When an organization faces a product failure crisis, it must devise a response strategy that mitigates threats to financial performance, consumer perceptions, and legal liability. Research has already explored the implications of different apology strategies, but has yet to catch up with a recent shift in which CEOs are now delivering these apologies, rather than having them delivered in writing or by a third party spokesperson. Because we know that CEO characteristics influence consumer perceptions, a new question arises: How might CEO characteristics, namely gender, influence the effectiveness of a CEO-delivered apology? Researchers (Cowen & Montgomery, 2020) add to the crisis management literature by answering this question and discussing the potential implications it has on organizations in crisis situations.
HOW DO CONSUMERS RESPOND TO ORGANIZATIONAL APOLOGIES?
The present study focuses on accommodative apologies—those that assume some level of responsibility for the product failure. This strategy is typically more successful than defensive strategies, where organizations deny responsibility. This is based on the concept of communal norms, which currently hold that product failures are typically the fault of the organization. Therefore, organizations can more easily appease customers by abiding by communal norms and accepting some level of responsibility for failures.
However, it can be tricky for an organization to determine the most advantageous level of responsibility to assume within an apology. Apologies assuming too much responsibility may be perceived favorably by consumers, but they may also leave organizations vulnerable to risky and costly litigation. As a result, a CEO may choose to offer an unqualified apology, which accepts full responsibility, a statement of sympathy, which does not address responsibility, or a qualified apology, which accepts only partial responsibility.
UNQUALIFIED APOLOGIES ARE MORE SUCCESSFUL FOR FEMALE CEOS
The researchers hypothesized that determining the right type of apology response may be even trickier for female CEOs due to gender stereotyping, by which women are held to communal norms more stringently than men. To test this hypothesis, the authors conducted an online survey study in which participants responded to a news article detailing a product failure of blood glucose strips occurring at “XYZ Health, a manufacturer of over-the-counter (OTC) pharmaceutical and other consumer health products.” The consumer health industry was chosen specifically because a previous study found that the industry did not hold strong masculine or feminine connotations, meaning participants did not have strong expectations regarding the CEO’s gender.
While the product failure was held constant, the CEO gender varied and the apology presented to participants varied (unqualified, sympathetic, and qualified). The researchers found that participants’ reactions, including future purchase intent and perception of fairness, did not vary when the CEO was a man. However, when the CEO was a woman, participants responded more favorably to the unqualified apology, meaning that participants indicated increased apology fairness and willingness to purchase in the future when the female CEO took full responsibility for the product failure. This is in line with the researchers’ hypothesis regarding communal norms; participants held fairness to a higher standard for the female CEO, meaning there was a higher expectation that she should take responsibility.
ORGANIZATIONAL IMPLICATIONS
As CEOs are playing a more central, public role in crisis management, this research contributes to our understanding of how personal characteristics and gender stereotypes can influence who should make an apology and how. The research suggests that organizations need to carefully weigh the risks of organizational reputation and litigation, particularly when the CEO is a woman. To achieve a similar consumer response as a male CEO, a female CEO may need to endorse an unqualified apology, though her organization may in turn assume greater liability.
While there is no immediate solution to gender biases such as this, the research can be used to inform decision-makers during times of crises in order to make the most educated, strategic decision regarding public crisis response. Finally, leaders and practitioners should be on the lookout for new literature exploring real cases of CEO crisis response, as well as studies that investigate the importance of other CEO or consumer characteristics when crafting crisis responses.
Cowen, A.P. & Montgomery, N.V. (2020). To be or not to be sorry? How CEO gender impacts the effectiveness of organizational apologies. Journal of Applied Psychology, 105(2), 196-208.