The CSR Newsletters are a freely-available resource generated as a dynamic complement to the textbook, Strategic Corporate Social Responsibility: Sustainable Value Creation.

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Monday, February 22, 2016

Strategic CSR - Apologies

The article in the url below suggests that, for a CEO, any sign of emotion is perceived to be a weakness—at least in the eyes of investors:
 
"Stock market investors have their own feeling about contrition, according to new research: lose it. Two business professors who analyzed more than 100 corporate apologies over three decades through 2012 found that those demonstrating the most emotion also experienced the steepest declines in share price over the following week."
 
In contrast to much of what crisis management teaches (e.g., the need to be honest and open, and empathize), the researchers' advice as a result of their research is to drop the empathy part:
 
"[The researchers] figured the perfect apology would acknowledge responsibility, identify the harm, show a wise character, be delivered in person and on time, display empathy for victims, and promise follow-through. … What the researchers had hoped to prove was that investors valued the most ethically sound apologies. Instead, the strongest finding was the negative reaction to empathy. By contrast, CEOs who identified the problem and took responsibility for it, without any empathy, got a small stock increase."
 
The researchers provided two possible explanations for their findings. In both cases, they paint the motivations of investors in a poor light:
 
"One reason empathy may disturb investors is that it's often considered a feminine trait or a sign of weakness, the researchers speculated. All the apologizers they studied were men. … Another possible interpretation, according to [one of the researchers]: 'If you're showing all that pathos, empathy, and emotional connection with your audience, the stock market might say, 'They're actually going to do something.' And that's going to cost money.'"
 
Take care
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
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The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/
 
 
CEOs: Apologize, but keep it manly
By Peter Robison
November 16-22, 2015
Bloomberg Businessweek
Late Edition – Final
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