Loose Coupling: A Disadvantage

In Ch 2, the authors asked, “What are the advantages and disadvantages for organizational sub-units being tightly versus loosely coupled?” This question immediately made me think of the ongoing mortgage crisis we are experiencing today, which can portray a disadvantage of sub-units of an organization (metaphorically) being loosely coupled. Looking at in from a systems theory view, in the big picture the government and lending institutions formed a loosely coupled organization. The loose coupling comes from the minimal regulation by the gov’t on various lending institutions, or even by regulation of lending institutions on themselves. Somewhere in between, underneath, or above (depending how you look at it), the common American homeowner exists somewhere within that organization. For our society (or organization, if you will), this loose coupling served as a disadvantage, so we are now experiencing a randomness and disorder (entropy) as we try to find our way to equilibrium. I’m not an economist or mortgage expert, but from watching the news and hearing tid bits here and there, with respect to Chapter 2 of our studies, we are experiencing a change in lending and borrowing processes. Not only is this effecting our society as a whole (organization), but also the many sub-organizations within (take for example the gov’t stepping in to save Fannie and Freddie, or the recent collapse of Lehman Bros).