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What Is an Apology?An apology, roughly speaking, is averbal exchange in which someonewho is perceived as having causedharm or offense to a second partyspeaks and behaves in a way thatallows for a future reconciliationbetween the offender and those heor she has harmed.
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What Is a CEO Apology?
• Two kinds:• An apology by a CEO for an offense personally
committed while in role of CEO of a firm(usually publicly traded)--e.g., Martha Stewart’sapology after being convicted for obstruction ofjustice
• An apology by a CEO (as representative of afirm) for an injury or harm the public attributesto the CEO’s firm--e.g., Tony Hayward’sapology after the British Petroleum DeepHorizon disaster.
Ethically Good Apology• A CEO/corporate apology is ethically good if it is structured so as
to restore trust between the CEO apologizer/CEO’s firm and theparties injured by the apologizer/firm.
• An apology need not actually restore trust to be ethically good.An ethically good apology is one that is, in principle, trustworthy.
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Three Caveats• An ethically good apology has a chance of
restoring trust because it is structured well,but it may not achieve this goal.
• For a speech act to qualify as an apology(good or bad), it is not necessary thatspeakers intend that their speech be anapology. What matters is that the audiencehears the speech as a good or bad apology.
• I only consider cases in which an apology isplausibly called for.
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Elements of an Ethically Good Apology
1. Logos/logical or content requirements
2. Ethos/character conveyed through the CEO role, through what is said, and through the manner in which the comments are given
3. Pathos/emotional connection the speaker forges with the audience
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Two CEO Apologies:Which Is Better in Your Opinion?
• “I mistakenly conveyed the status of the Phoenixinvestment in Trenton, Michigan. The facts I describedwere accurate for Trenton and not Kenosha, Wisconsin. Irecognize this has added further confusion to an alreadydifficult situation.”
• Chrysler CEO Bob Nardelli after he mistakenly said thatChrysler was NOT closing the Kenosha plant.
• Kenosha was, in fact, being closed, while Trenton wasremaining open.
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Two CEO Apologies
• “They were doing things that required much closer scrutiny…I am sorry for that”
• SAP CEO Bill McDermott’s apology to Oracle after SAP was successfully sued for infringing an Oracle copyright
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Logos/Content #1Naming the wrongdoing for which the apologizing
CEO and firm accept responsibility to minimize any harm victims impute to the firm.
Victims want to know that the firm/CEO and they agree on what the problem is.
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No Naming of Any Wrongdoing;Vague Talk about Suffering
• “Let me start by saying I’m sorry. I’m sorry thefinancial crisis has had such a devastating impact forour country. I’m sorry about the millions of people,average Americans, who lost their homes. And I’msorry that our management team, starting with me, likeso many others could not see the unprecedentedmarket collapse that lay before us.” Citibank CEOChuck Prince before Congress
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A Better Apology• Chrysler CEO Lee Iacocca’s apology
for Chrysler dealers’ practice of disconnecting odometers, driving the cars, reconnecting the odometers, and then selling as new cars:
"Disconnecting odometers is a lousy idea. That’s a mistake we won’t make again at Chrysler. Period.”
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Logos/Content #2Taking responsibility for addressing the causes and effects of the perceived wrongdoing
The audience needs someone with whom to build the bridge of trust.
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Chrysler CEO Nardelli• I mistakenly conveyed the status of the Phoenix investment in Trenton, Michigan. The facts I described were accurate for Trenton and not Kenosha, Wisconsin. I recognize this has added further confusion to an already difficult situation (quoted in Romell et al, 2009, 1) (emphasis added).
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Ethos/Conveyed Character
#1. Apologizing as promptly as possible
#2. Conveying a just and settled character
#3. Creating or choosing a supportive, consistent context for what is being said
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Pathos/Emotional Connection between Speaker & Audience
#1. Delivering the apology in person
#2. Exhibiting empathy
#3. Following through on an apology
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CEO Tony Hayward
• Hayward interview
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What’s Wrong with This CEO Apology?
• Dreamhost Josh Jones’ statement expressing his regret for the firm’s over-billing of many customers.
• Dreamhost CEO's Apology
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Lack of Follow-Through• “Listen, there was a lot of negligent behavior, improper
bad behavior, behavior that has to be fixed and sorted through. There’s no doubt about it, everybody succumbed to it, some more or less. We don’t take ourselves out of that. I include ourselves in that.” Lloyd Blankfein, Goldman Sachs CEO after mortgage debacle
• No changed behavior specified so audience feelings of rage and anger are not ameliorated.
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Let’s See What We’ve Learned
• Mattel CEO Bob Eckert's Apology: Is It Ethically Good?
• Domino’s Pizza USA CEO Patrick Doyle: Is It Ethically Good?
• Toyota’s President and COO Jim Lentz: Is it Ethically Good?
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Ethically Desirable Elements But Not Guarantors of Efficacy
• Audience reception highly contingent
• Nature of the offense---TEPCO
• Character of the audience
• relationship-centered vs individualistic
• Culture in which apology occurs—Japan vs. USA
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United Airlines
“I apologize for havingto re-accommodatethese customers.”
- Oscar Munoz, United CEO
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Timeline:• Sunday, 4/9/17 7:30PM: Videos surface on social media.
• A passenger is forcibly removed from his seat on a plane that was at 100% capacity after the airline failed to attract volunteers to deplane.
• A letter from the CEO to employees leaked casting the situation as unfortunate, but not the fault of the airlines.
• Monday, 4/10/17 12:27PM: First apology issued.
• Monday, 4/10/17 7:30PM: Letter to employees leaks. Appears to blame victim.
• Tuesday, 4/11/17 3:10PM: Second apology issued.
• Social media ignited with widespread condemnation and ridicule.
• United shares lose a total of $1.4 billion (-7%) two days following the incident. It has since recovered some value (-3%). 25
Second Apology Opening
“The truly horrific event that occurred on this flight has elicited many responses from all of us: outrage, anger, disappointment. I share all of those sentiments, and one above all: my deepest apologies for what happened. Like you, I continue to be disturbed by what happened on this flight and I deeply apologize to the customer forcibly removed and to all the customers aboard. No one should ever be mistreated this way.”
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Proposed Solution“I have committed to our customers and our employees that we are going to fix what’s broken so this never happens again. This will include a thorough review of crew movement, our policies for incentivizing volunteers in these situations, how we handle oversold situations and an examination of how we partner with airport authorities and local law enforcement. We’ll communicate the results of our review by April 30th.”
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