Heads will roll! Routes to effective trust repair in the aftermath of a CEO transgression

CEO transgressions are a common storyline in today's business press. Such incidents result in the need to repair trust for both the CEO and the organisation that the CEO leads. Existing empirical research on trust repair has focused primarily on interpersonal trust, resulting in a body of knowledge that provides many insights to the errant CEO but few insights for those who aim to repair trust in the organisation. Since organisations also need to regain the trust of stakeholders after a CEO transgression, research on organisational trust repair is clearly warranted. Organisations have options for trust repair that are not available to individuals (e.g. dismissing the transgressor), these actions may be initiated by parties other than the culpable party (e.g. the Board of Directors), and the mechanisms underlying organisational versus interpersonal trust repair may differ. However, trust in CEOs and their associated organisations may also be intertwined since the CEO is the symbolic representative of the organisation. To better understand how organisations and CEOs can repair trust in the aftermath of a CEO transgression, we conduct a scenario experiment examining two tactics that are commonly used in practice: CEO dismissal, and CEO apology + penance. We also examine the proposed underlying mechanisms of perceived repentance and perceived disentitativity. Results indicate that both tactics can influence trust in the CEO as well as the organisation, and that perceived repentance and perceived disentitativity mediate the effects of Board responses on trust in the CEO but not on trust in the organisation

Trust \u3ci\u3eThe Key to Leading When Lives Are on the Line\u3c/i\u3e

The Hostage Rescue Team (HRT) of the Federal Bureau of Investigation was called in to assist the bureau\u27s Special Weapons and Tactics (SWAT) team in Memphis to apprehend a married couple wanted on drug trafficking charges. The fugitive couple and an adult son, all with criminal records, were believed to be living in trailers in a mountain valley where outsiders would be easily noticed. The fugitives were known to stockpile weapons and had vowed never to be taken alive by law enforcement. Thus the FBI considered them to be armed and extremely dangerous. Two HRT snipers along with two SWAT snipers were given the mission of positively identifying the fugitives and providing security and containment for the assault force. The snipers would have to travel several kilometers through wooded, mountainous terrain using night vision goggles (NVGs). The SWAT snipers did not have nighttime, overland movement capability, which is why HRT was brought in

Understanding the change and development of trust and the implications for new leaders

Leaders, particularly new leaders, seek to establish high levels of trust, as it has been associated with higher levels of effectiveness and group outcomes. This study is designed to understand how trust changes and develops for leaders in a new role and the implications of that change. Although calls for research on trust over time have been made for the past 2 decades, our knowledge of this phenomenon is still quite limited. The findings indicate that leader and unit performance is a function not only of absolute trust level, but is also affected by the direction and magnitude of change in trust across time periods, with the highest levels of effectiveness being associated with leaders who exhibited an increase in trust from the group over time. The data also suggest that the direction and rate at which trust grew was determined by initial expectations and transformational leadership behaviors.Peer reviewedBusines

Silence Speaks Volumes: The Effectiveness of Reticence in Comparison to Apology and Denial for Repairing Integrity- and Competence-Based Trust Violations

Prior research on responses to trust violations has focused primarily on the effects of apology and denial. The authors extended this research by studying another type of verbal response that is often used to respond to trust violations but has not been considered in the trust literature: reticence. An accused party may use reticence in a sincere and even legitimate attempt to persuade a trustor to withhold judgment. Yet, by considering information diagnosticity and belief formation mechanisms through which verbal responses influence trust, the authors argue that reticence is a suboptimal response because it combines the least effective elements of apology and denial. Specifically, reticence is a suboptimal response to an integrity violation because, like apology, it fails to address guilt. And reticence is a suboptimal response to a competence violation because, like denial, it fails to signal redemption. Results from 2 laboratory studies, simulating different contexts and using research participants from 2 different countries, provide support for the prediction. The results offer important implications for those who might use reticence to respond to a perceived trust violation and also for those who must judge another's reticence

Repairing Trust with Individuals vs. Groups

► We investigate how trust repair might differ with groups vs. individuals. ► Repairing trust is generally more difficult with groups than individuals. ► Both individuals and groups trust less after denying low competence or apologizing for low integrity. ► But the relative difficulty of trust repair w/ groups vs. individuals also depends on interaction. ► Ensuing group assessments affect initial individual assessments but not the reverse. This study incorporates insights from research on group decision-making and trust repair to investigate the differences that arise when alleged transgressors attempt to regain the trust of groups as compared to individuals. Results indicate that repairing trust is generally more difficult with groups than individuals, and both groups and individuals were less trusting when trustees denied culpability (rather than apologized) for a competence-based violation or apologized (rather than denied culpability) for an integrity-based violation. However, the interaction of violation-type and violation-response also ultimately affected the relative difficulty of repairing trust with groups vs. individuals, with the greater harshness of groups dissipating when the transgressors’ responses were effectively matched with the type of violation. Persuasive argumentation rather than normative pressure, furthermore, mediated these differences. Thus, the sequencing of individual vs. group assessments mattered, such that subsequent group assessments affected initial individual assessments but not the reverse

Removing the Shadow of Suspicion: The Effects of Apology Versus Denial for Repairing Competence- Versus Integrity-Based Trust Violations

Two studies were conducted to examine the implications of an apology versus a denial for repairing trust after an alleged violation. Results reveal that trust was repaired more successfully when mistrusted parties (a) apologized for violations concerning matters of competence but denied culpability for violations concerning matters of integrity, and (b) had apologized for violations when there was subsequent evidence of guilt but had denied culpability for violations when there was subsequent evidence of innocence. Supplementary analyses also revealed that the interactive effects of violation type and violation response on participants' trusting intentions were mediated by their trusting beliefs. Combined, these findings provide needed insight and supporting evidence concerning how trust might be repaired in the aftermath of a violation