Nav: Home

Over-sensationalized scandal can actually be a job saver for strong performing leader

August 07, 2019

Scandal gone viral has toppled many a leader, and new research shows it may have saved some too.

News and social media seem to thrive on sensationalizing scandal, and prominent CEOs, politicians, world leaders and sports stars often are forced to step down as a result. However, a new study from the University of Notre Dame introduces the role of the "severity gap," showing that when media or public perceptions of a scandal outpace its actual severity, strong-performing leaders are more likely to keep their jobs.

"How the severity gap influences the effect of top actor performance on outcomes following a violation" is forthcoming in the Strategic Management Journal from John Busenbark, assistant professor of management in Notre Dame's Mendoza College of Business.

Busenbark, along with co-authors Nathan Marshall, University of Colorado; Brian Miller, Indiana University; and Michael Pfarrer, University of Georgia, studied the performance, dismissal and labor market outcomes of NCAA Division I football and basketball head coaches in the wake of NCAA violations. They used rigorous and multiple econometric techniques to test ideas and reinforce findings.

"Our central finding is that organizations are less likely to dismiss stronger-performing leaders when there is a high severity gap, and this is because internal stakeholders want to protect their organization and its central figures from what they perceive as undue scrutiny," Busenbark says. "Weaker-performing leaders, however, are apt to get dismissed following a scandal with a larger severity gap. We argue this is because the excess drama from a large severity gap provides insiders with a perfect opportunity to scapegoat leaders they do not perceive as integral to the organization."

As it relates to the corporate world, the research is the first to demonstrate that there is often a disconnect between the perceived and actual severity of a scandal. Conventional logic would suggest that strong-performing managers would likely get dismissed after a negatively perceived event because insiders, whether other managers or a board of directors, want to distance themselves from a high-profile manager disliked by outsiders. However, the study reveals the opposite.

For instance, Rick Smith -- the CEO of Equifax from 2005 until 2017, whom many perceived as a strong performer -- was dismissed following an egregious data leakage scandal that received a commensurate amount of social scrutiny (what Busenbark and colleagues consider no severity gap). In contrast, Oscar Munoz -- the CEO of United Airlines who was appointed in 2015 and is also perceived as a strong performer -- retained his position after a high severity gap violation in which United Airlines was excoriated by conventional and social media following an airport's forcible removal of a single passenger from a United Airlines flight. These examples, as well as countless others, underscore the importance of the degree to which perceived scrutiny outstrips actual violation severity in determining whether strong-performing top actors are dismissed following a negative event.

John Schnatter, considered a weaker-performing CEO, was fired from Papa John's last year following a high severity gap violation. Busenbark says the company was on the decline when he was dismissed following some relatively innocuous comments that received a great deal of media backlash.

The research has broader implications for society and politics.

"In our current political climate, it is often difficult to find any parallel between the actual severity of a political transgression and the extent to which it resonates with conventional and social media," Busenbark says. "If media outlets and broader society on social media continually run with and sensationalize stories about politicians that are not actually that damaging, we theorize and find that Republicans and Democrats will circle around their political leaders and protect them to an even greater degree in the event that a more legitimate scandal emerges in the future." Much like when United Airlines encountered a large severity gap, politicians are often "raked over the coals" for relatively innocuous transgressions, while legitimate controversies sometimes never manifest in the public eye.

The study also finds that strong-performing leaders who are dismissed from their organizations after a scandal are more likely to secure at least an equivalent position elsewhere. However, top leaders do not secure equivalent or better employment elsewhere if dismissed after a high severity gap scandal, likely because outsiders prefer not to be associated with them.
-end-


University of Notre Dame

Related Science Articles:

75 science societies urge the education department to base Title IX sexual harassment regulations on evidence and science
The American Educational Research Association (AERA) and the American Association for the Advancement of Science (AAAS) today led 75 scientific societies in submitting comments on the US Department of Education's proposed changes to Title IX regulations.
Science/Science Careers' survey ranks top biotech, biopharma, and pharma employers
The Science and Science Careers' 2018 annual Top Employers Survey polled employees in the biotechnology, biopharmaceutical, pharmaceutical, and related industries to determine the 20 best employers in these industries as well as their driving characteristics.
Science in the palm of your hand: How citizen science transforms passive learners
Citizen science projects can engage even children who previously were not interested in science.
Applied science may yield more translational research publications than basic science
While translational research can happen at any stage of the research process, a recent investigation of behavioral and social science research awards granted by the NIH between 2008 and 2014 revealed that applied science yielded a higher volume of translational research publications than basic science, according to a study published May 9, 2018 in the open-access journal PLOS ONE by Xueying Han from the Science and Technology Policy Institute, USA, and colleagues.
Prominent academics, including Salk's Thomas Albright, call for more science in forensic science
Six scientists who recently served on the National Commission on Forensic Science are calling on the scientific community at large to advocate for increased research and financial support of forensic science as well as the introduction of empirical testing requirements to ensure the validity of outcomes.
World Science Forum 2017 Jordan issues Science for Peace Declaration
On behalf of the coordinating organizations responsible for delivering the World Science Forum Jordan, the concluding Science for Peace Declaration issued at the Dead Sea represents a global call for action to science and society to build a future that promises greater equality, security and opportunity for all, and in which science plays an increasingly prominent role as an enabler of fair and sustainable development.
PETA science group promotes animal-free science at society of toxicology conference
The PETA International Science Consortium Ltd. is presenting two posters on animal-free methods for testing inhalation toxicity at the 56th annual Society of Toxicology (SOT) meeting March 12 to 16, 2017, in Baltimore, Maryland.
Citizen Science in the Digital Age: Rhetoric, Science and Public Engagement
James Wynn's timely investigation highlights scientific studies grounded in publicly gathered data and probes the rhetoric these studies employ.
Science/Science Careers' survey ranks top biotech, pharma, and biopharma employers
The Science and Science Careers' 2016 annual Top Employers Survey polled employees in the biotechnology, biopharmaceutical, pharmaceutical, and related industries to determine the 20 best employers in these industries as well as their driving characteristics.
Three natural science professors win TJ Park Science Fellowship
Professor Jung-Min Kee (Department of Chemistry, UNIST), Professor Kyudong Choi (Department of Mathematical Sciences, UNIST), and Professor Kwanpyo Kim (Department of Physics, UNIST) are the recipients of the Cheong-Am (TJ Park) Science Fellowship of the year 2016.
More Science News and Science Current Events

Trending Science News

Current Coronavirus (COVID-19) News

Top Science Podcasts

We have hand picked the top science podcasts of 2020.
Now Playing: TED Radio Hour

Uncharted
There's so much we've yet to explore–from outer space to the deep ocean to our own brains. This hour, Manoush goes on a journey through those uncharted places, led by TED Science Curator David Biello.
Now Playing: Science for the People

#556 The Power of Friendship
It's 2020 and times are tough. Maybe some of us are learning about social distancing the hard way. Maybe we just are all a little anxious. No matter what, we could probably use a friend. But what is a friend, exactly? And why do we need them so much? This week host Bethany Brookshire speaks with Lydia Denworth, author of the new book "Friendship: The Evolution, Biology, and Extraordinary Power of Life's Fundamental Bond". This episode is hosted by Bethany Brookshire, science writer from Science News.
Now Playing: Radiolab

Dispatch 2: Every Day is Ignaz Semmelweis Day
It began with a tweet: "EVERY DAY IS IGNAZ SEMMELWEIS DAY." Carl Zimmer – tweet author, acclaimed science writer and friend of the show – tells the story of a mysterious, deadly illness that struck 19th century Vienna, and the ill-fated hero who uncovered its cure ... and gave us our best weapon (so far) against the current global pandemic. This episode was reported and produced with help from Bethel Habte and Latif Nasser. Support Radiolab today at Radiolab.org/donate.