those are two wires you don’t want to cross.  Because the mortgage broker is there to help the consumer get the house, buy the property.  They’re not naturally going to be saying ‘Oh, you know, I don’t want to do this.’ ” (P65) Four trillion dollars worth of mortgages was originated in 2003 in the U.S, which is the largest amount in history.  Although 70% were sold to the GSE’s (Fannie and Freddie) so they conformed to the standards and rules to three years later when that percentage slipped to 30%.  Wall Street loved to make money and had always had Mortgage Backed Securities (MBSs) and funded the first subprime lenders and resold those products to investors which had “a much higher interest rate and a lower credit rating than anything sold by Fannie and Freddie because they carried a higher chance of default.” (P65)  Wall Street generally conformed to the Freddie and Fannie rules.  Fannie and Freddie did not loosen the rules it was Wall Street who took over in the absence of Fannie and Freddie that loosened the rules.  When Wall Street started buying mortgages different institutions would tout their place of business by stating that they have access to much capital that mortgage originators needed and it will be quick which originators required.  This quickness of payment was a deal maker in the form of a line of credit originators could use and then sell it to Wall Street and like a huge conveyor line these mortgages would be bundled into MBSs and get sold.  The whole crux was the volume that Wall Street could provide due to large amounts of capital and the conveyor became faster and faster since demand was great.  This conveyor gave Wall Street great power the easier for the borrower the faster Wall Street made money so streamlining came into being and if the cost is same but work is less this facilitated reduced guidelines.  The quick and easy way was best so the buyers demanded more and the originators said okay let’s let them have it.  So as the standards dropped to 95 percent loan to value and in addition the higher the rate on the mortgage the more money that could be made via a Wall Street rebate.

            Other countries started to buy the MBSs like China and other Asian countries whose economies were soaring, while Russia and the Middle East who had an oil glut and therefore cash to invest also invested.  Wall Street was able to capitalize on having all the products these countries wanted like mortgage bonds, convertible bonds, corporate bonds, and debt restructuring, so it was one stop shopping.  Lehman Brothers took on a whole new angle by buying originators to keep the money making it all under one roof.  As the demand increased the standards were loosened since if one Wall Street firm refused to buy the mortgage another would.  No one thought, is it safe to have a stated income on the loan rather than verified income?  To do that would bring the whole production to a halt since to do the right thing slowed things down too much. 

            An interesting note that even though subprime loans had much potential risk they also had better profit margins and this also satisfied Congress (remember the Community Reinvestment Act (CRA) which desired more Americans become home owners.  Lenders in Irvine California who used Wall Street were able to tell Freddie and Fannie that “you need us more than we need you” now.  Some at Freddie and Fannie tried to pull back when in 2004 when an e-mail to the CEO of Freddie Mac from the chief risk officer urged the company to not buy loans from borrowers who less qualification and no income or asset requirements for loans.  The chief risk officer was fired and Freddie and Fannie plunged ahead into that market.  This move was applauded by influential congresspersons as well.  So with Wall Street and Freddie and Fannie all lining up to buy these loans the conveyor ran faster and faster so that in 2005 80% of the subprime loans were made into MBSs and sold to deep pocket investors all over the world and became the chief export of the United States.

            Now the ratings agencies were also heavily involved since if they had not been complicit there would have been not much of a crisis.  These ratings agencies are companies like Moody’s Investors Service (the only public company), Standard & Poor’s (owned by McGraw-Hill Co.) and to a smaller extent Fitch Ratings who is owned by France’s Fimilac.  “The rating agencies are not regulators.  And yet, for a long time they were treated like regulators.” (P82)  Many companies used these ratings agency ratings as benchmarks for investors that bought the bonds.  Most investment portfolios like pension funds, money market funds, insurance companies and endowments are not allowed to buy debt that is not investment grade which was determined by the ratings agencies.  In some states “insurance regulators mandate that companies they oversee may buy only securities that receive the top four ratings from nationally recognized statistical rating agencies” (P83) like those mentioned above.  Those levels are Aaa, Aa, A, and Baa the top four out of nine ratings available down to C.  So if a ratings agency downgrades a company even one level it can cost that company more in interest rates to borrow money.  Since AIG was downgraded their perceived ability to pay was such that they needed more reserves for the extra risk and AIG was selling credit insurance on MBSs.  Additionally ratings agencies may receive confidential information from a creditor in helping to decide which rating to give a creditor which gives ratings agencies a weightier opinion.  Moody’s went public in 2000 and in the next seven years until 2007 their profits quadrupled and have the highest profit margin of the top 500 on the S&P for five of those seven years at about 50 percent  The ratings did not boost the profits it was the business of its’ structured products.  Generally, corporation predates the ratings so a history has been established to base the ratings upon; however, when a corporation just starts out with an asset pool and repackages them into a structure it is not a real operating company but a portfolio.  When “the ratings and the corporation are born at the same time” and “…you say, ‘this is triple-A’, who’s to say you are incorrect?  There was no benchmark.  There was nothing beforehand to tell you that there was anything that wasn’t triple-A.  You are creating your own reality.” (P86)  Additionally the issuer of these structured products pays the ratings agencies to rate the products.  This is like “the home team in a baseball game was paying the umpire’s salary” (P87) so it can be problematic.  Ratings agencies are supposed to “manage the potential conflict of interest inherent in that model”.  (P87)  Then the people that run the ratings agencies say the ratings are just opinions nothing more when the public thought they were rules enforcers.  To compound the problem investment banks rate shop for the best ratings for a structured transaction to get the best deal so more profit is made.

            Collateralized Debt Obligation (CDO) may be the worst idea in history which even Alan Greenspan said in 2008 that “some of the complexities of some of the [financial] instruments that were going into CDOs bewilders me.  I didn’t understand what they were doing or how they actually got the types of returns out of the mezzanines and the various tranches of the CDOs that they did.”  (P95)  CDOs were created in 1990 by a junk bond kingpin, Michael Milken.  Junk bonds are a high-yield yet high risk product.  CDO's are essentially loans; albeit ones with complicated paperwork, there is a primary lender and a borrower.  Those loans are sold to secondary lenders and that makes the values go up and down as well as the risk involved.  When money is borrowed there is a cost involved so each time the loan is passed on the amount owed is larger than the previous loan.  If the borrower defaults then that cascades through the system until someone pays or defaults and that is the problem.  Simply put if I loan you $100 dollars at 5 percent then I think I have $105; however, if you pay nothing I have nothing.  If your ability to pay is not checked out by me then shame on me but I sold that loan to someone else and it is there problem so I did not check it out.  I just passed through that obligation and made my money.  On NPR in August 27, 2010 the story about CDOs was they were sausages.  This is a paraphrasing of that aired story.  A bunch of mortgages are ground up with some good loans and some bad loans.  As the demand for these sausages increased less care was taken about the input loans into the grinder as long as product came out the other end.  Then customers demanded better sausage without the ends so the ends (risky parts) were cut off and put into a grinder and voila good sausages came out.  There was a problem though those sausages also had ends to the ends were cut off (risky parts) and the process was repeated all to satisfy demand; however, these sausages were getting much worse (risky) because of the accumulation of risk.

            The author’s second to last chapter, Chapter 10, A House of Cards sums up with a man named Kyle Bass, who worked for Bear Stearns as a short seller and who is one who “borrows shares of a company and sells them, hoping to profit by buying back those shares at a lower price.”, which is extremely risky. (P136)  As a short seller this individual was a very good digger with fourteen years experience in order to find investments to short sell.   In 2006 he founded his own hedge fund, a term used for short seller investments.  He states, “Every single crisis in financial market history has always been caused by free or easy credit.”  (P139)  He knew the crisis was looming which was confirmed when he attended a financial convention in Las Vegas and was sitting at a bar swapping stories with the bartender.  The bartender said that he had been flipping houses (buying and then selling in a few to several months at a higher price) and that the houses were not selling.  Bass knew the crisis was not just looming but was already in progress.

            The toll continues to mount for the U.S. taxpayer who is paying for the mistakes that have been made in this financial crisis.  A report by New York Times on October 19, 2010 Bank of America posted a onetime loss of $7.3 billion.  The United States treasury has dumped $148 billion into Fannie Mae and Freddie Mac. Another New York Times story on October 21, 2010 reported in an article that although 90 percent of the losses of those two entities are behind them that the United States may have to pay an additional $19 billion over the next three years. 

It is obvious that this is a public policy issue since many millions of people throughout the world have been affected by these events.  It is no one single thing but a combination and sequence that created a “perfect storm” that overwhelmed financial institutions and is still affecting the globe.  Globalization has its merits for distributing wealth to poorer countries but seems to have detrimental effects when multinational corporations go beyond what is reasonable to profiteer.  How do we decide what is reasonable and who decides it is an enormous decision point? 

Trust is a key issue and when public policy is made by those politicians are elected to represent us but are bought by corporations then there is juxtaposition.  Public steps that can be taken are to have regulating bodies that have the true interest of the public in mind and that will set policies accordingly.  These regulating bodies or entities should be global in nature and will be very powerful which, is an issue that has to be addressed.  It will be impossible to have a convergence of opinion on how, what, where and who should be instated and set up these public policies yet having a mix of academics, economists, and nationalities among others would be a good mix with a balance of authority. 

The risks of setting up these public actions are that we become mired into inaction arguing all the details of getting it set up correctly and justly.  Then there is the risk of it being set up incorrectly or unbalanced so one faction or group has dominance, or worse yet that it in compromise that it becomes so weak and not have enough power to really affect and change anything for the better or worse.  The experimentation phase will lose lots of support from people expecting a comprehensive program from the beginning and not realizing that there will be changes and correction as it goes along and the best course of action is determined which can take many years.  As these policies are set up for public action and compromises are made there will be cases made that an individual’s civil liberties are being trampled.  The justifier for this is that individuals will have certain rights that must be sacrificed in order to promote the public good and for benefit of all.  A balance perspective must be maintained by all which will be no easy thing to accomplish. 

Conclusion so what happened was a coalescence of many things that just happened to come together and form the perfect economic storm.   Greed was the rocket fuel on the fire which took off as the proverbial throw toward it was being made.  There is no good news in this except for the fact that between regulations and lessons learned that this crisis or another that is similar may not happen again.  Yes, I said “may” since one never knows since greed is a powerful motivator and somehow in spite of all the good intentions, regulations and codes of ethic.  Business is business and there will always be some that take advantage or find legal loop holes or be creative and search for the ways to manipulate the system since the lure of profits is much too powerful a temptation to overcome.









Faber, David (2009). And then the roof caved in: how Wall Street’s greed and stupidity brought capitalism to its knees. Hoboken, NJ: John Wiley & Sons, Inc.


National Public Radio; August 27, 2010 How Wall Street Made The Mortgage Crisis Worse http://www.npr.org/blogs/money/2010/08/26/129454550/inside-the-sausage-factory-how-wall-street-made-the-financial-crisis-worse


New York Times; October 21, 2010 Fannie and Freddie May Need Infusion http://www.nytimes.com/2010/10/22/business/22fannie.html?_r=1


New York Times; October 19, 2010 BofA Posts $7.3 Billion Loss on One-Time Charge http://dealbook.blogs.nytimes.com/2010/10/19/bank-of-america-posts-7-3-billion-loss/







Mexican National Professionals


Working With or Within United States Culture
















David Alan Binder, Robert Fugett, Noe Gutierrez, and Jose Hinojosa




San Diego State University, Imperial Valley Campus











May 11, 2010



This research paper reviews two renowned cultural research models to aid in describing the cultural values and cultural societal practices – norms - of the countries of Mexico and United States (U.S.):  the GLOBE Study and Dr. Geert  Hofstede’s  model of cultural dimensions.  In this paper, first, there is a brief discussion of how culture introduces challenges in international business communications and how an understanding of intra-cultural communications is necessary to doing global business.  A compare and contrast of the GLOBE Study and Hofstede’s cultural model are presented and then used to describe cultural societal practices and cultural values of Mexico and the U.S.  Finally, presented are the findings from a student survey of  Mexican National professionals who work with or within the U.S. cultural environment of the Imperial Valley and Mexicali Valley on the U.S. / Mexico international border.   



This research paper is an investigation of the cultural normative behavior and values of the countries of Mexico and United States (U.S.) as defined using models of culture developed and defined by the GLOBE Study (House, 2004) and collective work of renowned Dutch sociologist Dr. Geert Hofstede and his model of cultural dimensions.

To start, the paper will present a summary explanation of the GLOBE Study and also the cultural model created by Dr. Geert Hofstede followed by a simple compare contrast of the two studies.  Then, the students Robert Fugett, David Binder, Jose Hinojosa, and Noe Gutierrez (Students) will present an interpretative model of the communication cycle with the intent to show the many challenges of an international communication.  The Students will then present societal practices and cultural values models that are general to Mexico and the United States (U.S.) based on the research from the GLOBE Study and Hofstede model of cultural dimensions.  The paper follows with a compare and contrast of Mexico and U.S. cultural models and how these cultures have elements of probable conflict, known as culture clash.  Finally, unique to this study, the Students present the findings of the Students survey which explores the perspective of Mexican National professionals (Mexican professional) who reside in the Imperial Valley and Mexicali Valley by exploring their level of job satisfaction working with and within U.S. culture on the international border.    Finally the paper will follow with the Student’s observations, findings and recommendations from lessons learned in the course of this research paper.

For purposes of the survey, a Mexican professional  is defined as someone who was born in Mexico, grew up in Mexican culture, has some education in Mexico and has a professional position; someone that is now interacting with U.S. culture by working in the U.S. or by working in Mexico but interacting frequently with U.S culture.  Further, the Mexican professional resides in Mexico or U.S., works in the U.S. or works with U.S. companies.  The survey is specifically limited to the Imperial Valley and Mexicali Valley region and its Mexican professionals as defined in this research project: i.e., Mexican professionals that work and live in the area.  This specific definition will have more meaning to the reader later in this paper.


Communication in a Cultural Perspective

“Culture is more often a source of conflict than of synergy. Cultural differences are a nuisance at best and often a disaster." - Dr. Geert Hofstede (http://www.cyborlink.com/besite/hofstede.htm)

If the Students have learned anything in the research for this paper, it is that conducting business in a global environment requires an understanding of a culture other than one’s own when doing business with someone from another country.  International business provides many opportunities around the world along with the challenges of communicating with someone who does not share your culture.  The other party to business may have grown up quite differently than you with their own set of ideals, morals and ethics – cultural values; and, behaviors and attitudes  – cultural norms or practices.  Culture can cause significant noise in a communication.  While language is a media to communicate, and competent language skills a plus in an international negotiation, the perceptual haze produced by culture norms and values can cloud a communication into a miscommunication.     

Even if both parties to an international business negotiation speak the same language, business professionals from different parts of the globe have unique backgrounds with perspectives and normative values – cultural values and societal practices - that are largely influenced by their native country, region and particular locality.  Without adequate knowledge, experience or preparation by both parties to an international business communication, culture clash, a situation which arises due to conflicting culture, has an opportunity to rear its ugly head and cause misunderstanding, miscommunication and a possible lost opportunity of a business deal.

The Students present Exhibit 1, located at the rear of the paper, as a visual to explain potential problems that culture brings into the communication process.  In any communication, the sender of a message encodes a message, uses a channel (a form of media such as speech, writing, a visual, body language, gesture, etc.,) and sends that message to the receiver who decodes the message filtered through their cultural perspective.  In an international business environment, language and culture become huge distortions, and challenges, to the communication process. An astute businessperson will prepare for an international communication by first understanding their own culture, discover their ethnocentricities, investigate their parochialisms and then study the culture of the other party to the business deal.  Going into a business communication with adequate information about the other party’s culture, and taking time to discover what is working in the communication and what is not working,  is prudent. 

So, how does one go about understanding the culture of another country, region or locality?  That is the interest of sociologists, the international business person and the subject of the rest of this paper. 


Models of Cultural Understanding

                There is a huge number of cultural studies and models of cultural dimensions by a diversity of researchers worldwide.  Each model of culture has something to offer in the study and interpretation of culture.  The study and understanding of culture is not black and white but multi-shades of gray with many layers; culture is dimensional.

  Two predominant research models of culture are found in the Culture Leadership, and Organizations, the GLOBE Study of 62 Cultures (House, 2004) and in the collective works on cultural dimensions by Dutch researcher and sociologist Dr. Geert Hofstede.   The research works of Hofstede and the GLOBE Study focus on national culture, culture clusters and the relationship thereof to international business, leadership and organizational behavior.  It is these two models that Students will utilize to define culture for this paper.


The GLOBE Study

                        “Culture is defined as shared motive, values, beliefs, identities, and interpretations or meanings of significant events that result from common experiences of member of collectives that are transmitted across generations…both the societal and organizational level…” (House, pp 15).


The GLOBE Study is a collaborative research project with data from 951 organizations in 62 countries that studies culture in nine dimensions:  Assertiveness, Gender Differentiation (Egalitarianism), Uncertainty Avoidance, Power Distance, Collectivism, Future Orientation, Performance Orientation, and Humane Orientation (see Student Exhibit 3 for a summary explanation).   The GLOBE Study had 14 primary contributing researchers and 170 plus investigators with a methodology utilizing survey questions with a one to seven scale on societal practices and cultural values (House, pp. 22).

The GLOBE Study is incredibly complex and is approached in a qualitative and quantitative framework.  From observation, a score of four on the seven questions survey is indicative of a neutral position by the survey respondent for most survey questions.  Societal practices are described in the GLOBE Study using the label of ”as is” which represents the way things are perceived to be in a unique culture.  The GLOBE Study also looked at cultural values described using the label of “should be” where the survey scores represent values that the culture perceives as the value norms of the culture.   Though the GLOBE Study uses the names of nations as the labels for unique cultures, the GLOBE Study also infers that there is no such thing as a specific national culture, an average culture, but a diversity of societies in proximity to one another, with unique practices and values; meaning, national borders come and go and are a geopolitical device of man. At a concept level, culture is found in a diversity of locations and one geographic area has a uniqueness not exactly replicated in another place, even if two locations are in immediate proximity.  Culture and societal clusters are locational.  This is a relevant point for the Students when interpreting their survey for this paper.

The GLOBE Study further informs that cultures with similarity are found in cultural societal clusters, each with subcultures.  The ten high level societal clusters are identified as: Anglo, Nordic Europe, Eastern Europe, Sub-Saharan Africa, Southern Asia, Latin Europe, Germanic Europe, Latin America, Middle East and Confucian Asia.  Societal clusters have many similar attributes such as climate, language, and religion.  In brief, the GLOBE Study is multi-facet and can best be appreciated by focused review; however, such an endeavor is beyond the scope of this paper.



Hofstede’s Cultural Dimensions

"Culture is the collective programming of the mind that distinguishes the members of one group or category of people from others" - Dr. Geert Hofstede

(Hofstede, http://www.ac.wwu.edu/~culture/hofstede.htm)

Dr. Geert Hofstede is a recurrent name in the world of cultural research.  His work on understanding the dynamics of culture and organizations is the subject of many critical studies and serves as a comparative work for other research on culture.  The GLOBE Study frequently cites his work to compare and contrast its research and findings.  Unlike the GLOBE Study, Hofstede’s work is not collaboration but largely due to his individual efforts and having the good fortune to discover in the 1970s, by accident, over 100,000 surveys from IBM employees from across the globe (Hofstede, Hofstede, http://www.ac.wwu.edu/~culture/hofstede.htm.) which he used to develop his first defining research on culture. 

The GLOBE Study model looks at culture in nine dimensions versus the five cultural dimensions of Hofstede’s cultural model.  Some of the labels are similar, such as Power Distance and Uncertainty Avoidance, but the definitions do not really mirror each other exactly.  The Student’s Exhibit 2 at the rear of the paper shows cultural attribute labels of the GLOBE Study that are similar to the cultural dimensions of Hofstede.  It can readily be seen that Collectivism in the Hofstede model is mirrored by Institutional Collectivism and In-Group Collectivism to some degree, and Masculinity is related to Assertiveness and Gender Egalitarianism. Similarly, Long Term Orientation becomes Future Orientation. The GLOBE Study model adds two dimensions of culture to its perspective of culture: Humane Orientation and Performance Orientation.    Additionally, the GLOBE Study adds “As Is,” –practices -and “Should Be” – values and belief system- to its model for a total of eighteen high level ways to interpret cultural dimensions.


A Comparison of Cultural Models

As an observation, the rule of seven (Miller, 1954) is a good gauge to use in looking at these models of culture.  Miller said that humans are only capable of keeping seven concepts, plus or minus two, in their minds.  Effectively, Hofstede’s cultural model has five dimensions of culture and the GLOBE Study has nine major dimensions of culture.  Each model has a diversity of concepts that underlie each label of the cultural model that have been qualitatively and quantitatively examined in exacting detail.   The two models of culture are similar, yet have perspectives unique to each, and have a slightly different approach to research.   See Student Exhibit 3 for a brief compare and comparison of definitions for the Hofstede model versus GLOBE Study model.


A Comparison of Mexico and U.S. Culture

All the foregoing leads to the presentation of Student EXHIBIT 4 in the rear of this paper.  The table and chart in EXHIBIT 4, constructed by the Students from raw scores in the GLOBE Study, indicate cultural values that U.S. and Mexican managers practice in their organization.  These values are “as is”, values as societal practices.   The survey scores were corrected for survey bias by the GLOBE Study researchers. Student EXHIBIT 5 shows a table and chart that are “should be” values.  The data is indicative of what Mexico and U.S. managers thought their values were at an idealistic level, a kind of national identity value statement.  As can be seen, there is some difference in the perceived “as is” practices to the “should be” values score; the practices do not match the ideals.

As a comparison to the GLOBE Study, the Hofstede Model for cultural dimension is shown in Student EXHBIT 6.  Hofstede’s model uses a scale of 1 to 100 versus the GLOBE Study Likert type scale of 1 to 7.

The following are observations about the cultural values and societal practices of Mexico and U.S. from simple observation of charts found in the Student EXHIBITS 4, 5 and 6 using the short definitions of both cultural models as found in EXHIBIT 3.  From the GLOBE Study it can be readily observed that societal practices and cultural values are often slightly out of synch; who we are as a culture and who we think we are as a culture are not the same.

1.       Mexico has a high score for Collectivism- in relationship to the U.S. that has a high score in Individualism.   Cohesiveness in organization or family has more significance to Mexico culture than U.S. culture. 

2.      Mexico has a high Power Distance score and the U.S. has a medium score.  There is more of an acceptance of hierarchical imbalance and inequality in Mexico than the U.S.

3.      Mexico has a high score in Uncertainty Avoidance and the U.S. has medium score for Uncertainty Avoidance.  Mexico has less tolerance for ambiguity and more reliance on rules and other societal frameworks.  

4.      Mexico has a high score for Masculinity and the U.S. has a slightly lower score in the medium range for the Masculinity cultural dimension.  Mexico is slightly more materialistic and assertive than U.S. Culture; however Mexico emphasizes quality of life over quantity of life.

5.      The U.S. has a low score for Long Term Orientation. Patience and thrift are not culturally valued.


Student Survey of Mexican Professionals Working in the Imperial and Mexicali Valleys

            The Students conducted a survey using a written questionnaire in face to face interviews and actively solicited surveys at the following entities in the Imperial Valley and Mexicali Valley: Imperial Irrigation District, the County of Imperial, San Diego State University, Imperial Valley Campus (SDSU, IVC), Centro de Enseñanza Técnica y Superior (CETYS), Universidad Autónoma de Baja California (UABC), and Instituto Tecnológico de Mexicali (ITM) in Mexicali, Mexico.   The survey consists of general questions about the survey respondent’s age, gender, country of residence nationality and cultural association; questions on respondent’s education and vocation; and, finally a list of statements that the respondent is asked to rate as to their level of agreement or disagreement with the statement.

The following are highlights of the survey found in Student EXHIBIT 10 unless otherwise indicated.

1.      Frequencies tables indicate the even if some respondents were born in Mexico, after a few years of working in the U.S., they consider themselves North American. Notice that 31% were not born in Mexico, but almost 37% consider themselves culturally American.

2.      When the respondents were asked if they were born in Mexico, if they consider themselves Mexican and if they consider themselves culturally Mexican, 69 percent said they were born in Mexico, 96 percent considered themselves Mexican but after some years of working or living in the U.S., only 61 percent of previous respondents consider themselves culturally Mexican.

3.      The Student survey of Mexican Professionals shows a statistical significance and strong association between the variables “level of proficiency in English” and the “type of vocation.”   It is also indicated that Mexicans professionals with the highest level of English skills are currently working in the administrative and management field (EXHIBIT 9).

4.      More than 55 percent of respondents have been living in the U.S. with their immediate family for longer than 16 years.

5.      When Mexican professionals were asked about their education by college major, 42 percent said they were in the engineering/science field; 27 percent were administration/management majors. 

6.      When respondents were asked what they were doing for a living, 37 percent said they were in administration/management and 34 percent were in the engineering/science field.

7.      When Mexican professionals were asked about their ability to speak, write and read English when they first came to the U.S., about 53 percent responded that they had good to excellent communication skills.  Alternatively, survey results asking respondents about their current level of communication skills shows a significant improvement (from 53 percent to 87 percent) of communication skills once the Mexican professional started working and or living in the U.S.

8.      About 48 percent of the respondents answered that they did not feel any discriminatory treatment because of their cultural background, and about 14 percent felt minimum differentiation in their treatment because of cultural background.

9.      About 35 percent considered themselves underemployed to some degree; 65 percent of the respondents feel they are satisfied with their level of employment.

10.  When the respondents were asked if they have a good boss, about 71 percent answered positively. This leads to believe that Mexican professionals in general do not have a problem adapting to different (multicultural) management styles or the lack of cultural clash is due to the blended cultures of the Imperial and Mexicali Valleys.

11.  The frequency distribution representing the preference of Mexican professionals to work for a Mexican manager (13%) shows that only a minority of Mexican professionals would prefer to work for a Mexican manager.

12.  When the Mexican professionals were asked if they would like to retire in the company where they were currently working, 79 % said they would like to retire in their current company (uncertainty avoidance). Only a small percentage (21%) disagreed.

13.  When the Mexican professionals were asked about their level of comfort working with American professionals, almost 94 percent said they felt comfortable. This indicates that Mexican professionals have adapted to U.S. culture or that Mexican and U.S. culture have blended so that culture clash is not overt.  Only a small percentage of respondents (6%) were neutral.

14.  Almost 85 percent of Mexican professionals responded that they have experienced a satisfying level of acceptance or recognition as a professional in their current position.

15.  Two thirds of the respondents considered that both male and females have a greater opportunity of professional development in the U.S. than in Mexico.

16.  Two thirds of the respondents considered that they have more control of their professional status and development in the U.S.

17.  Close to 87 percent of the responding Mexican professionals reported that they are being given the ability to make decisions and be responsible for their work.



Findings and Lessons Learned

The level of excitement by Mexican Professionals participating in the survey is an interesting phenomenon.  Many of the participants wanted to receive feedback of the outcome or to receive a copy of the final paper. The following are observations found out in the course of researching the paper.

1.      The Students expected to see some cultural clash or other rejection of U.S. culture as demonstrated by negative responses in the survey.

2.      The Students expected this paper to have a different set of results than what was discovered in the survey.  The level of job satisfaction by participants is very high with 93 percent stating they were happy working in the U.S.  This is also assumed to be a reflection of a local blended Mexican and U.S. culture as found on the international border.  This will require more investigation.

3.      The survey needed to have a bigger sample size to improve its value for discovery and achieve statistical levels of significance.

4.      Cultural values, the ideals and belief system of a culture, and cultural practices, the behaviors and norms of culture, did not seem to match up well.  The value system as quantified was not a great indicator of cultural practices. 


In conclusion, the Students posit that culture as practiced or idealized is heavily influenced by the particular norms and values of locality.  When two cultures are in close proximity and blended the way the Imperial Valley and Mexicali Valley cultures are due to locality, then the local culture takes on a different flavor than the surrounding majority national cultures of Mexico and the U.S.  As shown in the cultural models of the Hofstede and GLOBE Study, Culture can be found in global cluster cultures, national cultures and regional cultures. Culture appears to be influenced by location.






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