Scapegoating As an Organizational Escape from Crisis: a Case Study of Merrill Lynch

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Scapegoating As an Organizational Escape from Crisis: a Case Study of Merrill Lynch Western Michigan University ScholarWorks at WMU Master's Theses Graduate College 8-2004 Scapegoating as an Organizational Escape from Crisis: A Case Study of Merrill Lynch Jennifer D. Brown Follow this and additional works at: https://scholarworks.wmich.edu/masters_theses Part of the Communication Commons Recommended Citation Brown, Jennifer D., "Scapegoating as an Organizational Escape from Crisis: A Case Study of Merrill Lynch" (2004). Master's Theses. 3988. https://scholarworks.wmich.edu/masters_theses/3988 This Masters Thesis-Open Access is brought to you for free and open access by the Graduate College at ScholarWorks at WMU. It has been accepted for inclusion in Master's Theses by an authorized administrator of ScholarWorks at WMU. For more information, please contact [email protected]. SCAPEGOATING AS AN ORGANIZATIONAL ESCAPE FROM CRISIS: A CASE STUDY OF MERRILL LYNCH by Jennifer D. Brown A Thesis Submitted to the Faculty of The Graduate College in partial fulfillment of the requirements for the Degree of Master of Arts Department of Communication Western Michigan University Kalamazoo, Michigan August 2004 ACKNOWLEDGMENTS It is with great pleasure that I write this page, because without each of these people in my life I would have never been able to complete my degree and fulfill my dreams. First to my esteemed advisor, Dr. Keith Hearit, thank you for the imprints you have left on my life over the past two years. Your amazing guidance, faith, and encouragement have helped me to make my work better, for that I am extremely grateful. Thank you for all of the hours you devoted to my thesis and I, both the knowledge and opportunities that you have provided me with will never be forgotten. To my committee, Sue Ellen and Dr. Propp, thank you for taking the time out of your busy schedules to serve on this thesis committee. Your time and energy were greatly appreciated; without your advice, direction, and support I could not have completed my thesis successfully. To my fellow graduate students, who know the frustrations that come with graduate school, thank you for providing me with such amazing support; each of you were always there during the rough times, and not to forget, all the fun. I do not know what I would have done if it was not for those weekly outings, thank you for being such wonderful friends. Last of all I would like to acknowledge my family, thank you Chris, Mindy, Sheryl, and little Emma too. Thank you for always understanding and being there for me, your support and faith has meant the world to me. To my parents, ii Acknowledgments- Continued youbothalwayssaidrootsandwings. Iwantedtothankyouforhelpingto createsuchstrongrootsthatallowedmetosoar. Withoutbothofyounoneof mydreamswouldhaveevercometrue. Tomymom,I especiallywanttothankyouforalwaysbeingtheretojust listenthroughoutmyrollercoasterride,whetherIwasfrustratedorthrilled. Ialso wantedtothankyouforbeingmyparnerontheride. Iknowyoualwaysdidnot havetheanswer, butjusthearingyourvoiceoftentimesgavemethe encouragementtomakethenextstep. Lastbutnotleast,tomydad,thankyoufornaggingme. IneverthoughtI wouldhearmyselfadmitthat,butinthiscaseIappreciatedit. YouknewIhada dreamanditwasyourgoaltonagmeuntilIcompletedit, Iwillneverforgetit. I alsowantyoutoknowhowmuchIappreciateeverythingthatyouhavedonefor me,especiallyjustbeingtheretolistenwhenneedbe. Youareanamazingman withanextremeamountofdetermination,adeterminationthathasshownme that IcandoanythingaslongasIputmymindtoit. IwantyoutoknowthatI findmyselfextremelyluckytohaveyouinmylifeandevenluckiertohaveyouas myfather. Thisculminationofmydegree,mythesis,isdedicatedtoeachofyou. Ifit wasnotforallofyourfriendships,guidance,andfaithImayhavenever, madeit towhereIamtoday. THANKYOU! JenniferD. Brown iii Copyright by Jennifer D. Brown 2004 SCAPEGOATINGASANORGANIZATIONALESCAPEFROMCRISIS: ACASESTUDYOFMERRILLLYNCH JenniferD.Brown,M.A. WesternMichiganUniversity,2004 Thisthesisexaminestheuseofscapegoatingasacommunication strategybyMerrillLynchduringthe2000's. Usingarhetoricalmethod,it exploresthenatureofcrisesandtheimagerestorationattemptbycorporations. Finally,itdrawsanumberofconclusionsabouthoworganizationsshould respondtocrisescommunicativelyandethically. TABLE OF CONTENTS ACKNOWLEDGMENTS................................................ .......................... ii CHAPTER I. INTRODUCTION ........................................................................1 Crisis ...............................................................................3 Crisis Communication ...........................................................3 Scapegoating .....................................................................4 Case History ......................................................................4 Merrll Lynch .............................................................. 5 Conclusion of Merri Lynch Case Histor....... ..................10 Conclusion .......................................................................11 II. LITERATURE REVIEW ...............................................................12 Crisis Management ............................................................12 Definitions of a Crisis..................... .............................13 Management of a Crisis ......................................................16 Costs and Benefits of a Crisis ......................................18 Stages of a Crisis ...............................................................19 Crisis Communication Management ......................................21 Corporate Image.... ................................. ......................22 Corporate Image Repair........................... ..................23 iv Table of Contents - Continued CHAPTER Communication Strategies .......................................... 23 Scapegoating......................................................... ........... 27 Research Questions.......................................... ................. 31 Thesis Overiew.................................... ................... 32 Conclusion and Organization............................... ................. 32 Ill. RHETORICAL METHODOLOGY ................................................... 33 Overview of Rhetorical Analysis.............................. .............. 33 Rhetorical Characteristics.................................... ................34 Rhetorical Criticism ............................................................. 38 Methodological Criticism ......................................................41 Generic Method .................................................................42 Generic Descrtion... ................................................ 44 Generic Paricipation... ............................................... 45 Generc Application... ................................................ .45 Generic Analysis of the Merrill Lynch Case............ .................. 46 Conclusion......................................................... ............... 4 7 IV. ANALYSIS................................................................... .............. 48 Generic Criticism of Merrill Lynch ..........................................48 Apologetic Crisis Genre... .......................................... .49 V Table of Content- Continued CHAPTER Fink's Stages of a Crisis and Merrill Lynch.................. ............. 54 Prodromal Stage............ ...........................................55 Acute Stage .............................................................55 Chronic Stage ..........................................................56 Crisis Resolution Stage .............................................. 56 Merrill Lynch's Communication Strategies ............................... 57 Non-Existence Strategy ..............................................58 Ingratiation. Strategy................................. ..................59 Mortification Strategy.............................. ...................60 Distance Strategy ...................................................... 63 Scapegoating Strategy.............. ..................................64 Organization and Conclusion ................................................ 69 V. CONCLUSION .......................................................................70 Merrill Lynch's Communication Strategies ...............................71 Scapegoating as a Response Strategy............. ......................72 Conclusion ........................................................................ 80 BIBLIOGRAPHY............... ................................................................... 81 vi ScapegoatinganOrganizationalEscape 1 CHAPTERI INTRODUCTION Iamsotiredofgettingthesethings. Canwepleaseresetthis stupidpricetargetandripthispieceofjunkofwhateverlistit'son. Ifyouhavetodowngradeit,downgradeit. Soembarrassing. HenryBlodget(Cohen,2002,p.4-7) In2002,regulatorsaccusedtheWallStreetbrokeragehouse, Merrill Lynch,ofwrongdoingbecauseitprovidedinflatedstockratingsinorderto maintainitsimportantinvestmentbankingclients. Theabovecommentwas addressedtoacolleaguebyHenryBlodget, Merrill Lynch'sheadinternetand technologyanalyst,inregardtothestockpurchaseratingsatMerrillLynch. Suchastatementisanexampleofhownormalremarksbyanemployee canprecipitateanorganization'sdownfall. ThisremarkwasusedagainstMerrill LynchbyEliotSpitzer,NewYorkStateAttorneyGeneral, ina10-month investigationofthecorporation. MerrillLynchthenplacedtheblameupona seriesofindividualemployeeswithintheorganizationaferthewrongdoing becamepublic.Inthiscase,oneofthepeopleMerrillLynchtargetedwasHenry
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