Talk is Cheap: Organizational Apologies from the Stakeholder's Perspective

Abstract

Apologies are a unique type of communication that organizations can use to rebuild their public image and their relationships with stakeholders after a crisis. Scholars in many disciplines have studied apologies, and apologies have been the most heavily studied crisis communication strategy. Despite the attention scholars have paid to this concept, no single, unifying definition of an apology exists. The purpose of this dissertation was to determine what constitutes an effective organizational apology from the perspective of an organization's stakeholders.

Three separate studies were conducted. Study 1 was an online experiment that used a 2x2x2x2 between-subjects factorial design. The purpose of this study was to test the effects of four apology components (expressions of remorse, acknowledgements of responsibility, promises of forbearance, and offers of reparations), as well as the effects of the organization-stakeholder relationship, on stakeholders' reactions to a crisis. Participants were asked to identify an online retailer with whom they had done business in the past, and then to imagine that the online retailer had been hacked and their customer information had been stolen. Participants were presented with one of 16 different apology messages, and completed a questionnaire to measure their perception of the apology, account acceptance, perceptions of the organization's reputation, relationship quality (OPR), anger, empathy, attributions of responsibility, and behavioral intentions.

Study 2 and Study 3 were designed to find out what stakeholders considered to be the important components of an organizational apology without prompting from the researcher. Participants in both studies were asked to imagine the same data breach crisis used in Study 1. Study 2 asked participants to write the kind of apology they would accept from the organization in the scenario. Study 3 asked participants to write a list of suggestion the organization could use to make an effective apology.

The results of Study 1 revealed that all four of the apology components contributed to stakeholders' perception that the organization had apologized. These four components also produced higher scores for account acceptance, organizational reputation, and post-crisis relationship quality. The offer of reparations component produced lower levels of anger and higher levels of empathy. Both the promise of forbearance component and the offer of reparations component improved stakeholder's behavioral intentions toward the organization. However, effect sizes were generally small.

None of the apology components significantly affected attributions of responsibility. Also, feelings of empathy had a small negative effect on behavioral intentions. Overall the best predictor of account acceptance, organizational reputation, attribution of responsibility, post-crisis relationship quality, anger, and empathy was not the apology but the quality of the organization-stakeholder relationship before the crisis. The best predictor of behavioral intentions was the quality of the relationship after the crisis.

Nine apology components emerged from the qualitative data. A typology was developed to classify these components based on whether they were intended primarily to (1) fix problems or (2) rebuild relationships, and whether they were primarily based on (a) words or (b) behaviors.

The category of words that fix problems (1a) included acknowledging responsibility, offering explanations, and telling stakeholders what actions they could take to protect themselves in the crisis. The category of behaviors that fix problems (1b) was comprised of three types of corrective action: mitigating harm, offering reparations, and preventing future recurrences. The category of words that rebuild relationships (2a) contained expressions of genuine remorse, identification with stakeholders, and requesting another chance. The category of behaviors that rebuild relationships (2b) included providing compensation and fostering personal communication.

Overall, the three studies conducted for this dissertation demonstrated that stakeholders do recognize expressions of remorse, acknowledgements of responsibility, promises of forbearance, and offers of reparation as possible components of an effective organizational apology. However, stakeholders do not require all four components to be present for an apology to be effective, nor do they limit apology components to these four. In particular, behaviors such as taking corrective action and providing compensation appear to be important parts of effective organizational apologies.

This dissertation concludes that an effective organizational apology, from the stakeholder perspective, is comprised of a combination of words and behaviors that fix problems and repair relationships. In some cases, behaviors can even take the place of words for communicating the apology. However, organization-stakeholder relationships have a much greater effect on stakeholder reactions to a crisis than the way organizational apologies are constructed.

This dissertation contributes to public relations and crisis communication theory by offering a stakeholder perspective on organizational apologies that challenges the way many scholars have operationalized organizational apologies. Important differences between interpersonal and organizational apologies are identified, as well. Finally, the results highlight the importance of building good relationships with stakeholders before a crisis in order to improve outcomes after a crisis.

For practitioners, this dissertation provides insight into what stakeholders look for in organizational apologies so that organizations can formulate more effective apologies in crisis situations. The findings suggest that organizations may be able to offer effective apologies even when they cannot directly accept responsibility for a crisis. Ultimately, the best way for an organization to repair its image and rebuild its relationships after a crisis is to build a strong image and strong relationships before the crisis.