The Effects of Attribution Style and Stakeholder Role on Blame for the Deepwater Horizon Oil Spill

The Effects of Attribution Style and Stakeholder Role on Blame for the Deepwater Horizon Oil Spill

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The Effects of Attribution Style and Stakeholder Role on

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DOI: 10.1177/0007650317717495

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Article

The Effects of Attribution Style and Stakeholder Role on Blame for the Deepwater Horizon Oil Spill

Stacey R. Kessler1, Kevin T. Mahoney2, Brandon Randolph-Seng3, Mark J. Martinko4, and Paul E. Spector5

Abstract We extend attribution and stakeholder theory in the context of crisis reputation management by examining differences in stakeholder perceptions in the form of organization-related blame. We presented eight stakeholder groups with factual information surrounding the Deepwater Horizon Oil Spill and asked them to indicate the extent to which they blamed the leaders and organizations associated with the event. Stakeholders also completed a survey assessing their attribution styles. Results indicated that perceptions of blame were affected by the interaction of stakeholder role (i.e., active vs. passive) with attribution style (i.e., optimistic vs. pessimistic). Our results suggest that organizational leaders’ understanding of their stakeholders may be an important aspect in managing stakeholders’ sensemaking during crises.

1Montclair State University, NJ, USA 2South Dakota State University, Brookings, USA 3Texas A&M University–Commerce, USA 4Florida A&M University, Tallahassee, USA 5University of South Florida, Tampa, USA

Corresponding Author: Stacey R. Kessler, Department of Management, Feliciano School of Business, Montclair State University, 1 Normal Avenue, Montclair, NJ 07960, USA. Email: kesslers@mail.montclair.edu

717495 BASXXX10.1177/0007650317717495Business & SocietyKessler et al. research-article2017

2 Business & Society 00(0)

Keywords attribution theory, Deepwater Horizon oil spill, reputation management, stakeholder theory

Your reputation is in the hands of others. That’s what a reputation is. You can’t control that.

—Wayne W. Dyer (2006, p. 180)

As the above quotation suggests, a reputation is by definition perceptual. Nevertheless, especially in a business context, a positive reputation is an important resource for organizations to maintain (Coombs, 2007). Research originating in the field of psychology has identified various sources of per- ceptions individuals use to make sense of their social environment (Bechara, Damasio, Tranel, & Damasio, 1997). In particular, according to attribution theory, human beings have an implicit need to perceive their environment in predictable ways (Heider, 1958). As a result of this need, people engage in continuous analyses of their environment to attribute causes (Kelley, 1973). In terms of organizational reputation maintenance, understanding the source of attributions among stakeholders may help an organization better manage those perceptions (Coombs & Holladay, 2002). However, to date, research has failed to examine how various stakeholder perceptions may differ depend- ing on their role in a crisis situation (cf. Claeys, Cauberghe, & Vyncke, 2010). Examining why perceptions can differ depending on the stakeholder’s involvement in a disaster is important given the powerful influence crises can have on sensemaking (Hastie, 1984; Weick, 1995) and the significant rela- tionship organizations have with their stakeholders (Freeman & Reed, 1983). The purpose of the current study, therefore, was to extend attribution and stakeholder theory in the context of crisis reputation management by examin- ing differences in stakeholder perceptions in the form of organization-related attribution of blame.

To examine how various stakeholder perceptions may differ depending on their organization’s role in a crisis situation, we chose the 2010 Deepwater Horizon Oil Spill (herein after referred to as “the Deepwater Horizon Oil Spill” or “the Oil Spill”) to enhance the mundane realism of the study. The Oil Spill first began on April 20, 2010, with an initial oil spill resulting from an explosion aboard the Deepwater Horizon oil platform located in the Gulf of Mexico (“Seeking Answers on Oil Spill,” 2010). Over the next 86 days, oil flowed into the Gulf of Mexico, despite repeated attempts to plug the oil leak. It was not until July 15, 2010, that the well was capped and the flow of oil

Kessler et al. 3

stopped. At that point, approximately 4.2 million barrels of oil had leaked into the Gulf of Mexico (Graham et al., 2011). The explosion and its after- math captured the attention of the U.S. population throughout the summer of 2010 as pundits debated the potential destruction of both the ecosystem and economies in the neighboring Gulf States (Texas, Louisiana, Florida, Mississippi, and Alabama). As such, this event was salient and meaningful to many different stakeholder groups. In the current study, we sought to extend attribution and stakeholder theory by contrasting two broad categorizations of stakeholders: those who were working for organizations involved in vari- ous aspects of the oil industry (i.e., active stakeholders) and those who were not (i.e., passive stakeholders). We proposed that the perceived blame for the Deepwater Horizon Oil Spill and its aftermath is at least partially explained by stakeholders’ role in the crisis.

Theoretical Background

Stakeholder Theory

Stakeholder theory asserts that organizational stakeholders (an individual or group that has a shared interest in the organization) are vital to the existence of organizations (Freeman & Reed, 1983). Importantly, these stakeholders can both be internal and active (e.g., employees, shareholders) or external and passive (e.g., community, customers; R. K. Mitchell, Agle, & Wood, 1997). Hill and Jones (1992) conceptualized organizations in terms of stake- holder agency theory, in which organizations are established and maintained by various entities that contract with each other to jointly achieve desired outcomes in the form of resources. In terms of a business organization, stake- holders are involved in deciding which corporations will receive resources, while the executives in the corporation decide how those resources are allo- cated (R. K. Mitchell, Weaver, Agle, Bailey, & Carlson, 2016).

Prominent researchers (e.g., Jensen, 2002) have argued that executives should make resource allocation decisions based solely on shareholder wealth maximization. The assumption is that by focusing on profit maximization, all the various stakeholders of the business also benefit through economic means. However, such an assumption equates resources with economic gain and ignores other intangible resources that stakeholders may value such as respect, identification, and meaningfulness (R. K. Mitchell et al., 2016). As various stakeholders may be unwilling to trade their intangible resources for the tangible resources, a strict focus on shareholder wealth maximization may ignore these ethically relevant considerations (Freeman, Wicks, & Parmar, 2004). In fact, all other stakeholders besides the shareholders simply

4 Business & Society 00(0)

become a means to the ends for the shareholders (Filatotchev & Nakajima, 2014) given that these stakeholders’ interests may not align with wealth max- imization. Treating stakeholders simply as a means of shareholder profit maximization can have potentially devastating consequences for the business in terms of loss of reputation and legitimacy among the various stakeholders such as in the case of the Deepwater Horizon Oil Spill. R. K. Mitchell and colleagues (2016) recommended that managers focus beyond maximizing shareholder wealth and engage in constructive sensemaking. We posit that such a holistic form of decision making requires a better understanding of the multidimensional nature of stakeholder perceptions as part of the equation. To build on this argument in terms of sensemaking and how the crisis is framed by stakeholders, we turn to attribution theory.

Attribution Theory

Attribution theory is based upon theoretical work by Heider (1958) and focuses on individuals’ causal explanation for outcomes or events (Martinko, Harvey, & Dasborough, 2011; Weiner, 1985). That is, individuals tend to have an innate need to understand why certain events occur and who should be held responsible for those events (Heider, 1958; Martinko et al., 2011). Both primary studies and meta-analytic research (Harvey, Madison, Martinko, Crook, & Crook, 2014; Martinko et al., 2011) indicate that attribution theory provides valuable insights on how people assess causation and blame on a daily basis (cf. Lord, 1995; T. Mitchell, 1982). Nevertheless, attributional processes are most often triggered by important, salient, negative, and unex- pected events (Harvey, Harris, & Martinko, 2008; Harvey et al., 2014; Martinko et al., 2011).

Individuals typically use the following three dimensions of attributions when seeking causal explanations: locus of causality, stability, and control- lability (Harvey et al., 2014). The locus of causality focuses on whether the presumed cause of the outcome lies within the individual (internal) or outside of the person (external). For example, when explaining one’s own failure, such as missing a work deadline, an internal attribution would mean that the event occurred as a function of an internal characteristic of that individual (e.g., ability or effort). An external attribution, however, would mean that the presumed cause of the missed deadline was due to external circumstances (e.g., colleague’s fault). Along these lines, when an individual is attempting to understand the presumed cause of another person’s outcomes, an internal attribution refers to internal characteristics of that individual, such as effort or ability, while an external attribution refers to situational factors outside of the target’s control (Harvey et al., 2014).

Kessler et al. 5

The stability dimension refers to the temporal nature of the event (Harvey et al., 2014). In other words, individuals seek to understand whether the cause of the event is temporary or permanent. Such an explanation can have impli- cations for future expectations. For example, if an individual attributes a car accident to temporary conditions, such as icy roads, he or she might not draw long-term implications regarding his or her own driving ability given the temporal nature of those road conditions. Finally, controllability refers to whether the outcomes of an event are within the perceived volition of the individual (Harvey et al., 2014). For example, luck—either good or bad—is perceived to be a factor outside of the individual’s control.

More recently, researchers have identified personality differences in terms of how attributions are applied in various situations. That is, researchers have found that people tend to have attribution styles, or stable ways of attributing cause across a variety of situations (Martinko et al., 2011). Two common attribution styles examined in the organizational sciences are the optimistic and the pessimistic styles (for a review, see Martinko, Harvey, & Douglas, 2007). Individuals with optimistic styles tend to view negative outcomes as externally caused, unlikely to reoccur, and controllable. On the contrary, indi- viduals with pessimistic attribution styles view negative events as internally caused, likely to reoccur, and uncontrollable (Campbell & Martinko, 1998; Martinko et al., 2007).

Attribution theory has been used to explain a number of organizational phenomena including workplace aggression/counterproductive work behav- ior (Douglas & Martinko, 2001; Spector, 2011), leadership (Campbell & Swift, 2006; Green & Liden, 1980), and employee selection (Ashkanasy, 1989; Silvester, Anderson-Gough, Anderson, & Mohamed, 2002). In addi- tion, a recent meta-analysis demonstrated that attribution theory accounted for significant variance in explaining emotional reactions to outcomes, employee performance, relationships between supervisors and subordinates, as well as decisions regarding rewards and punishments (Harvey et al., 2014). Importantly, Harvey and colleagues (2014) noted that the obtained effect sizes in this meta-analysis were comparable to effect sizes obtained in promi- nent meta-analyses linking key organizational theories of justice (Cohen- Charash & Spector, 2001), core self-evaluations (Judge & Bono, 2001), and leader–member exchange (Gernster & Day, 1997) to performance indices. This suggests attributional variables have similar explanatory power to other popular organizational variables.

Related to the current study, some have argued that attribution theory pro- vides considerable insight into how individuals explain salient, catastrophic events (Martinko et al., 2011; Zyglidopoulos, 2001). Furthermore, it is well documented that attributional process are more likely to be activated under

6 Business & Society 00(0)

circumstances that are unexpected and important (Harvey et al., 2014; Lord, 1995). Martinko, Breaux, Martinez, Summers, and Harvey (2009), for exam- ple, examined attributions of responsibility for the response to Hurricane Katrina. In that article, they explained how the attributional biases of key leaders associated with Hurricane Katrina (President George Bush, New Orleans Mayor Ray Nagin, Louisiana Governor Kathleen Blanco, and Federal Emergency Management Agency [FEMA] Head Michael Brown) predicted their reactions and behaviors. Using selected speeches from these leaders, they illustrated how the self-serving and actor–observer biases may have related to the various actors’ (e.g., Ray Nagin, George Bush, Michael Brown, and Governor Blanco) explanations for the problems that occurred. Although Martinko and colleagues (2009) focused on leader attribution processes in a crisis situation, to date, very little has been done to empirically explore how attribution processes affect stakeholder perceptions in crisis situations. By identifying how and why perceptions differ for various stakeholder groups, organizational leaders can be better equipped to manage reputations in future catastrophes. Given that both sensemaking and attribution processes are more likely to be activated in salient, catastrophic events (Harvey et al., 2014; Hastie, 1984; Lord, 1995), important insights into the crisis framing of stake- holders may be gained by incorporating both perspectives. As such, we posit that crisis framing is not only formed in terms of the attributions of leaders in a crisis (Martinko et al., 2009), but simultaneously with the attributions of the relevant stakeholders (Weick, 1993). By ignoring the stakeholder part of the equation in terms of crisis framing, organizational leaders may be less able to engage in holistic forms of sensemaking and thus be ill-equipped to manage the sensemaking process of stakeholders. It may be that sensemaking in a crisis situation evolves in a bottom-up fashion consistent with recent theory in the area (Gray, Purdy, & Ansari, 2015). However, given the lack of research examining the role of attributions in reputation management, sensemaking processes could also be bi-directional (Weick, Sutcliffe, & Obstfeld, 2005). Our research helps to provide initial understanding to the sensemaking pro- cess involved in crisis framing. It should be noted that one exception to the lack of research into the role of attributions in reputation management is situ- ational crisis communication theory (SCCT), which we will review next.

SCCT

Recently, attribution theory has been extended into the realm of post-crisis communication research to help explain how stakeholders’ form their per- ceptions of responsibility (Coombs, 2007). Specifically, SSCT (Coombs & Holladay, 2002) focuses on identifying the appropriate organizational crisis

Kessler et al. 7

response strategy based on stakeholders’ attributions of organizational responsibility. SCCT conceives organizational reputation as a valuable resource and as such its objective is to evaluate stakeholders’ attributions concerning a crisis. In particular, SCCT predicts that perceptions of organi- zational control and responsibility will determine organizational response strategies depending on the severity of the crisis and the organizational his- tory of responding to past problems (Coombs & Holladay, 2002). As such, different strategies are warranted, contingent on the specific perceptions that are predicted (Claeys et al., 2010). Initial empirical research has found sup- port for SCCT (Claeys et al., 2010; Coombs & Holladay, 2002; Jeong, 2009). For example, Jeong (2009) found that low as opposed to high distinctiveness information lead to lower external attributions concerning an oil spill that occurred in South Korea in December 2007. They also found that lower external attributions lead to greater tendencies toward punishment. This pro- vides support for Schwarz’s (2008) extension of SCCT in terms of going beyond a descriptive account of stakeholder perceptions by explaining how judgments of internal and external causes and controllability may form.

Despite SCCT’s prediction of the role of attributions for organizational reputation management in crisis situations (including recent extensions of SCCT; Schwarz, 2008), the full benefits of utilizing attribution theory have not been articulated or investigated. Recent theoretical and empirical work in psychology, for example, has emphasized the critical role the situated envi- ronment plays in attributional processes (e.g., situated inference model; Loersch & Payne, 2011; Randell, Randolph-Seng, Hurst, & Reich, 2016); specifically, that internal attributional processes are often determined by con- text-specific environmental stimuli. As such, stakeholders’ perceptions can- not be understood in terms of being unidimensional as implied by SCCT (i.e., seeing stakeholders as being relatively homogeneous in their perceptions of a crisis). Instead, consistent with recent developments in stakeholder theory (R. K. Mitchell et al., 2016), stakeholder perceptions are not only situated in certain contexts but also in terms of different perspectives. Our research, therefore, departs from past efforts by expanding on stakeholder and attribu- tion theory in terms of demonstrating differences within (i.e., attribution style) and between (i.e., role) stakeholder perceptions, which we elaborate upon in the next section.

The Current Study

Building on stakeholder and attribution theories, we sought to examine dif- ferences in stakeholder perceptions of blame for the Deepwater Horizon Oil Spill to demonstrate the importance of conceiving of stakeholder perception

8 Business & Society 00(0)

in a multidimensional way. To identify potential targets of blame for the Oil Spill, we reviewed popular press articles related to the Oil Spill and its after- math (Morrison, 2010; Warner, 2010). Our review identified the following individuals, organizations, or groups as targets of blame: British Petroleum (BP), BP chief executive officer (CEO) Tony Hayward, Mineral Management Services (MMS), Halliburton, President Obama, Heavy Hyundai Industries, and Transocean. In the section below, we document and explain the apparent role these targets played in the Oil Spill.

Responsible Parties

BP and Tony Hayward. BP was widely held responsible for the Oil Spill as well as the subsequent unsuccessful attempts at stopping the flow of oil into the Gulf of Mexico (Lubin, 2010; Schwartz, 2010; Veil, Sellnow, & Wick- line, 2013). Indeed, the federal government held BP officially responsible (Schwartz, 2010). Moreover, there was legal precedent for this because as the owner of the oil well, under the U.S. Oil Pollution Act of 1990, BP is consid- ered the “responsible party” (“Seeking Answers on Oil Spill,” 2010). Some, including those within the federal government, even went as far as calling the oil spill the “BP Oil Spill” (House of Representatives Committee on Energy and Commerce, 2010). In addition, approximately 2 months after the Oil Spill, President Barack Obama stated that “we will make British Petroleum (BP) pay for the damage their company has caused. And we will do whatev- er’s necessary to help the Gulf Coast and its people recover from this trag- edy” (“Full Text of President Obama’s BP Oil Spill Speech,” 2010).

Similarly, as CEO of BP at the time of the Oil Spill, Tony Hayward was often discussed in the popular press. He was the executive responsible for BP’s operations and served as the figurehead. He was seen spending time on a yacht shortly after the Oil Spill (Blake, 2010) and was even quoted as saying that the Oil Spill itself was “relatively tiny” (“Tony Hayward, BP CEO,” 2010).

Heavy Hyundai Industries, Halliburton, and Transocean. All three of these orga- nizations were involved in various aspects of the drilling process. Heavy Hyundai Industries built the oil rig Deepwater Horizon that was owned by Transocean. Halliburton Energy Services Inc. was installing production cas- ing and cement at the base of the well at the time of the accident (Urbina, 2010). Subsequent information suggested that Halliburton knew that the cement mixture was faulty but used it anyway (“The Latest Gulf Outrage,” 2010). In addition, BP noted that according to Transocean’s emergency response manual, Transocean employees were responsible for operations and monitoring the well (Gold & Chazan, 2010).

Kessler et al. 9

MMS and President Obama. MMS was the U.S. federal agency with over- sight and safety responsibilities over drilling operations, including this event. MMS was accused of conflicts of interest by collecting royalties from oil companies operating in federal waters (“The Latest Gulf Out- rage,” 2010). President Obama was the U.S. president with direct authority over MMS at the time of the oil spill. Subsequent reports blamed the gov- ernment for underestimating the amount of oil that leaked into the Gulf and the president’s administration for not fully informing the public (Broder, 2010).

Active versus passive stakeholders

We expected that blame for the Deepwater Horizon Oil Spill placed on each of these aforementioned leaders/entities would be influenced by the perspec- tive of various stakeholders in terms of those who were either working for organizations involved in the oil industry (i.e., active stakeholders) versus those who were not (i.e., passive stakeholders). Importantly, and counter to SCCT, we hypothesized that this would occur even when all parties were presented with the same objective and factual information surrounding the event, given that individuals had already formed their perceptions of blame for the crisis based in part from the media (social or otherwise) and other external influences (Schultz, Utz, & Goritz, 2011; see the appendix). To test this prediction, we selected eight stakeholder groups with various interests in the Oil Spill and its aftermath and classified them as either being active or passive stakeholders.

Active stakeholders. Active stakeholders refer to members of groups who had a direct financial involvement with the oil industry before the Oil Spill. We therefore classified BP and Halliburton employees as active stakeholders. To get a more diverse sampling of active stakeholders in the oil industry, we also surveyed BP employees not living/work on the Gulf Coast. We focused on BP employees as opposed to Halliburton employees because BP seemed to be the “frontrunner for blame” early on and in fact was considered the “responsible party” under the Oil Pollution Act of 1990 (“Seeking Answers on Oil Spill,” 2010).

Passive stakeholders. Passive stakeholders refer to members of groups that did not have a direct financial involvement with the oil industry before the Oil Spill. Therefore, we classified Gulf Coast fishermen, individuals who rent out Gulf Coast condos, Gulf Coast restaurant/hotel owners and employees, and Gulf Coast residents as passive stakeholders. Although

10 Business & Society 00(0)

these groups were in a position to see the direct effects of the Oil Spill, they had no direct involvement in the oil industry itself. To get a more diverse sampling of passive stakeholders, we also surveyed U.S. Environmental Protection Agency (EPA) employees given their reactive role in environ- mental affairs in the oil industry.

Hypotheses

To demonstrate the multidimensional nature of perceptions of blame in a cri- sis situation between stakeholder groups, we predict that active versus pas- sive stakeholders will perceive blame consistent with their stakeholder role (R. K. Mitchell et al., 1997). This prediction also follows from research con- cerning the actor–observer bias (see Martinko et al., 2007, and Harvey et al., 2014, for reviews) which predicts that actors (e.g., active stakeholders) tend to make external attributions for their behavior while observers (e.g., passive stakeholders) tend to blame the dispositional characteristics of actors for rel- evant outcomes. Specifically, we posit that active stakeholders will focus on the external environment and blame the Oil Spill more on external circum- stances beyond the active stakeholders and their leaders, while passive stake- holders will focus on the active stakeholders and their leaders and blame them accordingly. We predict, therefore, that

Hypothesis 1 (H1): Passive stakeholders will be more likely to blame the leaders and organizations involved in the Oil Spill than the active stakeholders.

We also hypothesize that attribution style will moderate the aforemen- tioned relationship. Consistent with attribution theory (Harvey et al., 2014; Martinez, Martinko, & Ferris, 2012; Martinko et al., 2011), we expect that active stakeholders who have optimistic attribution styles, which are a ten- dency to blame others for failures, will be more external in their attributions than active stakeholders who are pessimistic and tend to blame themselves for failures. We also expect that passive stakeholders’ tendencies to blame active stakeholders and their leaders for failures will interact with their attri- bution styles such that those with optimistic biases who take credit for suc- cess and blame others for failures will hold the leaders/entities more responsible than those with pessimistic styles. We predict, therefore, that

Hypothesis 2 (H2): Attribution styles will interact with attributions of blame by both active and passive stakeholders: Active stakeholders’ ten- dencies to blame the leaders and organizations involved in the Oil Spill

Kessler et al. 11

will be decreased when they have optimistic attribution styles, and pas- sive stakeholders’ tendencies to blame the leaders and organizations involved in the Oil Spill will be enhanced when they have optimistic attribution styles.

In sum, we expect that stakeholders’ attribution styles, their relative posi- tions as active or passive stakeholder group members, as well as the interac- tion of these two variables will impact the assessment of blame of the key leaders and organizations (BP, Tony Hayward, MMS, Halliburton, President Obama, Heavy Hyundai Industries, and Transocean) involved in the Deepwater Horizon Oil Spill.

Method

Participants and Procedure

In all, 504 participants were recruited via the survey company ITracks, who targeted the eight stakeholder groups (BP employees living and working on the Gulf Coast, BP employees not working on the gulf coast, Halliburton employees, Gulf Coast residents, Gulf Coast fishermen, Gulf Coast restau- rant/hotel owners and employees, people who rent out Gulf Coast condos, and EPA employees). Useable data included 326 individuals who were veri- fied by ITracks as members of one of the aforementioned stakeholder groups. Participants ranged in age from 18 to 78 years with a mean age of 38.88 years (SD = 13.32). The sample was approximately half male (53.7%) and mostly White (66.6%); 34.5% of the sample reported an annual salary between US$10,000 and US$40,000 with 22.1% reporting that they earned US$90,000 or more per year. In terms of education, 16.6% had a master’s degree, 26.1% had a bachelor’s degree, 13.5% had an associate’s degree, and 21.2% had some college.

As described above in the “Hypotheses” section, stakeholder groups were classified as being from the active (n = 101) or the passive side (n = 225) of the oil industry. Both groups were similar in age. The active stake- holder groups’ mean age was 36.77 (SD = 10.84) and the passive stake- holder groups’ mean age was 39.83 (SD = 14.22). In addition, both groups were mostly male (active = 55.4%, passive = 52.9%) and mostly White (active = 67.3%, passive = 66.2%). However, the active stakeholder groups reported having higher incomes and higher education levels than the pas- sive stakeholder groups. Specifically, for the active stakeholder groups, 41.6% reported earning US$90,000 or more per year and 11.9% earned between US$80,000 and US$89,000. Furthermore, most reported having a

12 Business & Society 00(0)

master’s degree (27.7%) or bachelor’s degree (22.8%) as their highest level of education. On the contrary, 15.1% of the passive stakeholder groups reported earning between US$20,000 and US$29,000 per year with only 13.3% earning over US$90,000 and another 13.3% earning between US$50,000 and US$59,000 per year. In terms of the highest level of educa- tion achieved, only 11.6% of the passive stakeholder groups reported hav- ing a master’s degree, with 27.6% having a bachelor’s degree, 15.1% having an associate’s degree, and 21.8% having some college. Table 1 includes a breakdown of demographic variables.

All participants were asked to read a paragraph describing the Deepwater Horizon Oil Spill that only included facts related to events leading up to and surrounding the Deepwater Horizon Oil Spill (see the appendix). We then asked participants to answer a series of questions centered on who they blamed for Deepwater Horizon Oil Spill. Afterward, participants were asked to complete the Organizational Attribution Style Questionnaire (OASQ; Kent & Martinko, 1995) and provide demographic information. These measures are discussed in more detail in the following section. Participants were compensated US$5.

Measures

Blame. Using a single item index, we asked each participant to rate the extent to which they blamed each of seven individuals/entities (BP, Tony Hayward, MMS, Halliburton, President Obama, Heavy Hyundai Industries, and Trans- ocean) for the Deepwater Horizon Oil Spill. Each item was assessed along a 10-point Likert-type scale with 1 indicating most at fault and 10 indicating not at all at fault. We reverse coded these items so that higher scores indi- cated higher levels of blame. A sample item was, “To what extent is BP at fault for the 2010 Deepwater Horizon Oil Spill?”1

Attribution style. We used Kent and Martinko’s (1995) 18 item OASQ to assess dispositional attribution styles. Using organizational scenarios, the OASQ asks individuals to rate the items along a 7-point scale, to assess attri- bution style. Following Martinez et al. (2012), we used a total OASQ score where we totaled the controllability (α = .85), stability (α = .84), and inten- tionality (α = .84) scales for each participant. High scores were indicative of a pessimistic attribution style, where the participant views negative organiza- tional situations as likely to occur again in the future, outside of his or her control, and not intended. On the contrary, low scores indicated an optimistic attribution style whereby the participant views these same negative events as unlikely to occur again in the future (see Seligman, 1990). Alpha for the full OASQ was .85.

Kessler et al. 13

Results

All analyses were conducted using SPSS version 22. Table 2 includes descrip- tive statistics and correlations of the blame variables and the attribution style variable. As can be seen, on average, participants blamed BP the most (M = 6.46, SD = 2.81) followed closely by Tony Hayward (M = 6.10, SD = 2.58), MMS (M = 5.99, SD = 2.64), and Halliburton (M = 5.98, SD = 2.69).2

To test the study hypotheses, we conducted seven hierarchical moderated regression analyses (i.e., one for each of the blame variables). In Model 1, we placed the control variables (income, gender, and age). In Model 2, we placed the attribution style score, and the participant’s relevant position as a member of the active or passive stakeholder group (dichotomous variable). Finally, in Model 3, we added the interaction term (i.e., the product of the stakeholder group and attribution style). Results are presented in Table 3.

Table 1. Demographic Information by Stakeholder Group.

Category n Gender

(%) Age Income (in

US$) Degree

Active stakeholders BP employees living/

working on the Gulf Coast

60 56.70 34.75 Over 90 MA

Halliburton employees 23 56.50 38.30 Over 90 BA BP employees not

working on Gulf Coast

18 50.00 41.56 Over 90 BA

Passive stakeholders Gulf Coast residents 76 52.60 43.24 20-29 and

50-59a Some college

and BAa

Gulf Coast fishermen 45 68.90 45.71 30-39 and 50-59a

Some College

Gulf Coast restaurant/ hotel owners and employees

44 36.40 37.27 20-29 and 50-59a

BA

People who rent out Gulf Coast condos

30 40.00 32.40 40-49 BA

EPA employees 30 66.70 33.53 80-89 BA and MAa

Note. Age is the mean response. Gender refers to the percent that are male. Income refers to annual compensation and is provided in thousands of dollars and is the modal response. BP = British Petroleum; EPA = U.S. Environmental Protection Agency. aIndicates a bimodal response.

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16 Business & Society 00(0)

Hypothesis 1 proposed that passive stakeholders (Gulf Coast fishermen, individuals who rent out Gulf Coast condos, Gulf Coast restaurant/hotel own- ers and employees, Gulf Coast residents, and EPA employees) would be more likely to blame the leaders and organizations involved in the Oil Spill than the active stakeholders (BP and Halliburton employees). To test this hypothesis, we examined the active/passive stakeholder variable coefficient in Model 2. After controlling for gender, income, and age, results failed to find significant differences between the active and passive stakeholder groups. Therefore, Hypothesis 1 was not supported.

Hypothesis 2 proposed an interaction between the stakeholder position and attribution style on each of the seven blame variables (BP, Tony Hayward, MMS, Halliburton, President Obama, Heavy Hyundai Industries, and Transocean). To test this hypothesis, we examined the interaction term (OASQ × A/P) in Model 3. As indicated by the significant interaction term (OASQ × A/P) as well as the significant R2 change, this hypothesis was mostly sup- ported as we detected significance in all cases except for blaming BP.

More specifically, in the case of Tony Hayward, Transocean, Halliburton, President Obama, and Heavy Hyundai, passive stakeholders with an optimis- tic attribution style were more likely to blame these leaders and organizations than were active stakeholders with an optimistic attribution style. However, this relationship was reversed for individuals with a pessimistic attribution style. That is, passive stakeholders with a pessimistic attribution style were less likely to blame these leaders/entities than were active stakeholders with a pessimistic attribution style. Given that the relationship was similar for each of these outcome variables, the resulting pattern is displayed in Figure 1.

Consistent with the results above, for MMS, passive stakeholders with an optimistic attribution style were more likely to blame the organization than were active stakeholders with an optimistic attribution style. Counter to the results above, however, there was no difference in blame between active stakeholders and passive stakeholders with a pessimistic attribution style (Figure 2).

Discussion

The current study examined stakeholder reactions to Deepwater Horizon Oil Spill. Results indicated that the interaction between an individual’s relative position as an active versus passive stakeholder and his or her attribution style affected attributions of blame for each leader/entity except for BP. More specifically, passive stakeholders with an optimistic attribution style were more likely to blame the identified leaders/entitites than were active stake- holders with optimistic attribution styles. With the exception of MMS, the

Kessler et al. 17

relationship was reversed for those with a pessimistic attribution style such that passive stakeholders with a pessimistic attribution style were less likely to blame the identified leaders/entities than were active stakeholders with a pessimistic attribution style. Furthermore, a failure to find an interaction with attribution style for blaming BP was likely driven by the large amount of blame that was placed on BP. In retrospect, a failure to support the first

Figure 2. Interaction of active/passive stakeholder and attribution style on blaming Mineral Management Services.

Figure 1. Interaction of active/passive stakeholder and attribution style on blaming Transocean, Halliburton, Tony Hayward, President Obama, and Heavy Hyundai Industries.

18 Business & Society 00(0)

hypothesis is consistent with recent theoretical developments (Malle, 2011) in that attributional perceptions are not solely influenced by group identity, but consistent with the second hypothesis, are also influenced by individual- ized perceptions such as attribution styles.

The purpose of this study was to identify why perceptions of crisis situa- tions may differ so that organizations can be better able to manage reputa- tions in future crises. Building off of stakeholder and attribution theories, we predicted that the interaction of stakeholder role and individual attribution styles, within the context of the Deepwater Horizon Oil Spill, would help us better understand perceptions of blame. To the best of our knowledge, this is the first study to demonstrate why various stakeholder perceptions differ in a crisis in the form of organization-related blame. These findings have both theoretical and practical significance.

Theoretical Implications

Consistent with recent developments in stakeholder theory (R. K. Mitchell et al., 2016), the current results suggest that a shareholder profit maximiza- tion strategy is a short-sighted frame for leaders of organizations to make sense of stakeholder motivations given the multidimensional nature of stakeholder perceptions found in the context of the Deepwater Horizon Oil Spill. Such short-sightedness may not only lead to a loss of reputation and legitimacy, but may actually contribute to the likelihood of an event turning into a crisis because of a lack of sensitivity to all stakeholders’ needs. In terms of extending stakeholder theory, therefore, organizational leaders should maximize their efforts by first engaging in holistic forms of sense- making regarding their relationships with stakeholders (as elaborated in the “Practical Implications” section) to help manage the sensemaking process of stakeholders (R. K. Mitchell et al., 2016), especially in a crisis (Weick et al., 2005).

Counter to SCCT, our results suggest that stakeholder perceptions of crises are not fully understood and managed in terms of certain situations, but also in terms of different perspectives; specifically in relation to the interaction of stakeholder’s role between groups (active vs. passive) with attribution style within stakeholder groups (optimistic vs. pessimistic). Therefore, stakehold- ers’ perceptions cannot be understood in terms of being unidimensional as implied by SCCT (i.e., seeing stakeholders as being relatively homogeneous in their perceptions of a crisis). Our findings are consistent with recent theo- retical advances in attribution theory from psychology (Loersch & Payne, 2011) as well as a socially situated cognitive approach that has recently been applied in the organizational domain that suggests that social cognition is not

Kessler et al. 19

just situated, but action-oriented, embodied, and distributed across people and objects (R. K. Mitchell, Randolph-Seng, & Mitchell, 2011).

Given that both sensemaking and attribution processes are more likely to be activated in salient, catastrophic events (Harvey et al., 2014; Hastie, 1984; Lord, 1995), understanding these processes in terms of a socially situated approach may be an important step in managing an organization’s reputation. This type of perspective would not only consider the attributions of leaders in a crisis (Martinko et al., 2009), but simultaneously the attributions of the relevant stakeholders (Weick, 1993), meaning that organizational leaders would be more likely to engage in holistic forms of sensemaking concerning stakeholders and thus being better equipped to manage the sensemaking pro- cess of stakeholders.

Although not a focus of the current research, it is also important to mention how our findings support a microfoundation approach. Specifically, micro- foundations, which link micro to macro concepts, are increasingly being used to unbundle complex social processes leading to improved explanations (Barney & Felin, 2013). In the current research, we found that individual-level attribution styles (optimistic vs. pessimistic) were consistent across meso- level stakeholder groups (active vs. passive), which in turn were related to perceptions of macro-level organizations, despite our separation of leaders from their organizations. Our results suggest, therefore, that sensemaking in terms of blame for the Oil Spill evolved in a more bottom-up fashion consis- tent with recent theory in the area (Gray et al., 2015). Nonetheless, especially in a crisis situation, such sensemaking processes are likely bi-directional (Weick et al., 2005), which involves a number of practical considerations such as communication from the top within an organization and the influence of the media. We consider these practical implications next.

Practical Implications

Although we presented all participants with the same factual account of events (see the appendix), the interaction between stakeholder role and attribution style appeared to influence participants’ responses. Such a finding can be understood in terms of the sensemaking process of the individuals in the cri- sis situation (Hastie, 1984), not only in terms of individual or subgroup influ- ences, as addressed in the current study, but also in terms of other more high level types of influences such as organizational messages from leaders and the media. Important, therefore, is the realization that the sensemaking pro- cess in a crisis is not static but ever changing and evolving (Weick et al., 2005). This suggests that business leaders may need to already have built positive relationships with stakeholders before crises occur, especially with

20 Business & Society 00(0)

passive stakeholders (cf. Welcomer, Cochran, Rands, & Haggerty, 2003) to successfully manage their organization’s reputation. Consistent with SCCT, therefore, response strategies among passive stakeholders will be more effec- tive if based on both prior stakeholder relationships and relevant crisis history (Coombs, 2007). In managing a reputation among more active stakeholders, such as in the case of BP, focusing on the decision-making process used during the crisis may be the key (Christensen & Kohls, 2003). In fact, shortly after the Oil Spill, Tony Hayward (CEO of BP) was fired, likely helping BP employees to adjust their sensemaking of the crisis in more positive directions. Nevertheless, based on the current study, such actions would likely have little to no effect on more passive stakeholders’ sensemaking of the crisis, especially considering the powerful influence the media can have on sensemaking in a crisis situation (Schultz et al., 2011). Overall, the key to successful reputation management would seem to be both knowing and responding to the differing needs of organizational stakeholders depending on whether they are active or passive (Sharfman, Pinkston, & Sigerstad, 2000).

Limitations

There are several limitations of our study. First, our sample of stakeholders may not be representative of the larger population of stakeholders as stake- holder groups ranged between 18 and 60 participants and participation was voluntary. Second, we collected data approximately 3 years after the Deepwater Horizon Oil Spill and did not ask BP employees whether they worked for BP during the time of the Oil Spill. As such, responses collected immediately after the Deepwater Horizon Oil Spill might have differed than those observed in the current study. However, as Martinko and colleagues (2007) have argued, attribution styles are dispositional tendencies and as such likely preceded the Oil Spill. Finally, the data in the current study are cross-sectional. Although our results, along with theory and prior research, support a causal role for attribution style and stakeholder group membership in judgments of blame, because our data were cross-sectional, inferences of causation should be made with caution. Clearly more research needs to be done to more clearly articulate how organizational leaders can use informa- tion about stakeholder groups to better manage their own and their organiza- tions’ reputations.

Conclusion

In the current research, we found that stakeholder role and attribution styles are jointly related to perceptions of crises. To the best of our knowledge, this is the

Kessler et al. 21

Appendix

On April 20, 2010, methane gas from an underwater well shot up through the drill column of the oil rig, Deepwater Horizon, causing an explosion. Deepwater Horizon was located in the Gulf of Mexico 41 miles off the Louisiana coast. The result of the explosion and subsequent fire was the death of 11 workers and 17 injuries on the oil rig. Attempts made to put out the fire were unsuccessful, and the rig sunk into the ocean within a few days. Around the time that the Deepwater Horizon sank, oil from the well began to leak into the ocean, and continued to leak for about 3 months. Over 50,000 gallons of oil per day leaked into the Gulf, and approximately 4.9 million gallons of crude oil (the amount is still under debate) had leaked into the ocean after the well was thought to be effectively capped on July 15, 2010.

The following are facts about the situation described above:

1. The oil rig Deepwater Horizon was built by Heavy Hyundai industries. 2. Transocean owned the Deepwater Horizon. 3. British Petroleum (BP) leased the Deepwater Horizon from Transocean. 4. Halliburton Energy Services Inc. was installing production casing on

the well at the time of the Oil Spill. 5. The U.S. federal agency with oversight/safety responsibilities over

the drilling operation was Mineral Management Services (MMS). 6. Tony Hayward was the chief executive officer (CEO) of BP. 7. President Obama had direct authority over MMS.

first study to demonstrate why various stakeholder perceptions differ in a crisis with regard to organization-related blame. Based upon stakeholder and attribu- tion theories, these results suggest that organizational leaders may be well- positioned to manage their stakeholders’ sensemaking of a crisis by first focusing on their own holistic sensemaking of their stakeholders, leading to relationships of trust before a crisis occurs (R. K. Mitchell et al., 2016). As such, consistent with the opening quotation by Wayne Dyer, organizations (e.g., businesses) may not be able to control how they are seen by others (e.g., society), but they can control how they see those others, which, especially in a crisis situation, may allow them to better understand and manage those others.

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

22 Business & Society 00(0)

Funding

The authors disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This research was supported by a research incubator grant from the Southern Management Association.

Notes

1. To examine whether these items could be grouped together, we ran an explor- atory factor analysis (EFA) using maximum likelihood extraction and promax rotation. The results suggested a single factor solution. We then forced reran the EFA, forcing a two-factor solution and the results were inconclusive. Therefore, we retained the separate variables.

2. To statistically justify the active versus passive stakeholder grouping proposed, we conducted two sets of univariate between-subjects fixed effects ANOVAs with a Scheffe post hoc test. In the first set, we conducted seven ANOVAs (one for each DV) using the active stakeholders (BP employees living and working on the Gulf Coast, BP employees not working on the gulf coast, and Halliburton employees) as levels of the fixed effect factor. The goal of this analysis was to detect whether significant differences existed between each of the active stake- holder groups on the blame variables. We then repeated this series of analyses using the passive stakeholder groups (Gulf Coast residents, Gulf Coast fisher- men, Gulf Coast restaurant/hotel owners and employees, people who rent out Gulf Coast condos, and EPA employees). Results indicated that there were no differences within each stakeholder group on the assessment of blame for each of the leaders/entities proposed. More specifically, although a few of the F statistic tests were significant, none of the Scheffe post hoc tests were significant. Given the failure to detect significance, we felt justified to continue with the proposed classification of stakeholders as either active or passive.

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Author Biographies

Stacey R. Kessler (PhD, University of South Florida) is an associate professor of management at Montclair State University’s School of Business. Her research inter- ests include counterproductive work behavior (deviant behaviors in the workplace), leadership, and organizational climate/structure. She is the author of peer-reviewed journal articles in outlets such as the International Journal of Management Reviews, Journal of Management, the Journal of Organizational Behavior, and the Journal of Vocational Behavior.

Kessler et al. 27

Kevin T. Mahoney (PhD, University of Akron) is an assistant professor and I/O psychology MS program coordinator, South Dakota State University. His research interests focus on emotions, decision making, and historical processes in psychology and organizational behavior. His articles have appeared in such journals as Journal of Business and Psychology, Journal of Occupational Health Psychology, Journal of Vocational Behavior, Personality and Individual Differences, and Leadership Quarterly.

Brandon Randolph-Seng (PhD, Texas Tech University) is currently an associate professor of management at Texas A&M University–Commerce. His research inter- ests include the social and cognitive factors involved in leadership, groups, and entre- preneurship and he has published in such outlets as the Academy of Management Review, Behavior & Brain Sciences, and Leadership Quarterly. He also serves as an associate editor for Management Decision.

Mark J. Martinko (PhD, University of Nebraska) is the Anheuser-Busch eminent scholar of organizational behavior at Florida A&M University. He formerly was a professor of management at the University of Queensland, Australia, and was the Bank of America professor of management at Florida State University where he is a professor emeritus. He is currently an associate editor for the Journal of Organizational Behavior and serves on the editorial boards of the Journal of Leadership and Organizational Studies, Journal of Organizational Behavior Management, Leadership Quarterly, and Organizational Dynamics. Previously, he served two successive 3-year terms on the editorial board of the Academy of Management Review. He spe- cializes in the study of organizational attributions, and is recognized as a leader in the field of attribution theory.

Paul E. Spector (PhD, University of South Florida) is a distinguished professor of industrial-organizational (I-O) psychology at the University of South Florida (USF). He holds a courtesy professor appointment in the Muma College of Business at USF. He is the associate editor for Point/Counterpoint for Journal of Organizational Behavior and associate editor for Work & Stress, and is on the editorial board for Journal of Occupational Health Psychology.

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