Mitigating Reputational Damage in Corporate Crises: An Examination of Apology Strategies

Introduction

Every organization will experience soon or later a crisis impacting the organization’s operations and potentially damaging its reputation. Crisis threatens stakeholders’ expectations about how an organization should act and may result in the questioning of the organization’s legitimacy, affect how stakeholders interact with the organization and damage the organization’s reputation intended as: “a global perception of the extent to which an organization is held in high esteem or regard.” (Weiss et al., 1999, p. 75). Because reputation is crucial to an organization's success and enables the development of strong relationships with stakeholders, the use of communication strategies to help organizations managing threats to reputation is being deeply studied by scholars (Coombs, 2004). Apologies are a particular type of crisis response strategy and the debate concerning its components and beneficial implications is evolving in the literature (Bentley, 2015). Organizational apologies can enhance a company's reputation by benefiting stakeholders and empathizing with the victims through the expression of sympathy. Although they may not be able to completely restore the harm brought on by a crisis, apologies can help victims find peace and enhance an organization's reputation as they represent conciliatory gestures frequently implied by individuals to de-escalate confrontations (O’Connor, 2011). Nevertheless, when it comes to organizational apologies, the discussion often focuses on the legal dimension of apologies and the associated financial costs. The debate regarding apology as a crisis response strategy lacks clarity concerning the specific elements characterizing an effective apology and focusing in particular on the need to include the acknowledgment of responsibility by the organization in order to fully benefit from the reputational advantages of apologies (Benoit, 2015). Indeed, since an apology involving a simple expression of sympathy requires a different commitment from one requesting the organization to admit its guilt, often referred as full apology (Patel & Reinsch, 2003), we lack full understanding on the possible similar or different effects that different categories of apologies may have on protecting the organization’s reputation and on stakeholders' behavioral intentions.

As a remedy, this chapter seeks to investigate the effectiveness of different categories of apologies in a specific crisis scenario in which the organization is perceived as highly responsible for the crisis, in protecting the corporate reputation of a company.

In doing so, this research provides insights on the effects of these crisis response strategies in a crisis scenario in which the company is directly accused by news media of causing an internal crisis within the organization.