12 Jun 2019
Professor Madan Pillutla explains how to improve good judgement in making financial choices and the importance of removing bias from investment decisions
18 Sep 2017
Saying sorry may actually make things worse if people question your sincerity, explains Dr Gabe Adams
Apologising can do a scandal-hit company or under-fire leader more harm than good when it is delivered poorly or deemed inauthentic.
Ryanair has been heavily criticised for cancelling 40–50 flights a day from 16–20 September, after it “messed up” the planning of pilot holidays. The Irish airline blamed a backlog of staff leave, with many employees booking holidays near the end of 2017, when apologising for the error.
But passengers have reacted angrily on social media, calling for a full list of affected flights to be released. The airline’s shares fell by up to 3% on Monday 18 September.
London Business School research shows that companies such as Ryanair have to do three things when apologising, according to Dr Gabe Adams. “First, choose a senior spokesperson with the ability to apologise sincerely,” she said.
“Second, acknowledge the wrongdoing and accept responsibility for it. Saying ‘I’m sorry’ and accepting responsibility may lead to smaller losses than the absence of this expression.
“Third, communicate your sympathy for those who have been harmed or who have suffered, and do what you can to make it right.”
Dr Adams’ comments are timely following recent corporate misdemeanours, including the Boots morning-after pill controversy. The British pharmacy chain apologised for its response to calls to cut the cost of its emergency contraceptive.
Boots faced criticism in July after telling the British Pregnancy Advisory Service that the cost of its pill would stay at £28.25 to avoid “incentivising inappropriate use”. It then apologised for its “poor choice of words” over the pricing. Other British shops sell the same branded drug for £13.50.
Oscar Munoz, the CEO of United Airlines, issued a second apology in April 2017 about a man who was forcibly removed from one of the carrier’s flights. The executive called the incident “truly horrific”.
Munoz’s first attempt at showing remorse was lambasted by critics. In a statement on 10 April, the CEO referred to the incident as an effort to “re-accommodate” passengers. He also described the man who was removed as “disruptive and belligerent”.
Nearly US$1 billion (£767 million) of the company’s value was wiped out the day after Munoz’s first apology. He issued the second apology on 12 April.
“Delivering a poor apology can damage the company’s reputation and prompt investors to question their association with the business,” Dr Adams said. “If company representatives get the apology wrong, it is an error subject to scrutiny by investors.”
Gabe Adams, formerly Assistant Professor of Organisational Behaviour at London Business School, now works at University of Virginia