In a time of subprime loan financial crisis, where are the leaders?

In light of the financial crisis caused by subprime loans, it may be easy to point fingers to the people who issued the loans; however, it could also be said they were just doing their job. A person can comply with rules and regulations without regard to ethics. Thus, just because a person is approved for a loan does not mean it should have been issued to them. Furthermore, issuing a loan to someone who is ineligible may seem harmless, but the facts have proven otherwise. Therefore, it would have caused less harm to deny a loan to one person, than to approve it and allow most of the world to face financial crisis (Gilbert, 2011).

What was absent from this crisis was leadership. Leadership has to come from the top and within. If leaders were involved, they could have prevented the crisis. One method is using sensemaking models as ethical decision-making strategies that map out ethical dilemmas so a leader knows how to take action. The model includes managing emotional responses that are normal, but could hinder action. Another part is self-reflections. Leaders should consider their past experiences when trying to solve a current issues. As part of the model, leaders also need to consider the actions that could happen in the future as a result of their decisions. This is known as forecasting. Finally, leaders should continue to review these steps and add them to an imaginary toolbox, otherwise known as information integration (Thiel, Bagdasarov, Harkrider, Johnson & Mumford, 2012).

Policymaking is important, especially for providing guidance to a large number of people. However, policymakers tend to be far removed from the problem. In addition to leadership, training should be provided on making every citizen a leader, especially since they make the decisions at the lowest levels. People will perform the way they are trained. Citizens who are trained will have a better understanding of the repercussions of their actions, not just on themselves, but society as a whole. They are also able to adapt or change policies set forth when need. An army of educated citizens can create more change than one policymaker at the top (Steiner, Risopoulos & Mulej, 2015).



Gilbert, J. (2011). Moral Duties in Business and Their Societal Impacts: The Case of the Subprime Lending Mess. Business and Society Review 116(1). 87-107. Retrieved from

Steiner, G., Risopoulos, F., & Mulej, M. (2015). Social Responsibility and Citizen-Driven Innovation in Sustainably Mastering Global Socio-Economic Crises. Systems Research and Behavioral Science Systems Research 32. 160-167. DOI: 10.1002/sres.2255

Thiel, C. E., Bagdasarov, Z., Harkrider, L., Johnson, J. F., & Mumford, M. D. (2012). Leader Ethical Decision-Making in Organizations: Strategies for Sensemaking. Journal of Business Ethics 107. 49-64. DOI: 10.1007/s10551-012-1299-1



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