The Lennar Corporation's Largest Homebuilders And A Provider Of Financial Services
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“By early 2009, Lennar Corporation was one of the nation’s largest homebuilders and a provider of financial services” (Rankine, G., 2009, pg. 13-2). The Lennar Corporation was successful in many areas of the homebuilding operations including; purchasing, development and financial services operating in 14 states throughout the U.S. The company developed a centralized corporate level management team that was highly experienced in the homebuilding industry. This management team was responsible and handled all important decisions the company made. The Lennar Company continued to grow and flourish and subcontractors were hired “for site improvements and virtually all of the work involved in the construction of homes” (Rankine, G., 2009, pg.…show more content… These entities helped the company to reduce a share risk by limiting disposable expenses, allowing the company to “participate in a strategic ventured” (Rankine, G., 2009, pg. 13-6). Joint ventures allowed the company to enter into markets that without a strategic partner would not have been accessible. Joint ventures also expanded the financial situation for the Lennar Company “to combine its homebuilding expertise with access to it partners’ capital” (Rankine, G., 2009, 13-6).
Joint ventures are accompanied by sharing arrangements “that enable parties to collaborate for mutual gain that would not otherwise be available from working align” (Rankine, G., 2009, pg. 13-7. This allowed the Lennar Company to venture and expand business in develop and financial areas that may have not been accessible. During the 2008 recession in the U.S. the residential homebuilding industry competition became fierce. The Lennar Company participated in this industry along with combining efforts of other homebuilders for desirable properties to dominate the market.
The Lennar Company soon found itself in the midst of the deep global recession that included a major credit crisis, housing collapse and mortgage defaults resulting from the unemployment rate in the U.S. Not only was the Lennar Company affected by the circumstances, but as the same time the company faced criticism from the Fraud Discover Institute (FDI). Barry Minkow was