EXECUTIVE SUMMARY
the situation
Prior research suggests that organizations tend to misunderstand how to repair trust. Many organizations fail to supply explanations for key events, or provide explanations that are so vague that they lack real information. As a result, trust can be easily damaged or destroyed through organizational failures and from the inability to repair it.
key questions and approach
How should organizations repair trust among external stakeholders? In what situations are communications to the public and institutional reforms likely to rebuild public trust following a competence violation or an integrity violation? How can companies rebuild trust when direct observation and interaction with the public cannot readily occur?
new knowledge
Institutional reforms can be used to prevent distrust and to signal an organization’s commitment to integrity or competence, and, as such, can effectively rebuild trust.
Controllability conditions the choice of trust repair strategies. Controllability assigns “blame” or “fault” to the organization, such as how much to hold another accountable for the failure, even if the organizational actions or inactions are deemed to be the root cause of the failure.
Public communication (such as apologies, accounts, and plans) are best conceptualized as a weak signal, but when bundled with more credible signals (such as institutional reforms), communication results in higher levels of public trust than communication or costly actions alone.