POWERPOINT CONSOLIDATE

dsh8428

groupthink_economicdisaster_1.pptx

Home >Business & Finance homework help >Management homework help >POWERPOINT CONSOLIDATE

Disaster in Housing & Lending Practices

2008 – The United States experiences one of the worst economic disasters in history (WordPress, 2016).

Stocks fall & Banks fail

Houses Foreclose

Families lose their homes and are forced to relocate.

Fig. 1

Why did this happen?

Years of speculation, loose lending practices & risky trading.

Groups of people made poor decisions and believed faulty information.

Unprecedented levels of leveraging were rationalized in light of soaring stock prices and wide profit margins (WordPress, 2016).

Fig. 2

Market Failure

According to labor representative, Stan Sorscher (2011), “In the housing crisis, group-think was pervasive, affecting rating agencies, regulators, legislators, lenders, borrowers, mortgage brokers, pundits, thousands of handsomely-paid securities dealers, and most of the economics profession”

Fig. 3

Social Pressures of Group Think

STEROTYPING

Economists, accountants and regulators who expressed concerns about the situation were effectively threatened, marginalized or ignored. (WordPress, 2016)

Illusion of Invulnerability

Wall Street CEO’s believed their companies were too big & profitable to fail.

Fig. 4

Fig. 5

Fig. 6

References

WordPress Theme by MH Themes. (2016). Groupthink. Communication Studies. Retrieved March, 2016 from http:// www.communicationstudies.com/communication-theories/groupthink

Sorscher, S. (May 25, 2011). Groupthink Caused the Market to Fail. Huff Post Business. Retrieved March, 2016 from http:// www.huffingtonpost.com/stan-sorscher/group-think-caused-the-ma_b_604810.html

Google images. (2016). Fig. 1. [Graphic]. Retrieved from http:// www.gulfaccesshomes.com/BuyingForeclosures/REO's

Google images. (2016). Fig. 2. [Graphic]. Retrieved from http:// www.123rf.com/photo_5096639_nuclear-explosion.html

Google images. (2016). Fig. 3. [Graphic]. Retrieved from http:// www.huffingtonpost.com/stan-sorscher/group-think-caused-the-ma_b_604810.html

Google images. (2016). Fig. 4. [Graphic]. Retrieved from http:// www.activevegetarian.com/used-love-bacon-dealing-social-pressure

Google images. (2016). Fig. 5. [Graphic]. Retrieved from http:// www.alamy.com/stock-photo/invulnerability.html

Google images. (2016). Fig. 6. [Graphic]. Retrieved from http://leadershiparchways.com/2014/12/01/guidelines-for-avoiding-groupthink /