In his speech at the Tipping Points Annual Event on 3rd July 2012 Professor Eric Abrahamson of the Columbia Business School talks about the many different ways in which blame is apportioned in the aftermath of catastrophic tipping point events such as the Global Financial Crisis. The research builds on the rich literature on theories of status, theories of reputation, Attribution theory, scapegoating theory and the literature on whistle-blowers and hero CEOs.
Professor Abrahamson points out that the main forms of what he calls “blame-gaming” are vertical, horizontal, diagonal and oblique blame-gaming. These groups encompass a wide variety of actors that are associated with the catastrophic event in one way or another e.g. the firm/corporation itself, the superior officers within it, subordinates, individual rogue traders, regulators, the press and even Business Schools. Also falling within the four main forms of blame-gaming are non-human objects of blame e.g. greed, corporate culture, herd behaviour, financial services, the financial system, etc.
Professor Abrahamson explains the concepts of scapegoats, sacrificial lambs, turncoats and whistleblowers. He uses Albert Hirschman’s interesting and intellectually powerful schemata of Exit, Loyalty and Voice to describe the relationship between a corporation at the centre of a crisis and the members of the corporation who could be cast as scapegoats, sacrificial lambs, turncoats or whistleblowers [in the blame apportioning game]. He applies this theoretical framework to some recent scandals in banking and he shows interesting differences in the roles played by current or former employees in these recent banking scandals. While Jerome Kerviel (of French bank Societe Generale) was made a scapegoat by his former employers and cast as the only bad egg within the company, Fabrice Tourre of Goldman Sachs appears to be more of a sacrificial lamb blamed in public but supported by Goldman Sachs financially. Greg Smith can be cast as a turncoat or whistleblower blaming a concept [not a particular person] i.e. the culture of greed and disrespect for clients that he claims exists at his former employers, Goldman Sachs. Then there’s Robert Wilmers (the CEO of M & T Bank, a bank viewed by many as a good bank) who can be viewed as an industry turncoat because of his criticisms of unsavoury practices at other banks.
Still using the financial crisis as a case-study Professor Abrahamson makes some other interesting observations. He outlines a hierarchy of acclaim where responsibility for the outcome of an event (in this case, success) is eagerly accepted by those at the top of the organization. He then contrasts this with a crisis event and observes that in such a situation the hierarchy turns into a hierarchy of blame where responsibility for the outcome (in this case, failure) is firmly rejected by those at the top and is diverted to those lower down in the organization.
On a more serious level, Professor Abrahamson’s work is very important because it attempts to tackle some huge questions about blame apportionment in a Tipping Point society. He tries, for example, to address crucial questions such as: what predicts the level at which blame analysis is made? At what point does a blame game get going? What (or who) wins in these blame games? Why do they win? What are the consequences for the winners and losers in these blame games?
An important point Professor Abrahamson is keen to make (and which I wholly agree with) is that attributing blame to the weak or to ‘abstractions’ such as “the system” or “herding” is highly problematic. This is because it hampers our ability to learn genuine lessons from past crisis events and therefore does not enhance our ability to prevent or endure future crisis events. It is much better to focus on finding the human agent that is responsible or liable for the problem.