The Role of Scapegoating in Corporate Decision-Making

Corporate decision-making can be a complex and often fraught process. One of the more controversial practices employed by boards of directors is the scapegoating of employees when things go wrong. This article explores the reasons behind this practice and presents some of the most common scenarios that lead to such a situation.

Is Scapegoating Ever Justified?

Rob Finnick, a renowned expert in corporate governance, has often highlighted the issue of employees being unfairly scapegoated for poor decisions made by the board. He points out that these situations often arise from one of two reasons:

Being a scapegoat for bad board decisions: Sometimes, boards make decisions that prove disastrous, and someone must bear the brunt of the blame. The employee who directly failed to implement the board's decisions might be chosen as the scapegoat. Being a scapegoat for poor results due to a bad economy: Economic downturns can also lead to poor performance, and here again, the innocent employee might be singled out to shoulder the blame. The board made a mistake and promoted the wrong person: A board might initially make a costly error by promoting someone based on the wrong criteria, leading to the need to find a scapegoat later.

How Scapegoating is Announced

Typically, when a decision to scapegoat an employee is made, it is announced in a manner that seeks to soften the blow. For instance, a press release or an internal memo might state something along the lines of:

"We have taken significant steps to address the gap in our team's performance and are placing responsibility in one of our key positions. This is part of our ongoing efforts to improve and refine our strategies."

Common Scenarios Leading to Scapegoating

There are numerous reasons why employees might be scapegoated, and some of these include:

Right for the previous stage of the company, not right for the next stage: Employees who were a perfect fit for the company in its early stages may no longer be suitable as the organization grows and evolves. Violation of employee contract: This can happen when employees breach their employment agreement, leading to their dismissal and potential scapegoating. Relationship issues with someone on their team: Personal and professional conflicts can escalate, and one party might be unfairly blamed. Missing sales quota, shipping bad product, or no product at all: Performance issues, such as failing to meet sales targets or delivering subpar products, can lead to scapegoating. Too task-focused, not enough on strategy: Overemphasis on day-to-day tasks at the expense of long-term strategic planning can lead to poor performance and subsequently, scapegoating. Building out a weak team that can't scale fast enough: The failure to develop a team capable of scaling with the company can be attributed to an individual's shortcomings. Too political, favoritism, blocking other teams: A culture of favoritism and political maneuvering can create an atmosphere where individuals are unfairly blamed for any missteps.

Why Scapegoating is Widespread

While the practice of scapegoating may seem unfair, it is not uncommon, especially in organizations where accountability is highly valued. This is often enabled by HR departments, which cover up the reality with a more positive narrative. There are several reasons for this:

Legal reasons: Protecting the organization from legal liabilities is a key reason for covering up the truth. Employees might be unwilling to take legal action if they believe their blame is factual. Protecting future prospects: By downplaying the role of the scapegoat, the organization hopes to shield them from potential career damage, if the scapegoat is ever needed again or if they seek new opportunities outside the company. Preserving team morale: Scapegoating can be demotivating and damaging to team morale. Presenting a more positive version can help maintain a cohesive and productive work environment.

Conclusion

The use of scapegoating as a remedy for poor decision-making or performance is a controversial but prevalent practice in corporate settings. While it provides a shallow and immediate solution, it often fails to address the underlying issues and can have long-term negative consequences. It is important for organizations to adopt more transparent and constructive methods of addressing performance issues and decision-making mistakes.

Understanding the reasons behind scapegoating and recognizing its common scenarios can help in preventing it from becoming a normalized practice. Employers and employees alike should strive for a culture that fosters honest communication and accountability, leading to more sustainable success.