The High Value
of a Perfect Business Apology
Peter F. Goolpacy, PhD
The value of a business apology can actually be measured. In fact, the willingness of wronged parties to
accept an offer of reconciliation, even one that comes with a significant loss in revenue, is considerably
higher if and when an apology is forthcoming.
The key is an apology, according to a recent business research study, but not
any apologywhen the ingredients
of a perfect business apology are met, the probability of reconciliation rises considerably.
A major research project by Edward C. Tomlinson, Brian R. Dineen and Roy J. Lewicki, published in the
Journal of Management,
confirms many of the most important recommendations perfect apology offers throughout our
The researchers selected 90 graduate business students with an average of six years of work experience. The respondents
ranged in age from 23-46, roughly half male and half female. Each respondent was asked to consider his/her reaction to 48
different scenarios involving a business transaction.
As the researchers explain,
"we presented background information to
each participant that described a negotiation situation between two small business owners. In this background information,
a violation in a negotiated agreement was described, along with supporting financial loss figures suggesting a high or
low magnitude of violation." (p. 175)
To explore the conditions under which the respondents were more/less likely to reconcile, the
business research study examined several
variablesthe nature of the apology (accepted responsibility or passed blame),
the timeliness of the apology (immediate or delayed),
perceived sincerity, the nature of the prior relationship (good or poor),
the probability of future violation (likely or not likely to happen
The following is an example of one of the 48 scenarios respondents considered before stating whether they would terminate the business relationship or reconcile:
"You and Pat have had a good business relationship in the past. After Pat told you about the reduced order, Pat did not seem to be in much of a hurry to explain the adjustment. When Pat apologized, Pat said it was not controllable and was due to business dropping off. It appeared that this apology was sincere. After thinking about Pats behavior, you decided that this is probably an isolated event."
After reading each of the 48 scenarios, the respondents were asked to
rate the likelihood of continuing to work with the customer, and their
willingness to reconcile was determined by their answers to the
following types of questions:
What is the likelihood that you would continue a
business relationship with Pat?;
To what degree are you willing to let Pat try to reconcile the
relationship with you, given Pats actions?;
How difficult would it be to rebuild your relationship with Pat back to
the point where it was before Pat changed the order?
The results and major findings of the business research study are depicted
in figure 1 below.
The model illustrates the typical path through which offenders can
rebuild trust in a business relationship damaged by a serious and costly
business infraction. The value of the apology, if it succeeds, can be
measured by the willingness of the victim to reconcile
essentially accepting the losses and moving on.
Tomlinson, Dineen and Lewicki have found that most companies are likely
to terminate a business relationship following a serious infraction, and
usually refuse to reconcile because of the lost revenues. But this
business research has shown that the probability of reconciliation is higher if
an apology is forthcoming, even in cases where losses are great.
The findings also confirm that that "sincerity" produced one of the
strongest main effects"sincerity magnified the beneficial effect of
an apology....Efforts to simply placate the victim following a
transgression may yield dim prospects, whereas sincere apologies are
more effective regardless of the attribution given in the apology."
The business research data
led to the following conclusions, all of which convey several obvious
practical business implications:
1. "Offenders should always give an explicit apology in the wake
of a trust violation." Most victims expressed appreciation after
receiving an apology and were far less likely to reconcile in the
absence of one.
2. In addition to issuing a formal
apology, business research also found that "offenders should strive to
respond in a timely manner that conveys sincere regret for the harm
imposed on the victim." A relatively quick and sincere apology is
crucial to success.
3. To the extent that the offender accepts "personal culpability for a
violation" the victim is more likely to accept the apology and move on
to reconciliation. But the study also shows that repeated apologies
often backfireeven apologies that accept personal responsibility
"may be likely to diminish the perceived effectiveness because the
offender may not appear to be sincere." The lesson here is that
credibility, and important component of any business relationship, is a
function of how selective and sincere the apology appears to be.
4. Consistent with a key ingredient of perfect apologies, the
business research data also
demonstrates that some form of restitution helps"Offenders are urged
to seek out ways to minimize the harmful impact of the violation on the
victim. Severe violations are difficult to reconcile, and they may
prompt the victim to scrutinize the past relationship history more
carefully when assessing their willingness to reconcile." The
implications are obviouscreating, sustaining and nurturing a long
and healthy business relationship is the best foundation for dealing
with the occasional mishap. In these cases an apology is likely to be
much more believable and effective.
5. Finally, "offenders should consider the complete context of their
relationship history with their colleagues. Actions of the past and an
awareness of the victim's expectations about what will take place in the
future will heavily impact willingness to reconcile, and may override
the impact of any short-term reconciliation tactics." Their
business research found that a promise that
serious efforts will be made to avoid similar infractions in the future,
along with some form of restitution or payback, will go a long way to
re-establishing confidence and trust.
According to Tomlinson, "there's
a tension when you have hurt someone in a business relationship. We know
that giving an apology and taking blame may help the victim.... Long
before any violation arises, business people need to be laying the
groundwork for a good, healthy relationship. A good previous
relationship can do as much to help repair damage from a failed business
deal as any apology." 2
business research study pertaining to
perfect business apologies.
Or, return to
The Road to Reconciliation: Antecedents of Victim Willingness to
Reconcile Following a Broken Promise, by Edward C. Tomlinson, Brian
R. Dineen and Roy J. Lewicki. Journal of Management, 2004 30 (2)
2 Quoted in an
interview with Jeff Grabmeier (June 1, 2004) -- http://researchnews.osu.edu/archive/bustrust.htm)