Sample Essay
The Northern Rock Crisis Case study depicts that the crisis faced by the company was caused by the business model of the company and the way it was operated which increased its risk to the failing global mortgage markets. The company used a highly risky business model whereby the company used to lend the mortgages in the market by financing them in majority from loans while a small percentage were financed form the company savings in the bank (‘Northern Rock Crisis – Case study’).
As a result when the money lenders sought to retract their money from the company, the company saw a shortfall of liquid cash for business operations which made the company vulnerable to the risks of operating in a business sector facing already recessionary pressures in theUnited States.
The role of the organizational culture is of significant importance when dealing with the organization crisis the likes of Northern Rock Crisis. The organizational culture can determine the success and the failure of the crisis management initiatives used to mitigate (Wise, 2003).
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