Sample Essay

Financial crisis is usually regarded as a financial mishap in which organizations and the entire industries suffer in the short and the long run. It is usually applied in certain situations when the institutions those are in the market lose hefty amount of their market share. The government actually plays an important role in these financial crises and Japan was appearing to be an economic powerhouse who was actually destined to capture the international finance and trade but their growth was affected by these financial crises (Liou 2002).  The financial crises are associated usually with the panic created in the banking industry and then recession disrupts the entire situation. There are certain other financial crises and these financial crises are known as financial bubbles, stock market crashes and sovereign defaults. There are different theories that actually depict that how these financial crises develop and how can they be protected in both the short and the long run. There are different theories and types of financial crisis that directly related to the organizational decision making and these types and theories are given below:

Marxist theories

Jean Charles Leonard de Sismondi (1773-1842) studied the major depressions in the world economy and he actually studied the theory that was behind these crises. The entire theory revolved around the scenario of equilibrium between supply and demand (Marx, Fernbach, & Mandel 1993). The scholars discussed the world economic crisis in detail and the researchers stressed that industrial nations at that time will suffer from recessions because of the oil crisis which actually began in the year 1973.

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