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Saving face? When emotion displays during public apologies mitigate damage to organizational performance

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  • ten Brinke, Leanne
  • Adams, Gabrielle S.

Abstract

In the wake of corporate transgressions and scandals, how do apologizers’ expressed emotions affect investors’ perceptions of the organization in question? We analyzed the market effects of normative versus deviant facial affect expressed during apologies for corporate wrongdoing. Archival data revealed that the expression of deviant affect was associated with decreased investor confidence in the form of negative stock market returns; adverse financial effects persisted up to three months post-apology. Moreover, this effect was exacerbated when a company representative with greater responsibility within the organization delivered the apology. Experimental data further revealed that third parties interpreted deviant affect (smiling) as a signal of insincerity, which reduced their confidence in these representatives’ organizations. Ultimately, we find that subtle emotion expressions are detected by stakeholders, signal insincerity, and have important consequences for organizations. We suggest that organizations must carefully consider the nonverbal behavior of apologetic representatives in the wake of transgressions.

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  • ten Brinke, Leanne & Adams, Gabrielle S., 2015. "Saving face? When emotion displays during public apologies mitigate damage to organizational performance," Organizational Behavior and Human Decision Processes, Elsevier, vol. 130(C), pages 1-12.
    • Handle: RePEc:eee:jobhdp:v:130:y:2015:i:c:p:1-12
    DOI: 10.1016/j.obhdp.2015.05.003
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    1. Hornsey, Matthew J. & Chapman, Cassandra M. & La Macchia, Stephen & Loakes, Jennifer, 2024. "Corporate apologies are effective because reform signals are weighted more heavily than culpability signals," Journal of Business Research, Elsevier, vol. 177(C).
    2. Yang, Hongyan & Xu, Hong & Zhang, Yan & Liang, Yan & Lyu, Ting, 2022. "Exploring the effect of humor in robot failure," Annals of Tourism Research, Elsevier, vol. 95(C).
    3. Schoofs, Lieze & Claeys, An-Sofie, 2021. "Communicating sadness: The impact of emotional crisis communication on the organizational post-crisis reputation," Journal of Business Research, Elsevier, vol. 130(C), pages 271-282.
    4. Marie Racine & Craig Wilson & Michael Wynes, 2020. "The Value of Apology: How do Corporate Apologies Moderate the Stock Market Reaction to Non-Financial Corporate Crises?," Journal of Business Ethics, Springer, vol. 163(3), pages 485-505, May.
    5. Clarke, Samuel L. & Rhodes, Eric S., 2020. "Entrepreneurial apologies: The mediating role of forgiveness on future cooperation," Journal of Business Venturing Insights, Elsevier, vol. 13(C).
    6. Li, Yi-Na & Li, Yan & Chen, Haipeng (Allan) & Wei, Jiuchang, 2023. "How verbal and non-verbal cues in a CEO apology for a corporate crisis affect a firm’s social disapproval," Journal of Business Research, Elsevier, vol. 167(C).
    7. Prithwiraj Choudhury & Dan Wang & Natalie A. Carlson & Tarun Khanna, 2019. "Machine learning approaches to facial and text analysis: Discovering CEO oral communication styles," Strategic Management Journal, Wiley Blackwell, vol. 40(11), pages 1705-1732, November.
    8. Michael J. Wynes, 2022. "“Just Say You’re Sorry”: Avoidance and Revenge Behavior in Response to Organizations Apologizing for Fraud," Journal of Business Ethics, Springer, vol. 178(1), pages 129-151, June.
    9. Liu, Eping & Qin, Haoyuan, 2024. "Can managers’ facial expressions predict future company performance and risk? Evidence from China," Finance Research Letters, Elsevier, vol. 59(C).
    10. Haiying Wei & Yaxuan Ran, 2019. "Male Versus Female: How the Gender of Apologizers Influences Consumer Forgiveness," Journal of Business Ethics, Springer, vol. 154(2), pages 371-387, January.
    11. Zhanghong Xu & Alan Yan, 2020. "A Pragmatic Study of Image Restoration via Corporate Apology in Chinese Internet Corporations," English Language Teaching, Canadian Center of Science and Education, vol. 13(6), pages 1-76, June.
    12. Ma, Ruijing & Wang, Weisha, 2021. "Smile or pity? Examine the impact of emoticon valence on customer satisfaction and purchase intention," Journal of Business Research, Elsevier, vol. 134(C), pages 443-456.
    13. Shahin Rasoulian & Yany Grégoire & Renaud Legoux & Sylvain Sénécal, 2017. "Service crisis recovery and firm performance: insights from information breach announcements," Journal of the Academy of Marketing Science, Springer, vol. 45(6), pages 789-806, November.
    14. Elias L Khalil & Nick Feltovich, 2018. "Moral licensing, instrumental apology and insincerity aversion: Taking Immanuel Kant to the lab," PLOS ONE, Public Library of Science, vol. 13(11), pages 1-24, November.
    15. Ding, Rui & Guo, Jintong & Zhang, Min, 2024. "Practice a poker face: Manager emotion and investor sentiment," Pacific-Basin Finance Journal, Elsevier, vol. 85(C).

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