The Death Spiral

I did some quick googling and there doesn't seem to be a defined business management principle but there is a book on Amazon so I know my thinking is in-line with at least one guy. The Death Spiral comes to mind when as a business you're so far down a path and convinced in your approach that you ignore signs of trouble and can't get you out of the spiral.
An inexperienced or incompetent pilot may be scared by the situation and might not check the indicating instruments in the aircraft or may actually assume them to be malfunctioning because the sense impression of straight and level flight is so strong. the impression given by the senses in that situation would be level but descending flight. This impression usually leads to the pilot "pulling up" or attempting to climb by pulling back on the controls. In a banking turn however the plane is at an angle and will be describing a large circle in the sky. Pulling back on the controls has the effect of making that circle smaller and causing the plane to descend as part of the lift being generated by the wings is directed sideways. Only when the turning circle gets very small will the passengers notice the unusual sensations. At that point the aircraft is describing a descending circle or spiral. Unable to correlate the conflicting sensory mis-impressions the pilot may become afflicted by a temporary case of vertigo during which the pilots mind and body are unable to judge their position.
This can occur due to a variety of reasons. In a business sense, pulling up and making course corrections will not get you back to where you need to go so you either need to hit bottom or take your medicine before re-orienting your course.

A recent example may be Yahoo - I'm sure there are many others. If you are a company in a competitive market and most Rx/Dx markets are competitive, it's not a place you want to find yourself.

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