Rhetoric Of Epistemic Authority: Defending Field Positions During The Financial Crisis

Suhaib Riaz

University of Massachusetts Boston – College of Management

Sean Buchanan

York University – Schulich School of Business

Trish Ruebottom

York University – Schulich School of Business

December 28, 2015

Human Relations, 2016, Forthcoming

Abstract:

In this article we explore how elite actors respond to a field-wide crisis. Drawing from a study of CEOs of large US banks in the immediate aftermath of the global financial crisis, we show how elite actors use rhetorical strategies to defend their dominant position in the field. Specifically, we show how actors strengthen their epistemic authority — the perceived expertise and trustworthiness of an actor — through four distinct but interwoven rhetorical strategies. Actors used two internally-directed means of strengthening epistemic authority by providing rational guarantees and expressing normative responsibilities, and two externally-directed strategies that sought to strengthen their own epistemic authority by lowering the epistemic authority of others through critiquing judgments and questioning motives. We contribute to research on defensive institutional work by highlighting how elite actors rhetorically defended their position following a field-wide crisis.

Rhetoric Of Epistemic Authority: Defending Field Positions During The Financial Crisis – Introduction

In opposition to early neo-institutional research that assumed institutions were self-reproducing (Jepperson, 1991; Lawrence et al., 2002; Scott, 2001), recently scholars have argued that even the most powerful institutions require ongoing maintenance work in order to be reproduced (Lawrence and Suddaby, 2006). As a result, research has begun to focus explicitly on the role of actors in the maintenance of institutions (Dacin, et al., 2010; Lok and De Rond, 2013; Micelotta and Washington, 2013; Zilber, 2009). While studies have examined the ongoing work involved in the maintenance of institutions in periods of relative stability (Dacin et al., 2010; Zilber, 2009), an emerging body of research is focusing on how actors maintain existing institutions following a ‘disruption’ (Maguire and Hardy, 2009). Disruptions are events that disturb existing arrangements in organizational fields and call into question existing institutionalized rules, norms, and assumptions (Hoffman, 1999). Studies have examined how actors defend institutions following disruptions arising from social movement activism (Hardy and Maguire, 2009; Hoffman, 1999; Zietsma and Lawrence, 2010), regulatory changes
(Micelotta and Washington, 2012; Vermeulen et al., 2007), or accidents (Desai, 2011). This body of work suggests that in times of disruption, actors will engage in a variety of activities that aim to defend or repair the legitimacy of the contested practices.

In certain cases, disruptions can lead to field-wide crises (Sine and David, 2003). Fieldwide crises consist of “perceptions by field actors (e.g. organizations, regulators, investors, customers, etc.) that fundamental outcomes are in contrast to expectations, and precipitate action intended to avoid dramatic negative outcomes” (Sine and David, 2003: 186). In field-wide crises, existing practices, rules, norms, and assumptions are no longer viewed as legitimate and status quo is no longer an option. Hence, institutional maintenance work that focuses on defending the legitimacy of existing practices is not likely to be a viable option following such a crisis, and rhetorical justifications may focus instead on social categories of actors and their competence (Lefsrud and Meyer, 2012). However, there is little research on how incumbent actors respond to field-wide crises and how a focus on actors instead of practices may differ from existing conceptions of defensive institutional work.

We address this gap in the literature by conducting a study of the rhetorical strategies of CEOs of large US banks in the immediate aftermath of the global financial crisis. The financial crisis of 2007-2009 was the largest recession in 80 years, with global effects that are still being felt today. The large-scale bankruptcies and restructurings of major banks brought widespread attention to the financial leaders at the heart of the crisis and evoked responses from them in the public sphere. We draw from research on rhetoric that highlights the role of language in persuading others and shaping perceptions of social reality (Scott, 1967; Sillince and Brown, 2009; Moufahim et al., 2015; Zanoni and Janssens, 2004), and build on recent work that shows how rhetorical strategies can impact the institutional arrangements in a field (e.g., Brown et al., 2012; Creed et al., 2010; Green et al., 2009; Suddaby and Greenwood, 2005). Our findings show that elite actors performed defensive institutional work following a field-wide crisis by rhetorically strengthening their own epistemic authority. Epistemic authority refers to the perceived expertise and trustworthiness of an actor. It is socially constructed and determines the extent to which information provided by the actor will be considered reliable and acted upon by others (Kruglanski, 1989; Kruglanski et al., 2009). We found that four rhetorical strategies were used by elite actors to strengthen their epistemic authority in the field. Specifically, actors used two internally-directed strategies, providing rational guarantees and expressing normative responsibilities, and two externally-directed strategies, critiquing judgments and questioning motives, which sought to strengthen their epistemic authority by lowering the epistemic authority of others.

Financial Crisis

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