Corporate Apologies Research Articles

Corporate apologies are effective because reform signals are weighted more heavily than culpability signals

We report two pre-registered experiments (N = 1,410) designed to provide the first examination of the relative weight consumers give the culpability and reform signals of corporate apologies. Participants read accusations that a company had used a morally dubious supplier. Compared to statements that denied responsibility, apologies increased perceptions of both culpability (that the organization was responsible for the transgression) and of reform (that the organization was unlikely to repeat the transgressions in the future). However, reform signals had stronger impacts on consumer trust and consumer support than culpability signals. Because of this, the net effect of the apology on trust and consumer intentions was generally positive relative to a no-responsibility message and a no-information control condition. Results suggest corporations embroiled in a public scandal will benefit overall from issuing a corporate apology, which should help restore consumer support.

Investor reactions to apologies for financial misconduct

We conduct three experiments to examine the implications of corporate apologies on investors' reactions to allegations of financial misconduct. In Experiment 1, we manipulate whether the firm apologizes or denies the misconduct. Additionally, we manipulate how the firm apologizes for (denies) the misconduct by comparing “basic” response strategies (i.e., responses containing nothing more than a simple apology or denial) with “full” response strategies (i.e., responses containing additional elements, such as explicitly naming the misconduct). We find that investors are less willing to invest when the firm apologizes than denies it. Using mediation analysis, we find that when investors observe an apology, they attribute more responsibility to the management for the events, leading to a lower perception of credibility and a higher perception of litigation risk, ultimately affecting their investment judgment. Our results do not provide evidence that more extensive responses affect investors differently than more basic apologies or denials. In Experiment 2, we investigate self-disclosure as a potential strategy for firms to mute investors' negative reactions to apologies. Our results replicate the findings of Experiment 1. However, we do not find evidence that management can attenuate the adverse effects of apologizing for misconduct by self-disclosing the misconduct. In Experiment 3, we separate whether the apology includes an acceptance of responsibility or not and whether there is subsequent evidence of guilt or evidence of innocence. Surprisingly, investors do not react more favorably to apologies (with or without acceptance of responsibility) than denials, even when evidence substantiates the allegations. Overall, our study demonstrates that it is difficult for managers to attenuate the negative effects of financial misconduct on investors’ perceptions with apologies.

A Contrastive Study on Image Repair Strategies in Chinese and American Corporate Apologies

Nowadays, frequently-happening wrongdoings have seriously damaged the corporate image and threatened the survival of corporations. For companies in crises, an appropriate apology has become a vital strategy to repair corporate image. Remarkable achievements have been made in the contrastive study of corporate apologies, but there is still much to be explored about Chinese and American corporate apologies. Therefore, this paper investigates the differences of the image repair strategies employed in Chinese and American corporate apologies, in order to help corporations handle crises in a cross-cultural context. With AntConc 2019, the paper first analyzes the major linguistic devices in 100 Chinese and American corporate apologies, and then finds out the differences of image repair strategies and the underlying factors through qualitative analysis, based on Benoit’s image repair strategies and Adaptation Theory. The results show that (1) Chinese companies show their solemnity and sincerity in the crisis through person deixis such as company and customer and strengtheners such as again, seriously and first time, while American companies use more demonstrative pronouns like this, these and it, and politeness words like please, hope and thank to mitigate crisis conflicts. Meanwhile, when providing compensation and follow-up services, American ones would use if-conditionals to control the cost of the apology. (2) Reducing offensiveness and Mortification are the two most commonly used strategies, respectively accounting for 37.7% and 36.3%. In mortification, asking for forgiveness is often used in American corporate apologies (11.3%), while accepting the blame is more common in Chinese corporate apologies (11.1%). When reducing offensiveness, Chinese corporations would choose bolstering (20.9%) and transcendence (10.5%), while American ones prefer compensation (17.6%) and valuing the customer (13.9%). (3) Chinese culture emphasizes collectivism and high-power distance, while American culture emphasizes individualism and low-power distance, which accounts for the difference of image repair strategies in Chinese and American corporate apologies. This paper can act as a complement to the contrastive research on American and Chinese corporate apologies and provide references for corporate communication in a cross-cultural context.

A Pragmatic Study of Strategies for Crisis Communication in the Announcements Made by Chinese Listed Pharmaceutical Enterprises

Drug safety issues have grown increasingly common in China and have been much concerned by the public, having exerted a huge impact on the development and survival of related pharmaceutical enterprises. Consequently, the involved corporations have to respond properly to the crisis with a view to not only resume the corporations’ operation but also rebuild the public’s confidence in the pharmaceutical industry. Although scholars have conducted abundant research on corporate apologies, announcements, a quasi-apology or a substitute for apologies, as a common way to respond to crises in China, have not gained due attention from academia. Therefore, the paper intends to analyze components of Chinese pharmaceutical enterprises’ announcements and pragmatic strategies employed herein for better elucidating the formation of announcements and highlighting the role of announcements in managing crises. Based on Boy’s (2011) seven apology components and Xu’s (2021) pragmatic strategy set, qualitative research is carried out. It is found that, unlike conventional apologies, six components are identified in the announcements and corresponding pragmatic strategies conducive to managing crises are explored: (1) revelation: explanation (blunt statement); (2) responsiveness: timeliness (attitudinal meaning devices); (3) responsibility: internal attribution and external attribution (grounders); (4) remorse: guilt (IFID); (5) reform: change (attitudinal meaning devices, hedges and vagueness) and (6) impact on operations: minor impact, huge impact and undetermined impact (blunt statement, hedges and vagueness). The findings would not only shed light on research on corporate crisis communication, but also provide the practitioners with some insights into how to issue the announcements.

A Pragmatic Study of Corporate Apologies for Impression Management: A Case of Chinese Food Industry

Some of Chinese corporations in food industry have recently faced sharp criticism for their illegal operation or unethical behavior. To deal with such crisis, these corporations are inclined to manage their public impressions by issuing apology statements. Serious as these problems are, yet scarce research has focused on the impression management of Chinese corporations through apologies. This paper aims to make a pragmatic analysis of apology strategies employed by Chinese food companies for impression management, drawing upon the framework of Jones and Pittman’s (1982) impression management strategies and Blum-Kulka and Olshtain’s (1984) theory of CCSARP. Based on a self-built corpus of 50 apology statements issued by Chinese food companies, the paper identified different apology strategies and their accompanying linguistic features through discourse analysis. The results show that IFIDs and offer of repair are two of the most common strategies in Chinese corporate apologies, whereas taking on responsibility is less frequently used. The apology strategies are often accompanied with such linguistic features as person deixis, honorifics, intensification and repetition. Chinese companies adopt these diverse apology strategies and linguistic features for the sake of impression management, which is realized by using such strategies as ingratiation, self-promotion, exemplification and supplication. Finally, the paper provides insights into the understanding of crisis management and corporate communication practice online.

Sorry Doesn't Cut It, or Does It? Insights from Stock Market Responses to Corporate Apologies

This paper examines the stock market reaction to corporate apologies. We construct a comprehensive database of corporate apologies issued for major chemical disasters between 1985 and 2017. Results from event studies and cross-sectional regressions suggest that 1) on average there is no significant stock market response after a firm apologizes; but when we allow for heterogeneity in the type of apologies, we find that 2) some apologies are associated with significant abnormal returns. In particular, firms that shift the blame to others consistently experience positive abnormal returns, while firms that admit to making mistakes tend to face negative stock market reactions in the longer-term. Greater media coverage for the chemical spill and the apology is associated with a negative and positive stock market response, respectively. Our findings are consistent with a signaling theory of apologies and help shed light on corporate crisis management and understanding of what makes an effective apology.

Toward a theory of corporate apology: mechanisms, contingencies, and strategies

Purpose Corporate apologies, relative to other responses to well-publicized past transgressions, have distinct implications, sparking a rich tradition of apology research. But in addition, each apology is unique, such that it becomes critical to address individual content (what), spokesperson (who), timing (when) and delivery (how) elements. This paper aims to clarify how people evaluate key apology elements (individually and collectively) and the associated trade-off between short-term risks (e.g. business costs) and long-term benefits (e.g. relational assets), in light of key contingency factors that represent the level of the transgression-related threat to the firm. Design/methodology/approach An in-depth conceptual review, analysis and synthesis of corporate apology theories, research, business practices and case examples underlie the development of a conceptual framework that features 6 key tenets and 16 formal, testable propositions. Findings The holistic apology framework details how and why different corporate apology elements individually and collectively influence firm performance, in the presence of key transgression-related factors. The outlined tenets and propositions, in turn, provide clear guidelines for how to design and implement effective corporate apology strategies in response to publicized transgressions, as well as a platform for academics to advance research in this domain. Research limitations/implications This paper contributes to apology theories by proposing 6 key tenets and 16 formal, testable propositions, incorporating apology mechanisms, contingencies and strategies (i.e. corporate apology typology), thus providing a more comprehensive view of corporate apologies in the marketing discipline. Practical implications This paper introduces 6 official tenets and 16 associated propositions that collectively (and interactively) serve as strategic guidelines for managers and opportunities for academics to advance research in this domain. Originality/value The proposed conceptual framework offers a novel, holistic understanding of the fundamental components of a corporate apology.

Role identity tactics of CEOs in public apologies on twitter and user sentiments

ABSTRACT The public statements of CEOs (such as apologies) should be periodically evaluated to understand the role identity tactics of the CEOs play in navigating through a crisis. While a CEO may exhibit many distinct role identities, studies on the specific identity that is dominant and activated in a crisis are lacking. Thus, we adopted a deductive, qualitative, and interpretive approach, employing content analysis to examine how 30 CEOs apologised on social media to manage organisational identity. We also used the well-tested and reliable typology of image restoration strategies, along with the Koehnian Framework for Assessing the Ethics of Corporate Apologies as theoretical anchors. The results provided two CEO apology categories (the public relations style or personal style) and four discrete identity apology tactics: Humility, caretaker, problem solver, and defensive. Our findings and role-enactment strategy are relevant to both corporate communication managers and CEOs who wish to be more persuasive in their apologies for faster and more positive results.

What consumers really feel about corporate apologies. A discourse analysis of reactions to apologies on economic and financial scandals in tweets

The economic, financial and environmental crises that have involved many international companies over the past twenty years have been the concern of various disciplines, e.g. Genre Studies (Rutherford 2005; Zanola 2010), Critical Discourse Analysis (Howcroft 2012) and Crisis Communication (Coombs and Holladay 2012). Interestingly, the number of studies carried out in these academic areas have paid attention to the linguistic and discursive strategies adopted by managers to persuade their audience to trust them. In particular, they have focused on apologia and apology as activities of trust-building, while neglecting the audience’s actual reactions to corporations’ suasive attempts. These responses are remarkable in blogs, social networks, and other forms of Computer-Mediated Communication (CMC) genres (Puschmann 2010). Adopting an approach which integrates Computer-Mediated Discourse Analysis (Herring 2001; Androutsopoulos, Beiswenger 2008), Critical Discourse Analysis (Fairclough 2003; van Dijk 2006) and Pragmatics (Austin 1962; Searle 1975), the paper focuses on the perlocutionary acts enacted in blogs, tweets and user-generated articles that respond to corporate apologies. In particular, it investigates how corporate scandals and wrongdoings are experienced by readers. To achieve this goal, the paper is carried out on a corpus consisting of tweets disputing the Volkswagen (VW) diesel scandal over the period 2015 to 2017. Findings show that customers tend to react with anger, disappointment and irony to the crisis communicative stances enacted by the VW management.

A Multimodal Critical Discourse Analysis of Corporate Apologies by Starbucks CEO from the Perspective of Crisis Management

From the perspective of crisis management, this research examines how Starbucks chief executive officer (CEO) extended corporate apologies to the stakeholders via an interview video and a monologue video under the framework of multimodal critical discourse analysis (MCDA). The apologies offered by Starbucks CEO in an interview with ABC News and a monologue were analyzed to illustrate textual, and visual characteristics. The analysis of text, discourse practice and social practice was conducted to explore apology discourse strategies employed by Starbucks CEO. The results indicated that corporate apology discourse contributes to crisis management and revealed the interplay of corporate apology discourse, crisis management, and social background.

A Discursive Analysis of Crisis Response Strategies in CEO Apologies—Drawing on Linguistic Insights from the Appraisal Framework

When corporations are confronted with a crisis, well-crafted CEO apologies can serve to repair, restore, and rebuild a damaged corporate image. In prior research, the use of linguistic resources exhibited in CEO corporate apology discourse for different crisis response strategies has not been sufficiently examined. Drawing on the appraisal framework and subsumed linguistic resources, this study analyzed the discursive construction of crisis response strategies in the corporate apology discourse of leading companies listed in the Fortune Global 2000. The findings revealed an integrated use of crisis response strategies in which attitude appraisal resources predominated, while different types of appraisal resources were deployed in various crisis response strategies to achieve rhetorical persuasion in corporate communication. The proposed framework integrating crisis response strategies in CEO apology discourse with appraisal resources could guide CEOs and crisis communicators to use the right words when composing corporate apologies.

“We Are Deeply Sorry”: Chinese Corporate Apologies Posted on Weibo

The present study focuses on the components of Chinese corporate apologies by adopting both quantitative and qualitative methods. The investigation is based on 25 corporate apology statements posted on Weibo, one of the most popular social media platforms in China. The results indicate that two apology components, namely explicit apology and offer of repair, are more salient than others, and more than half of the apology statements contain the components of explanation and taking on responsibility, while the use of another two components which include promise for forbearance and expression of sorrow depends on the severity of the offensive act. In addition, apologies made by Chinese companies via Weibo are realized through various linguistic means, such as IFIDs, intensifiers, commissives, appraisal resources, presupposition and metadiscourse (attitude markers, boosters and code glosses). Hopefully, this study might provide insight into future research on corporate apologies and how to restore corporate images in crisis communication.

Do Investors Care about Corporate Apologies? Evidence from Chemical Disasters

This paper examines the stock market reaction to corporate apologies. We construct an extensive database of corporate apologies issued for major chemical disasters between 1985 and 2017. Results from event studies and cross-sectional regressions suggest that 1) the average effect of an apology does not affect the implicated firm’s stock price; but 2) the type and timing of the apology are associated with significant abnormal returns. In particular, firms that shift the blame to others consistently experience positive abnormal returns, while firms who admit to making mistakes tend to face negative stock market reactions in the longer-term. Greater media coverage for the chemical spill is associated with a negative stock market response while greater coverage for the apology is associated with a positive stock market response. Our results have practical implications for corporate crisis management and our understanding of what makes an effective apology.

#sorrynotsorry: A Teaching Module on Advertising Errors in the Digital Age

Abstract: In this essay, I outline strategies for a teaching module on corporate advertising errors, with a focus on the relationship between social media reactions, corporate apologies, and subsequent responses and long-term effects. I demonstrate how we read five key problematic advertising texts from Abercrombie & Fitch, Pepsi, H&M, Bud Light, Heineken, and Dove in consonance with one another. We then divide up into groups to track the life cycle of the corporate reaction-apology-response scenario in which there is a widespread negative reaction to an ad; the company apologizes and outlines possible steps for change; there is a social media evaluation of the apology; and, in some cases, key individuals involved in the text engage in the discussion. Students are empowered to develop expertise around one case and teach their colleagues, leading to a rich group discussion thinking about these ads together. In the final part of the essay, I briefly discuss a second class session in which we categorize the kinds of transgressions these advertisements embody, from racism to misogyny to anti-Semitism. We use these typologies to gain insight into the relationship between the kinds of errors showcased in ads and the nature of the response to them, thinking both within and across categories.

A Contrastive Study of Image Repair Strategies Between Chinese and English Corporate Apologies

In the era of globalization, social media have become important communication tools for enterprises in crisis. Corporate apologies are issued via social media to repair the tarnished corporate image, which might affect their survival. However, the way of apologizing varies from language/culture to language/culture. This study aims to investigate how Chinese and English corporate apologies are linguistically presented and to explore how damaged corporate image in different culture is repaired respectively. Under the framework of Benoit’s image repair strategies and CCSARP, and based on quantitative and qualitative analysis of the collected data, this paper makes a contrastive study of Chinese and English corporate apologies. The results show that Chinese and English corporate apologies share great similarities in using the strategies of mortification and corrective actions, while they are different in terms of other specific tactics such as bolstering, good intentions, defeasibility and minimization. It is also found that the denial is the least used strategy by both Chinese and English corporations to repair their tarnished image. Furthermore, they are quite t similar in using IFIDs, while intensifiers and hedges are more frequently employed in Chinese corporate apologies.

The Neurophysiology of Corporate Apologies: Why Do People Believe Insincere Apologies?

CEOs typically offer apologies after transgressions are discovered whether mistakes were corrected or not. Seemingly insincere apologies, however, may damage the company by impugning its reputation. This study uses neurophysiologic data to identify why people believe apologies and identify when resolutions have occurred. Participants watched videos of corporate apologies and earned $3 for each video they watched. They could wager any of their earnings on whether the mistake was resolved with a chance to double their money. Participants could not consciously identify problem resolution, but the similarity of electrodermal activity and a measure of sympathetic and parasympathetic switching could with 61.3% accuracy ( p = .001). Wagers were unrelated to whether problems were resolved or not. Yet electrodermal activity components predicted whether a wager was made with 75% accuracy ( p = .001). Analysis of physiologic data showed that when leaders identify the problem in an opening statement, address the audience directly, use concrete language to describe how the company will remedy the problem, and minimize the harm done, physiologic arousal is reduced, signaling that the problem will be resolved. Our analysis shows that people believe insincere apologies when the statements made, whether truthful or not, produce a calming effect in listeners.

Never easy to say “sorry”: Exploring the interplay of crisis involvement, brand image, and message appeal in developing effective corporate apologies

This study examines how the interplay among crisis involvement, brand image, and message appeal impacts the effectiveness of an apology in the context of a corporate crisis. To determine apology effectiveness, a 2 (crisis involvement: high vs. low) × 2 (brand image: symbolic vs. functional) × 2 (message appeal type: emotional vs. informational) experimental design was employed. The results demonstrate that the three-way interaction is significant, especially in the low-crisis involvement condition. The study concludes with a discussion of theoretical and practical implications and directions for future research.

Evolution of corporate reputation during an evolving controversy

PurposeThe purpose of this paper is to investigate the evolution of online sentiments toward a company (i.e. Chipotle) during a crisis, and the effects of corporate apology on those sentiments.Design/methodology/approachUsing a very large data set of tweets (i.e. over 2.6m) about Company A’s food poisoning case (2015–2016). This case was selected because it is widely known, drew attention from various stakeholders and had many dynamics (e.g. multiple outbreaks, and across different locations). This study employed a supervised machine learning approach. Its sentiment polarity classification and relevance classification consisted of five steps: sampling, labeling, tokenization, augmentation of semantic representation, and the training of supervised classifiers for relevance and sentiment prediction.FindingsThe findings show that: the overall sentiment of tweets specific to the crisis was neutral; promotions and marketing communication may not be effective in converting negative sentiments to positive sentiments; a corporate crisis drew public attention and sparked public discussion on social media; while corporate apologies had a positive effect on sentiments, the effect did not last long, as the apologies did not remove public concerns about food safety; and some Twitter users exerted a significant influence on online sentiments through their popular tweets, which were heavily retweeted among Twitter users.Research limitations/implicationsEven with multiple training sessions and the use of a voting procedure (i.e. when there was a discrepancy in the coding of a tweet), there were some tweets that could not be accurately coded for sentiment. Aspect-based sentiment analysis and deep learning algorithms can be used to address this limitation in future research. This analysis of the impact of Chipotle’s apologies on sentiment did not test for a direct relationship. Future research could use manual coding to include only specific responses to the corporate apology. There was a delay between the time social media users received the news and the time they responded to it. Time delay poses a challenge to the sentiment analysis of Twitter data, as it is difficult to interpret which peak corresponds with which incident/s. This study focused solely on Twitter, which is just one of several social media sites that had content about the crisis.Practical implicationsFirst, companies should use social media as official corporate news channels and frequently update them with any developments about the crisis, and use them proactively. Second, companies in crisis should refrain from marketing efforts. Instead, they should focus on resolving the issue at hand and not attempt to regain a favorable relationship with stakeholders right away. Third, companies can leverage video, images and humor, as well as individuals with large online social networks to increase the reach and diffusion of their messages.Originality/valueThis study is among the first to empirically investigate the dynamics of corporate reputation as it evolves during a crisis as well as the effects of corporate apology on online sentiments. It is also one of the few studies that employs sentiment analysis using a supervised machine learning method in the area of corporate reputation and communication management. In addition, it offers valuable insights to both researchers and practitioners who wish to utilize big data to understand the online perceptions and behaviors of stakeholders during a corporate crisis.

The Value of Apology: How do Corporate Apologies Moderate the Stock Market Reaction to Non-Financial Corporate Crises?

In a crisis, managers are confronted with a dilemma between their ethical responsibility to respond to victims and their fiduciary responsibility to protect shareholder value. In this study, we use a unique and comprehensive dataset of 223 non-financial crises between 1983 and 2013 to investigate how corporate apologies affect stock prices. Our empirical evidence shows that the stock price response from apologizing depends on the firm’s level of responsibility for the crisis. We find that to protect shareholder value, management needs to match its formal response strategy with the degree of its responsibility for the crisis. Further, failing to match the proper response is harmful to shareholders: Both apologizing when the firm is not directly responsible for the crisis and failing to apologize when the firm is directly responsible reduce shareholder wealth. However, apologizing for a crisis when the firm is directly responsible mitigates losses to shareholder value that arise because of the crisis, as does refraining from apologizing when the firm is not directly responsible.

La disculpa corporativa a través de Twitter en Iberia y Banco Santander

En los últimos años las compañías han creado nuevos canales de atención al cliente sirviéndose de las distintas redes sociales, entre ellas Twitter. El objetivo de este trabajo es analizar cómo las compañías expresan sus disculpas a través de Twitter. Se propone un análisis lingüístico-discursivo de la disculpa corporativa, apoyados en la lingüística de corpus (Page, 2014) y la pragmática de la disculpa (Harris et alii, 2006). El análisis se aplicará a un corpus conformado por los 1567 tuits publicados durante la primera quincena de julio de 2017 por Iberia y Banco Santander; dos compañías que cotizan en el Ibex 35 y destacan por la atención al cliente ofrecida a través de este canal. Las dos compañías coinciden en una estructura común de tuits, así como en el reconocimiento directo o indirecto de la ofensa cometida; sin embargo, el Banco Santander frente a la compañía Iberia presenta un estilo más burocrático y alejado, omitiendo explicaciones.