University of Southern California

What Does It Take To Repair Trust?
January 20, 2012
Management & Organization

Study co-authored by USC Marshall professor finds that nothing beats showing true contrition in terms of winning back trust.

The scene has become all too familiar—the disgraced politician, chastened business leader or shamed celebrity standing before a podium offering up their apologies as the news cameras flash.

One can imagine the behind-the-scenes publicists and strategists milling about to develop the proper plan to address the infractions. How much is too much or too little? Is an apology sufficient or should additional efforts be made to repair trust?

A recent study co-authored by Peter Kim, an associate professor of management and organization at USC Marshall, investigated substantive efforts to repair trust--those responses to trust violations that are more significant than a verbal apology or promise such as punishment, regulation or policies designed to prevent future transgressions.

"Understanding the Effects of Substantive Responses on Trust Following a Transgression" was published in the journal Organizational Behavior and Human Decision Processes. Kim's co-authors include Kurt Dirks, Bank of America professor of managerial leadership at Washington University's John M. Olin School of Business; Donald Ferrin, associate professor of organizational behavior and human resources at Singapore's Lee Kong Chian School of Business; and Cecily Cooper, associate professor of management at University of Miami's Department of Management.

The researchers discovered that while it is often assumed that substantive actions should repair trust more effectively than cheap talk, this assumption can often be wrong. Substantive actions are not always better than simple apologies at demonstrating repentance, and for this reason, potentially costly trust repair initiatives can sometimes be a wasted effort. Repairing trust, the researchers concluded, depends on the audience's perception of the response—it hinges on the perception that the violator was truly repentant.

Participants in the U.S. and Singapore took part in four experiments, two of which had participants make a series of trust-related decisions in a game with a virtual partner who would, at a designated point in the match, violate their trust by keeping all the money earned cooperatively in previous rounds. The two other studies, meanwhile, assessed participants' opinion of a fictional CEO who asked his employees to take a pay cut and failed to follow suit, breaking a promise to refuse dividends from his preferred stock holdings.

The research demonstrated that the key was showing true contrition in terms of winning back trust.

Why is this presumed to work? According to the study, to communicate repentance violators must show that they regret their actions, they are committed to reform and they have the resolve to act differently in the future.

Preventative measures, calls for regulation and even promises of financial remediation did less in some cases than simply and convincingly apologizing to the wronged parties. When coupled with a believable apology, however, substantive methods like regulation were effective, more so depending on whether the violation was due to incompetence, which participants found easier to forgive, than a lack of integrity.

"We want to know that the person has changed somehow, that their character has changed. The trust repair responses we explore, even though they differ in costliness, the approach and so on, the extent to which they work hinges on their ability to signal perceived repentance," said Kim.

Kim pointed to the text messaging scandal involving former New York Congressman Anthony Weiner as an example of the study's core findings.

"The fact that he resigned from Congress, it's clear that he did so involuntarily so that resignation isn't going to restore trust in him at all," said Kim. "If it had been seen as voluntary and that he was punishing himself and doing so because he really was repentant, that same objective outcome would have been far more effective. Instead, our sense that the departure from Congress had been imposed prevents it from signaling that sense of repentance."