姝 Academy of Management Review

2009, Vol. 34, No. 1, 127–145.

TRUST REPAIR AFTER AN ORGANIZATION-

LEVEL FAILURE
NICOLE GILLESPIE
University of Melbourne

GRAHAM DIETZ
Durham University

We propose a systemic, multilevel framework for understanding trust repair at the

organizational level. Drawing on systems theory, we theorize how each component of
an organization’s system shapes employees’ perceptions of the organization’s trust-
worthiness and can contribute to failures and effective trust repair. We distinguish the
framework from prior work grounded in dyadic assumptions and propose underlying
principles and a four-stage process for organizational trust repair. Finally, we explore
the implications for research and practice.

A fundamental assumption inherent in most distress and uncertainty can be profoundly un-
employment relationships is that the employer settling for those who have invested their effort,
will operate in a trustworthy manner (Galford & reputation, and career ambitions in the service
Drapeau, 2003). High trust levels are common of a now discredited organization. The loss of
early in such relationships (Robinson, 1996), trust and resulting distrust may manifest in em-
with trustworthiness a “given” in the absence of ployees’ reduced willingness to display the kind
contrary evidence (McKnight, Cummings, & of trust-informed behaviors that contribute to
Chervany, 1998). But what happens when one’s effective operational functioning (Dirks & Ferrin,
employer acts in a manner that undermines this 2001), as well as withdrawal (Robinson, 1996)
perception of trustworthiness? and even obstructionism and acts of retaliation
Prominent examples of such incidents—what (Bies & Tripp, 1996). The failure can lead to a
we term organization-level failures—include ac- breakdown or renegotiation of internal and ex-
counting frauds (e.g., Enron, WorldCom, Parma- ternal relationships.
lat); deceit (e.g., plagiarized and fabricated re- Research suggests that broken trust can be
ports by the New York Times); incompetence repaired (Bottom, Gibson, Daniels, & Mur-
(e.g., the U.S. Federal Emergency Management nighan, 2002; Mishra, 1996), with much depend-
Agency’s response to Hurricane Katrina); fatal, ing on the violator’s response (Korsgaard, Brodt,
avoidable accidents (e.g., Union Carbide’s & Whitener, 2002; Schweitzer, Hershey, & Brad-
chemical spill at Bhopal, BP’s Texas City refin- ley, 2006). However, most organizations respond
ery fire, Townsend Thoresen/P&O’s ferry sinking poorly to trust failures (Schwartz & Gibb, 1999),
at Zeebrugge); exploitation of vulnerable people typically acting too late, with inappropriate
(e.g., use of child labor sweatshops); massive equivocation, and with less regard for internal
compulsory job losses (e.g., IBM in the 1990s); relations than for external relations. Given the
and bankruptcies and catastrophic collapses in prevalence of trust failures in organizations
organizational finance (e.g., AIG, Freddie Mac (Mishra, 1996; Robinson, 1996) and the serious-
and Fannie Mae, Northern Rock). ness of their consequences, knowing how to re-
There are several potential consequences of pair trust has become a “critical management
organization-level failures. Although employees competency” (Lewicki & Bunker, 1996). Yet, to
will differ in their emotional and behavioral re- date, little attention has been paid to repairing
sponses (Bies & Tripp, 1996; Mishra, 1996), the trust at the organizational level.
Drawing on prior research and theory on trust,
We thank Aks Zaheer, Antoinette Weibel, Tom Redman,
systems and multilevel theory, crisis manage-
and the three anonymous AMR reviewers for their helpful ment, and strategic organizational change, we
and constructive feedback on earlier versions of this paper. propose a framework for analyzing and repairing
127
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128 Academy of Management Review January

employees’ perceptions of their organization’s concept (Rousseau, Sitkin, Burt, & Camerer,
trustworthiness. In developing our framework, we 1998), integrating microlevel psychological pro-
first define organizational trustworthiness and cesses and group dynamics with macrolevel or-
organization-level failures and briefly review ganizational and institutional forms. Our level
prior research on trust repair. We then concep- of analysis is primarily at the individual level—
tualize organizations as multilevel systems and that is, employees’ perceived organizational
identify the components that contribute to per- trustworthiness. However, following Morgeson
ceptions of the organization’s trustworthiness, and Hofmann (1999), we also see organizational
as well as to failures. With these foundations in trustworthiness as a collective construct—a
place, we identify the underlying mechanisms sensemaking heuristic originating at the level
and principles for organizational trust repair of individuals’ perceptions but that, in the ag-
and illustrate how these operate through each gregate of collective impressions, can operate
system component and each stage of our trust as a shared reputation in the organization.
repair process. In the final section we describe
the implications for research and practice.

Organizational Failure
We draw on prior research on failures, crises,
DEFINITIONS and betrayal in organizations to define organi-
Organizational Trustworthiness zation-level failure as a single major incident, or
cumulative series of incidents, resulting from
In this paper we focus on employees’ percep- the action (or inaction) of organizational agents
tions of the trustworthiness of their organization that threatens the legitimacy of the organization
and the processes required for repairing these
and has the potential to harm the well-being of
perceptions once they are damaged by an orga-
one or more of the organization’s stakeholders.
nization-level failure. Perceived organizational
We now describe each condition.
trustworthiness relates to the set of “confident
First, to manifest at the organizational level,
positive expectations” employees have about
the failure must be of sufficient magnitude to
the intentions and likely future actions of their
threaten the legitimacy of the organization itself
employer (Lewicki, McAllister, & Bies, 1998).
(Anheier, 1999). The crisis of legitimacy may
Mayer, Davis, and Schoorman (1995) identified
stem from the failure’s calling into question (1)
three dimensions of trustworthiness, which we
adapt to the organizational level: (1) ability (the the organization’s capacity to fulfill its funda-
organization’s collective competencies and char- mental mission or one of its essential responsi-
acteristics that enable it to function reliably and bilities (e.g., safe transport for P&O Ferries, ac-
effectively to meet its goals and responsibilities), curate journalism for the New York Times)
(2) benevolence (organizational action indicating and/or (2) the organization’s adherence to com-
genuine care and concern for the well-being of monly endorsed ethical standards (e.g., to avoid
stakeholders), and (3) integrity (organizational ac- lethal, exploitative, or dishonest work practices).
tion that consistently adheres to moral principles In trust terms, the organization has failed in its
and a code of conduct acceptable to employees, responsibility to meet reasonable standards of
such as honesty and fairness). ability, benevolence, and/or integrity in its con-
Employees use these characteristics to evalu- duct toward its stakeholders.
ate a variety of targets, including immediate Second, the perceived potential or actual
working relationships (Butler, 1991), senior man- harm arising from the failure may not necessar-
agement (Mayer & Davis, 1999), internal groups, ily be borne by the employees themselves but,
and the organization itself (Robinson, 1996). In rather, by other stakeholders, such as custom-
making judgments about the overall trustwor- ers, shareholders, or the wider community. Nev-
thiness of their organization, employees con- ertheless, this can affect employees profoundly
sider these multiple actors, as well as sources of by undermining their faith in their employer,
evidence drawn from multiple organizational with which much of their social identity is inex-
components and levels (Galford & Drapeau, tricably bound (cf. Tajfel & Turner, 1985), as well
2003; Nooteboom, 2002). Hence, trust is a “meso” as by inducing a sense of shame and guilt by
2009 Gillespie and Dietz 129

association1 and by damaging job security. activities are most effective in repairing the re-
Harm to another stakeholder also indicates that lationship. Recommended actions include
the organization is capable of similar conduct Lewicki and Bunker’s (1996: 131–133) four-stage
toward its own employees. process: (1) acknowledge that a violation has
Third, the failure is understood as having oc- occurred, (2) determine the causes of the viola-
curred as a consequence of actions, or negligent tion and admit culpability, (3) admit the act was
inaction, from organizational agents who have destructive, and (4) accept responsibility for the
acted as authorized, instructed, or otherwise fa- consequences. The transgressor should then en-
cilitated by the organization. The locus of con- gage in action designed to undo the violation
trol for the failure is internal to the organization, and rebuild the trust. Tomlinson, Dineen, and
even though the context for the failure may in- Lewicki (2004) similarly have urged violators to
volve external influences. always apologize and admit culpability where
To qualify as an organizational failure, each relevant. However, this contradicts Kim, Ferrin,
condition is necessary but not sufficient, and Cooper, and Dirks’ (2004) finding that apologies
together they distinguish organization-level are more effective for competence-based viola-
failures from more minor transgressions. Even tions, whereas denials are more effective for
when each condition is met, failures will vary in violations of integrity.
magnitude, depending on the extent of each Fewer studies have focused on substantive (as
condition: the harm caused may be hypothetical opposed to verbal) actions. Bottom et al. (2002)
(e.g., successful product recalls) or very real have reported that offers of penance elicit coop-
(e.g., loss of life, jobs, or invested money), the eration more effectively than verbal responses
threat to legitimacy may be modest and short- alone, while Dirks, Kim, Cooper, and Ferrin
lived (e.g., the New York Times) or catastrophic (2005) have reported that punishment and regu-
(e.g., WorldCom), and the organization may lation of the transgressor both effectively in-
have had total or partial control over the crease trust following a violation. Nakayachi
(in)action leading to the failure. and Watabe (2005) found that voluntarily intro-
For parsimony, our point of entry is postattri- ducing monitoring systems and sanctions
bution—that is, once the failure has occurred helped restore perceived organizational trust-
and has damaged employees’ perceptions of or- worthiness from the perspective of consumers.
ganizational trustworthiness. While individual Although this literature provides valuable in-
employees may differ in their attributions and sights for interpersonal trust repair, its focus
perceptions, our assumption is that organiza- and assumptions do not translate well to the
tion-level failures are of a magnitude that dam- organizational level. First, studies focus primar-
ages most employees’ perceptions. ily on interpersonal trust between a single
violator and victim, yet, as we have argued,
perceived organizational trustworthiness is in-
TRUST REPAIR: PRIOR THEORY AND
fluenced by multiple sources of evidence and
RESEARCH
actors operating at multiple organizational lev-
Empirical studies on trust repair in organiza- els. Second, experimental studies limit the
tional settings have examined the conditions choice of remedial options, often to a unitary
under which trust is broken and which remedial verbal response (e.g., denial or apology). Follow-
ing an organization-level failure, a single re-
sponse will rarely be sufficient. Trust repair will
1
Schwartz and Gibb note that “when a company finds instead involve a protracted process requiring
itself pilloried by the press and/or its customers, the conse-
several complementary responses at multiple
quences are real for both the organization and the individ-
uals involved” (1999: xiii). They cite incidents of Shell em- levels. Third, experimental studies minimize in-
ployees after the Ken Saro-Wiwa incident wrestling with put from beyond the immediate interaction. Typ-
“the shock of finding themselves blamed for the tragedies— ically, the victim has limited information about
even their children were being harassed at school” (1999: 28), the guilty party; the act and its aftermath are
workers at Union Carbide “crying at their desks . . . in the
private to the dyad, and the consequences of the
weeks after Bhopal” (1999: 170), and the CEO of Nike conced-
ing that part of the motivation for their code of conduct was failure and decisions regarding reconciliation
to make workers at Nike “feel better about ourselves” are minimal and transient. These conditions do
(1999: 54). not apply to organization-level failures; many
130 Academy of Management Review January

employees have extensive history and inside standing organizational trustworthiness are ex-
information about the organization’s conduct, ternal governance and the organization’s public
and there are very real consequences for them reputation.
and the organization. The failure is often in full Both systems and multilevel theory highlight
public view, and external groups or forces may that the organization’s various components op-
influence the trust repair process. Finally, in erate at multiple levels and that activities
dyadic situations the transgressor knows what within one component and level can influence
caused the violation and what his or her role and be influenced by those occurring in other
was in making it happen. In contrast, blame and components and levels (Rivkin & Siggelkow,
responsibility typically are more diffuse in or- 2003). Micro phenomena, such as perceptions of
ganizational failures, with multiple contribu- organizational trustworthiness, are influenced
tors. In summary, there is little theory or re- by macrolevel factors, while macro phenomena,
search to guide trust repair at the organizational such as an organizational failure, often emerge
level. We propose that a systemic, multilevel, through the interactions of lower-level elements
and multiactor framework is needed to guide (Klein & Kozlowski, 2000). Pertinent to our frame-
trust repair at this level. work is the view that an organization’s reputa-
tion for trustworthiness forms as a result of in-
teractions among agents and groups in a
A SYSTEMIC FRAMEWORK FOR
multilevel network (e.g., senior leadership, line
ORGANIZATION-LEVEL TRUST REPAIR
management, employees in each work unit):
To understand organization-level trust repair, “Only through interaction does a construct ac-
we first need to identify what factors both influ- quire meaning and structure” (Morgeson & Hof-
ence employees’ assessment of the organiza- mann, 1999: 256). Through the influence of the
tion’s (un)trustworthiness and contribute to or- interconnected organizational components, cer-
ganizational failures. To date, no coherent tain interactions are facilitated and reinforced
theory or model exists to guide such an under- and, if repeated regularly over time, form institu-
standing. Our framework is informed by sys- tionalized patterns of behavior and thinking
tems (Burke, 2002; Katz & Kahn, 1978) and multi- (“event cycles”; cf. Morgeson & Hofmann, 1999).
level theories (Klein & Kozlowski, 2000; These provide the cumulative evidence for em-
Morgeson & Hofmann, 1999). ployees to judge their employer’s trustworthiness.
Systems theory depicts organizations as con- Thus, the organization does not display trustwor-
verting external inputs (e.g., resources, invest- thiness—its members do, through interactions
ment, new recruits) into outputs (e.g., products and event cycles sanctioned by, and embedded in,
and services) via a “throughput” stage, which the organization’s system components.
comprises the organization’s entire operations
and activities. From this perspective, an organi-
Organizational Trustworthiness: Systemic
zation-level failure results from faults in the
Contributors
throughput, which damage the quality and sup-
ply of outputs and/or relations with input sup- Each subsection that follows supports our first
pliers (e.g., investors, customers, future employ- foundational premise that each of the six system
ees) and, hence, the organization’s reputation components identified in Figure 1 sends cues
for trustworthiness (Burke, 2002: 47). about the organization’s ability, benevolence,
The throughput stage comprises multiple or- and integrity, and these cues influence, either
ganizational system components. We focus on positively or negatively, employees’ perceived
six—four internal and two external (see Figure organizational trustworthiness.
1). Drawing from models of strategic change Leadership and management practice. An or-
(Burke & Litwin, 1992; Nadler & Tushman, 1997), ganization’s senior leaders and levels of man-
prominent internal components include leader- agement symbolize and shape the conduct of
ship and management practice; culture and cli- the organization (Smircich & Morgan, 1982). By
mate; strategy; and structures, policies, and pro- virtue of their authority and accountability, se-
cesses. In turn, these components are influenced nior leaders’ actions directly inform employees’
by variables from the organization’s environ- impressions of the organization’s trustworthi-
ment. Two external factors pertinent to under- ness (Kouzes & Posner, 2002). At the pivotal work
2009 Gillespie and Dietz 131

FIGURE 1
Organizational System Components and Their Effects on Employees’ Perceptions of
Organizational Trustworthiness and Organization-Level Failures

unit level, an employee’s relationship with his trol (Das & Teng, 1998; Perrone, Zaheer, &
or her line manager often acts as a lens through McEvily, 2003); and artifacts, such as work sto-
which the employee learns about and interprets ries, legends, and value statements. Case stud-
the rest of the organization. If employees dis- ies attest to organizational and work unit norms
trust their immediate manager, this taints their exerting strong pressure on employees to act in
perception of the broader organization’s trust- untrustworthy ways, and even justifying ques-
worthiness (Kouzes & Posner, 2002). Through tionable behavior (Dickson et al., 2001; Treviño,
their own behavior as role models (Schein, 1990) 1986).
and their influence and discretion over other Strategy. Organizational strategy, including
system components (e.g., rewards, appraisals, financial, operational, and human resource
cultural values), managers at all levels send strategies, determine work unit goals, resources,
signals about what is expected of employees,
budgets, policies, and procedures, which, in
including whether untrustworthy or even uneth-
turn, send signals to employees about expected
ical behaviors might be tolerated and even tac-
behavior and the organization’s real values and
itly encouraged (see Dickson, Smith, Grojean, &
priorities (Burke & Litwin, 1992). The coherence
Ehrhart, 2001).
Culture and climate. Organizational culture, and effectiveness of the strategy can directly
subcultures, and work unit climates influence affect interpretations of organizational com-
the development of commonly held mental sche- petence. The strategy also signals the organiza-
mata and employees’ shared interpretations of tion’s intention to act with integrity and benev-
organizational actions and events (Schein, 1990; olence toward its stakeholders. Several promi-
Victor & Cullen, 1988). Employees’ perceptions of nent failures have involved questionable
their organization’s trustworthiness can be de- strategies amounting to incompetent “over-
rived from shared cultural beliefs; values and reach” (e.g., see Probst & Raisch, 2005: 92–94) or
norms (Nooteboom, 2002); forms of cultural con- disregard for certain stakeholders (e.g., cost cut-
132 Academy of Management Review January

ting to the detriment of health and safety), each brand, and its standing among industry and
of which undermines trustworthiness. stakeholder networks (Klein, 1997). Employees
Structures, policies, and processes. By “struc- take pride in, and are reassured by, a stable
tures,” we mean reporting lines, checks and bal- external reputation for trustworthiness (Shaw &
ances, distribution of responsibility and author- Post, 1993), whereas public dismay over poor-
ity, and work formalization. By “policies and quality goods or services or inappropriate
processes,” we mean the rules, guidelines, and treatment of stakeholders will undermine em-
procedures governing decision making, commu- ployees’ perceptions of their organization’s
nication, employee conduct, and human re- trustworthiness.
source management (HRM). Together, these set We anticipate that the salience of each com-
parameters around acceptable behaviors and ponent for employees’ perceptions will vary
can instill and even control members’ (un)trust- across organizations and sectors, as well as
worthiness by assigning roles and expectations among employees. Our essential point here is
for incumbents and constraining discretionary that each component communicates cues that,
actions (Perrone et al., 2003; Shapiro, 1987). Con- in the aggregate, form the collective construct of
versely, absent, unclear, or unused arrange- perceived organizational trustworthiness. This
ments can facilitate or fail to prevent incompe- leads to our first foundational premise.
tent and dishonest behavior. In this manner
Premise 1: Employees’ perceptions of
structures, policies, and processes can powerfully
organizational trustworthiness are in-
influence organizational trustworthiness. The fair-
fluenced by multiple cues from the or-
ness and consistency of structures, policies, and
ganization’s six system components:
processes, both in design and implementation,
leadership and management practice;
are indicative of benevolence and integrity, while
culture and climate; strategy; struc-
coherence and effectiveness imply ability. HRM
tures, policies, and processes; external
policies in particular have been shown to influ-
governance; and public reputation.
ence employees’ perceptions of organizational
trustworthiness (see Mayer & Davis, 1999).
External governance. In addition to these in-
Organizational Failures: Systemic Contributors
ternal components, expectations of what consti-
tutes trustworthy behavior are embedded within As illustrated in the previous subsections,
external governing structures and rules that each component can engender organizational
constrain the organization’s conduct. Forms of trustworthiness but can also facilitate untrust-
institutional-based trust (Zucker, 1986) include worthy behavior, which increases the likelihood
legislation and regulatory mechanisms from of an organizational failure. Our second founda-
government, professional and trade associa- tional premise is that multiple organizational
tions, industry networks (Ring & Van de Ven, components and agents contribute to the dys-
1992), and, increasingly, consumer and environ- functional interactions and event cycles that re-
mental bodies. To the extent that these “imper- sult in organizational failures: “Unethical or il-
sonal structures” are trusted, they can provide a legal actions cannot take place without
basis for trust in the organization by proxy (Mc- opportunity” (O’Connor, Priem, Coombs, & Gil-
Knight et al., 1998: 474). However, as Arthur ley, 2006: 486)—nor, we suggest, can incompe-
Andersen’s collusion with the Enron fraud high- tence or avoidable accidents. Even when an in-
lights, the institutional environment may lack dividual’s lone actions seem to have caused the
adequate constraining mechanisms or may con- failure (e.g., Nick Leeson’s risky trading “single-
tain opportunities and even incentives for par- handedly” destroying Barings Bank), these ac-
ties to engage in untrustworthy activities. tions are typically facilitated by a deviant or
Public reputation. Finally, employees also inadequate culture, strategy, or management
take cues from how their organization’s reputa- and/or by ineffective constraining structures,
tion for ability, benevolence, and integrity is policies, and processes (all of the above in Lee-
perceived by external stakeholders (e.g., by cus- son’s case). We do not anticipate that every com-
tomers, industry representatives, the media). ponent will be implicated; rather, failures of a
Cues come from judgments about the organiza- magnitude that threaten the organization’s le-
tion’s products and services, the familiarity of its gitimacy will have multiple contributory causes.
2009 Gillespie and Dietz 133

This premise is supported by systems and multi- trustworthiness and the systemic factors contrib-
level theory and by research and case studies uting to organizational failures that need
on organizational failures and crises (see Hauns- consideration in designing trust repair interven-
child & Sullivan, 2002; O’Connor et al., 2006; tions. We now describe two underlying mecha-
Pearson & Clair, 1998; Rivkin & Siggelkow, nisms for trust repair and the principle of con-
2003).2 gruence, and we illustrate how these operate
We distinguish the role of internal and exter- through each system component. Because our
nal system components in organizational fail- entry point is postattribution, we focus on trust
ures. While every organization is constrained by repair strategies that deal with the aftermath of
external governance structures (or enabled by the failure, rather than attempts to reposition
their absence or incentives therein), organiza- perceptions of the failure itself.
tional members nevertheless retain consider-
able discretion over how they respond (Katz &
Underlying Mechanisms for Trust Repair
Kahn, 1978), including whether they act in a
trustworthy manner or not. As the equifinality People undergo a cognitive reappraisal of the
principle (Gresov & Drazin, 1997) states, alterna- relationship following a trust failure, with a ten-
tive strategies exist for how organizations re- dency to privilege negative evidence over posi-
spond to the same circumstances and, hence, tive evidence (Kim et al., 2004; Slovic, 1993). Dur-
how they choose to coordinate the system com- ing this fragile period, people are strongly
ponents. Not all firms in a sector “fail,” although motivated to avoid risk, are “hypervigilant” to
all face the same difficult external factors. Thus, suggestions of future untrustworthy behavior,
only the internal components contribute directly and are susceptible to “paranoid cognitions”
to organization-level failures (see Figure 1). and “sinister attribution error” (Kramer, 1996).
These cognitive biases can lead to overcon-
Premise 2: Organization-level failures
strued and negative inferences about the mo-
are systemic in nature, yet only the
tives, character, and competence of the organi-
multiple internal organizational com-
zation and its management, impeding accurate
ponents contribute directly to organi-
sensemaking and learning about the failure
zation-level failures.
(Haunschild & Sullivan, 2002) and hampering
trust repair efforts. Thus, the primary objectives
PRINCIPLES FOR REPAIRING of any trust repair process are to overcome these
ORGANIZATIONAL TRUSTWORTHINESS salient negative expectations and to restore
confident positive expectations about the viola-
The two preceding premises are foundational
tor’s future trustworthiness (Kim et al., 2004). We
since they provide an understanding of the sys-
draw on the distinction between trust and dis-
temic construction of perceived organizational
trust (see Lewicki et al., 1998) to identify two
complementary mechanisms that underlie orga-
2
The investigation into the Space Shuttle Columbia di- nization-level trust repair: distrust regulation
saster (CAIB, 2003) identified as contributory causes NASA’s and trustworthiness demonstration.
culture (which diminished safety), management practices
Distrust regulation. This mechanism attempts
(which prevented communication), an inappropriate chain of
command, resource constraints, fluctuating priorities, and to overcome employees’ distrust—the confident
scheduling pressures. BP’s 2005 Texas City refinery fire was negative expectations (cf. Lewicki et al., 1998)
initially attributed to mistakes by individual employees, but and “expectation of injurious action” (Luhmann,
the official investigation revealed complex interconnected 1979: 72)—arising from the failure. It does so
causes, including management lapses; unclear responsibil-
through actions designed to avoid and prevent
ities and accountabilities; lack of training; inadequate
maintenance; poor communication, reward, and perfor- future trust transgressions, by dealing with the
mance management processes; and a “fragmented culture” faults that led to the failure— both direct and
characterized by “resistance to change” and “distrust.” The contributory. If these faults remain in place, the
report into the Enron collapse concluded that it was “the likelihood of a recurrence is high, and this po-
result of failures at many levels and by many people,” iden-
tentiality will further undermine employees’
tifying among the key contributors financial incentives, con-
flicts of interest, inadequate controls, and a “culture [that] confidence. Trust repair is much more difficult
appears to have encouraged ’pushing the limits”’ (Powers, after repeated violations than after an initial
Troubh, & Winokur, 2002: 27–28). failure (Lewicki & Bunker, 1996).
134 Academy of Management Review January

Distrust regulation interventions are designed We anticipate that employees will accept the
to modify the organization’s dysfunctional compo- legitimate need for the organization to impose
nents and errant interactions and event cycles regulations on itself and its agents in order to
that contributed to the failure, replacing them with prevent future failures. The magnitude of the
a new “admissible range” of behaviors. This organization-level failure provides a clear and
mechanism involves implementing sufficient reg- powerful motivation.
ulatory controls to prevent or constrain organiza- Trustworthiness demonstration. Overcoming
tional members and groups from acting in ways negative expectations and distrust is essential to
that could lead to future violations, including the trust repair, but it does not go far enough. As
removal of incentives that may encourage untrust- Lewicki et al. argue, “Removal of foundations of
worthy behavior. This reflects Nooteboom’s obser- distrust . . . does not necessarily facilitate the
vation (2002) that organizational trustworthiness is emergence of trust” (1998: 452). It is also necessary
founded largely on an organization’s ability to fos- to restore positive expectations (Kim et al., 2004)
ter and control its members’ trustworthiness. The and a sense of good faith and fair dealing (Rous-
seau et al., 1998). This second mechanism, trust-
aim is to reduce and eventually dissipate fears
worthiness demonstration, is about the positive
and skepticism about the organization’s intention
promotion of renewed trustworthiness through be-
and ability to avoid future transgressions.
haviors and verbal responses that actively dem-
These “legalistic remedies” (Sitkin & Roth,
onstrate ability, benevolence, and integrity. It is
1993) include regulations, rules, contracts, mon-
focused on sending repeated, clear, and consis-
itoring processes, and controls. Embedded in
tent signals that employees can anticipate bene-
these approaches are deterrents in the form of ficial conduct and desirable actions from the or-
punishments and sanctions imposed on those ganization, resulting in a sense of hope, faith, and
who engage in untrustworthy behavior (e.g., be- assurance (Lewicki et al., 1998: 444 – 445).
ing fined, fired, demoted, or ostracized, or losing This mechanism includes expressions of re-
accreditation, privileges, membership, status, or gret, acknowledgment of responsibility, apolo-
social capital). The presence of such punish- gies, and offers of reparations, as well as gen-
ment sends clear signals that the behavior is eral displays of competence, benevolence, and
unacceptable and offenders will “pay a price.” integrity in the organization’s initial and ongo-
Research suggests that these regulatory sys- ing response to the failure (e.g., meeting new
tems can significantly enhance and repair per- commitments). Hence, this mechanism is dis-
ceived organizational trustworthiness (Sitkin & tinct from distrust regulation, since it focuses
Roth, 1993; Slovic, 1993), particularly when intro- on symbolic and actual displays of positive
duced voluntarily rather than imposed exter- trustworthiness, rather than on regulating
nally (Dirks et al., 2005; Nakayachi & Watabe, negative behavior related to the cause of the
2005). When regulations are imposed (e.g., by the failure (e.g., apologizing and offering repara-
government), compliance may be attributed to tions demonstrates benevolence and fairness
the desire to avoid sanctions, raising concerns but does not directly prevent a future trans-
that the organization may get around or weaken gression). This mechanism is complementary
the constraints. In contrast, a voluntary effort to distrust regulation, since repeated and/or
will be seen as diagnostic of the organization enduring displays of such positive signals
itself (Heider, 1958), implying that it has learned over time help restore employees’ confidence
a lesson and is intrinsically committed to, and in the organization.
confident in its ability to, act differently (Na- Proposition 1b: After an organization-
kayachi & Watabe, 2005). al failure, the implementation of inter-
Proposition 1a: After an organization- ventions that demonstrate and sym-
al failure, the voluntary implemen- bolize the organization’s ability,
tation of interventions that constrain benevolence, and integrity increases
untrustworthy behavior by organiza- employees’ perceptions of the organi-
zation’s trustworthiness.
tional agents increases employees’
perceptions of the organization’s Table 1 provides illustrative examples of how
trustworthiness. the distrust regulation and trustworthiness dem-
2009 Gillespie and Dietz 135

TABLE 1
Examples of Trust Repair Interventions for Each Organizational System Component

Distrust Regulation: Constrain Untrustworthy Trustworthiness Demonstration: Signal Renewed

Component Behavior Trustworthiness

Leadership and ● Suspend operations and/or withdraw faulty ● Enact transformational leadership: act as a role
management product(s) model, symbolizing organizational values and
practice ● Reprimand, discipline, or remove culpable conduct; create a shared, value-driven vision and
parties goals
● Investigate practices, conduct, and attitudes ● Issue trust-enhancing communications
● Ensure enactment and compliance of reforms; ● Enhance the trustworthiness of other system
influence other system components to components (e.g., procedural fairness, ethical
regulate trustworthiness (e.g., change strategic goals and implementation)
incentives and reporting structures) ● Commit resources to trust repair effort (e.g., money,
time, manpower)
Culture and ● Use cultural interventions (e.g., induction, ● Use cultural interventions to instill values and
climate socialization) to instill values and norms that norms around integrity, honesty, competence,
discourage trust violations responsibility, reliability, and respect
● Impose sanctions for breaches of trust-related ● Create “cultural artifacts” that symbolize and
norms promote trustworthiness and affirm its priority over
● Create “cultural artifacts” that act as competing imperatives (e.g., codes of conduct,
deterrents (e.g., ethical codes of conduct, commemorative events, legends and stories)
public statements)
Strategy ● Shape organizational and unit-level priorities ● Revise strategy to be consistent with espoused
and goals (e.g., primacy of safety and trust-based values
integrity), resource allocations, and the ● Reform strategy to show an enduring commitment to
content of policies and procedures treat stakeholders benevolently and with integrity
● Direct behavior in line with organizational ● Promote ethical conduct and corporate social
strategies responsibility
Structures, ● Revise decision-making authority and ● Revise policies and procedures to ensure employees
policies, and accountability perceive them to be fair, effective, and just (e.g.,
processes ● Impose checks, balances, and disciplinary transparent and equitable appraisal systems,
procedures dispute resolution and whistleblowing procedures).
● Standardize work processes and training to ● Use recruitment, selection, induction, and training
compensate for lack of skills and/or procedures, emphasizing personal integrity and or-
knowledge ganizational values symbolizing trustworthiness
● Offer coaching and mentoring to assist
employees facing ethical dilemmas or
difficult decisions
External ● Comply with external regulatory codes of ● Voluntarily engage with external regulatory bodies
governance conduct and monitoring (e.g., professional, ● Seek licensing/accreditation (e.g., SA8000 on ethical
industry, consumer) conduct)
● Gain external accreditation, licensing, ● Campaign government for sector-wide regulations
approval, or audit
Public ● Make public statements committing the ● Use trust-enhancing communications, marketing,
reputation organization to uphold reformed strategies, and branding
operations, and targets ● Offer public apologies and reparations (where
● Internally publish the diagnosis, evaluations, appropriate)
and audits ● Voluntarily communicate to the public the diagnosis
and evaluations

onstration mechanisms can operate through level failure (Premise 2), trust repair requires
each organizational system component. that the “signals” emanating from the different
components reinforce, not undermine, renewed
trustworthiness. Given employees’ likely hyper-
The Principle of Congruence
vigilance and paranoia, any further transgres-
Because multiple organizational components sions, lapses, or inconsistencies, however mi-
contribute to both perceived organizational nor, can significantly impair the fragile trust
trustworthiness (Premise 1) and organization- repair effort. Isolated interventions to only one
136 Academy of Management Review January

component are unlikely, therefore, to provide employees’ perceptions of the organi-

sufficient evidence to convince employees that a zation’s trustworthiness will be.
predictable and sustainable difference in orga-
Implicit in our use of the two underlying
nizational trustworthiness has been realized.
mechanisms is the need to regulate distrust and
Rather, a coordinated set of interventions across
demonstrate trustworthiness across each of the
the multiple components contributing to the fail-
three dimensions of ability, benevolence, and
ure will be required. In line with systems think-
integrity. This has merit since organizational
ing, we propose that congruence is key to effec-
failures often involve faults in multiple dimen-
tive trust repair.
sions of trustworthiness. For example, investi-
We define congruence as the degree to which gations into the 1987 Zeebrugge ferry sinking
signals emanating from each component are and into the NASA Space Shuttle disasters re-
consistent together in demonstrating cues of re- vealed that these resulted not only from a lack of
newed organizational trustworthiness and in competence but also from a disregard for safety.
preventing future untrustworthy behavior. For Employees’ interpretations of failures may also
example, interventions emphasizing ethical differ from one another and may not settle on a
codes of conduct during socialization and train- single dimension; evidence of failure across all
ing activities are unlikely to change behavior if three dimensions may be evoked, albeit to vary-
workplace norms encourage questionable be- ing degrees. Controlled laboratory studies that
havior and performance management practices have deliberately manipulated only one type of
focus solely on target achievement at any cost. violation (e.g., ability or integrity) have shown
Since a lack of trustworthiness in just one com- that perceived trustworthiness in the other di-
ponent may undermine employees’ confidence, mension also declines (Dirks et al., 2005; Kim et
we do not see interventions across different al., 2004). Furthermore, employees’ hypervigi-
components as playing a strictly additive or in- lance in response to a failure is likely to apply
cremental role. Rather, a level of congruence across all three dimensions.
must be achieved before an appreciable in- While violations in one dimension may
crease in organizational trustworthiness can be contaminate perceptions in another, it does not
realized. This echoes the idea of alignment follow that the repair of one dimension neces-
among interdependent organizational elements sarily will enhance perceptions of other dimen-
(see Siggelkow, 2002) and of “internal fit” from sions. This view is supported by research indi-
strategic HRM (Wood, 1999). Congruence is cating that, after a trust violation, people pay
achieved when the organizational components more attention and attribute more significance
are realigned into an internally coherent config- to negative than positive evidence (Slovic, 1993)
uration that consistently signals reasonable and that individuals tend to weigh positive in-
standards of ability, benevolence, and integrity, formation more heavily than negative informa-
with no contradictory signals or competing im- tion when evaluating ability but tend to weigh
peratives elsewhere in the system. Just as be- negative information more heavily than positive
havioral integrity—the alignment of leaders’ information when evaluating integrity (Kim et
words and actions (Simons, 2002)— has been al., 2004: 107–108; Snyder & Stukas, 1999). Conse-
shown to be central to interpersonal trust and quently, it is unlikely that positive new evidence
credibility (Kouzes & Posner, 2002), congruence in one dimension will transfer to other dimen-
is pivotal to effective organizational trust repair. sions. As we elaborate later (see Propositions 7a
Proposition 2: The effectiveness of and 7b), this suggests that different types of
interventions are required to repair different as-
trust repair interventions is moderated
pects of trustworthiness. Hence, interventions
by the extent to which they achieve
addressing only one dimension will be inade-
congruence across organizational
quate to restore a robust reputation of trustwor-
components in (a) constraining
thiness.
untrustworthy behavior by organiza-
tional agents and (b) demonstrating Proposition 3: The effectiveness of
the organization’s trustworthiness. trust repair interventions is moderated
The greater the congruence, the stron- by the extent to which they address
ger the impact of the interventions on each of the three dimensions of trust-
2009 Gillespie and Dietz 137

worthiness, rather than just one di- establish its reputation, this response needs to
mension. The more multiple dimen- be well considered, timely, and credible.
sions are addressed, the stronger the Research suggests that the choice and se-
impact of the interventions on employ- quence of verbal responses impact trust repair.
ees’ perceptions of the organization’s From the range of available options, we do not
trustworthiness will be. see denying the failure has happened or excus-
ing the organization as credible responses. In
the context of organizational failures, responsi-
A PROCESS FOR REPAIRING
bility lies by definition at least in part with the
ORGANIZATIONAL TRUSTWORTHINESS
organization, and duplicitous impression man-
In this section we argue that robust, organiza- agement has been found to be ineffective (Bot-
tion-level trust repair involves a four-stage pro- tom et al., 2002) and unsustainable in the face of
cess (see Figure 2). The stages are informed by evidence of guilt (Kim et al., 2004). Rather, an
the trust and strategic change management lit- overarching standard for our trust repair pro-
erature (Burke & Litwin, 1992; Lewicki & Bunker, cess is accuracy and transparency (Korsgaard et
1996) and systems and multilevel theory, as well al., 2002).
as analysis of case study accounts of responses We propose that senior leaders’ first commu-
to failures. We describe the aims, rationale, and nication requires an acknowledgment that the
propositions for each stage and show how dis- failure has occurred and an expression of sin-
trust regulation and trustworthiness demonstra- cere regret for the consequences. Research sug-
tion underlie trust repair actions. gests these verbal responses aid forgiveness
and trust repair (Bottom et al., 2002). Committing
to a full investigation into the causes of the
Stage 1: Immediate Responses
failure and to measures to prevent future reoc-
A critical and urgent step for organizational currences is also essential. Together, these re-
representatives is an initial communication to sponses reassure employees, and they signal
employees and affected stakeholders about the the organization’s concern for stakeholders (be-
failure. As the organization’s first attempt to re- nevolence), commitment to understanding how

FIGURE 2
Propositions for the Principles and Four-Stage Process of Organization-Level Trust Repair
138 Academy of Management Review January

the violation occurred (integrity), and ability to management and (2) structures, policies, and
avoid a reoccurrence. Not offering any commu- processes. In contrast to the other components,
nication conveys a lack of concern and integrity, these are more amenable to rapid changes and
as well as incompetence. Such “reticence” has interventions (see Burke & Litwin, 1992).
proven ineffective for trust repair (Ferrin, Kim,
Proposition 4b: Timely, initial inter-
Cooper, & Dirks, 2007). For example, Exxon’s “no
ventions that prevent or constrain a
comment” stance immediately after the 1989
reoccurrence of the failure will posi-
Exxon Valdez oil spill alienated employees,
tively impact employees’ perceived or-
communities, and the media, damaging its cred-
ganizational trustworthiness.
ibility further.
Subsequent communications will be required
to convey the causes of the failure, the organi-
Stage 2: Diagnosis
zation’s full remedial response, and, where ap-
propriate, an apology and offer of reparations. The aim of the diagnosis is to systematically
However, rarely are the precise direct and indi- identify what contributed to the failure and
rect causes immediately known (see Premise 2), what needs to change so as to prevent similar
and a full diagnosis is likely to take consider- incidents in the future, as well as any other
able time. Therefore, we suggest that such com- actions required to restore trust. We propose
munications are not made until the diagnostic that the effectiveness of the diagnosis for trust
investigation is complete (see Stage 3), to avoid repair will be influenced by three qualities: ac-
premature and possibly inaccurate conclusions, curacy, transparency, and timeliness.
inappropriate blame, and ineffective responses Accuracy and transparency. The perceived
that may undermine trustworthiness further and adequacy of explanations is key to overcoming
leave the organization more vulnerable to legal negative reactions. Any diagnostic account
action and public condemnation. must provide “sufficient substance . . . to be be-
lievable” and match in its scope the magnitude
Proposition 4a: A timely initial com-
of the offence (Bottom et al., 2002: 499). In
munication acknowledging the occur-
line with Premise 2 and our principle of congru-
rence of the failure, expressing
ence, an accurate diagnosis requires system-
sincere regret for the (potential) con-
wide scope, extending beyond those agents and
sequences, and announcing a full
components that appear most directly associ-
investigation and commitment to pre-
ated with the failure to explore the role played
vent future reoccurrences will posi-
by each component in enabling and facilitating,
tively impact employees’ perceptions
or failing to prevent, the failure. A partial diag-
of the organization’s trustworthiness.
nosis may result in ineffective attempts to repair
With the announcement of the diagnostic in- trust. Accessing the accounts and tacit knowl-
vestigation, immediate interventions are re- edge of a representative cross-section of organi-
quired to rectify any causes of the failure that zational members about dysfunctional organiza-
can be established confidently prior to the diag- tional components will help to reduce bias and
nosis and that continue to pose a risk to stake- enhance diagnostic accuracy.
holders (distrust regulation). Inaction in the face Diagnostic processes can be manipulated,
of this awareness will be highly damaging to however. Organizations may try to keep their
the organization’s reputation, signaling incom- involvement in questionable practices covert, to
petence, questionable integrity, and even ma- recast the failure and damage in a more benign
levolent intent, whereas swift interventions will light (Greenberg, 1990), or to isolate blame to a
communicate the organization’s commitment to contained source (“scapegoats”). However, such
restoring its reputation (trustworthiness demon- “cheap talk” is rarely sufficient (Bottom et al.,
stration). Examples include suspending those 2002), and dishonest tactics can backfire (Kim et
people directly implicated, closing down or lim- al., 2004; Schlenker, Pontari, & Christopher,
iting operations, withdrawing goods, and warn- 2001). Apart from the lack of integrity in present-
ing stakeholders of the problem. Given the short ing a dishonest or inaccurate diagnosis, doing
time frame, we expect these efforts to focus on so is risky because some employees will have
two internal components: (1) leadership and insider status, networks, and/or knowledge giv-
2009 Gillespie and Dietz 139

ing them substantial evidence on which to judge ness. However, as stakeholders’ patience
the failure’s real causes. They may expose inac- quickly wears thin, the diagnosis needs to be
curacies, cover-ups, and whether the potential conducted and reported as soon as is practical.
for repeat failures remains to colleagues and A timely diagnosis is also important for ensur-
wider networks (whistleblowing; see Miceli & ing accuracy, since information, people, and
Near, 1985), engendering cynicism and hamper- other sources of “evidence” become less reliable
ing the repair effort. and accessible over time.
The effects of making the diagnostic findings A sense of urgency also demonstrates the or-
transparent are currently underexplored. Full ganization’s concern to prevent future transgres-
disclosure enables the accuracy of the diagno- sions and its ability to respond effectively. A
sis to be evaluated, which, if accepted, provides slow response signals incompetence and a lack
a shared understanding of the causes of the of benevolence for those affected, and it enables
failure and recommended reforms, enabling all system faults to fester unnecessarily, increasing
organizational members to consciously avoid the risk of future trust transgressions. Further-
and constrain the conditions contributing to the more, in the absence of an explanatory diagno-
failure. Without such information employees sis, employees will rely on subjective interpre-
will not know the rationale for the interventions tations and rumors to make sense of the failure
and will likely be uncommitted to them. Hence, (Kramer, 1996).
a transparent diagnosis facilitates distrust reg- Given research suggesting that third parties
ulation. The effects of transparency on trustwor- tend to amplify and accentuate negative over
thiness demonstration, however, are more com- positive information (Burt & Knez, 1996), counter-
plex. Paradoxically, full and frank disclosure of ing the inevitable rumor machine with a timely
the organization’s faults may damage employ- diagnosis is vital for trust repair. Interim diag-
ees’ trustworthiness perceptions further in the nostic reports summarizing verifiable prelimi-
short term, especially if failures of benevolence nary findings can help in this regard. In sum-
or integrity are implicated (cf. Snyder & Stukas, mary, we argue for a curvilinear effect for
1999). Yet not disclosing the findings and evi- timeliness on employees’ perceived organiza-
dence supporting them is likely to have an even tional trustworthiness.
more deleterious effect, suggesting the organi-
Proposition 5b: The timeliness of the
zation has something to hide and has not
diagnosis has a curvilinear relation-
learned from the failure. Adverse reactions are
ship with employees’ perceived orga-
likely, given employees’ hypervigilant state.
nizational trustworthiness. A prema-
Moreover, we anticipate that when disclosure is
ture or too slow diagnosis will be
enacted voluntarily for the purpose of organiza-
associated with low trustworthiness,
tional learning (Haunschild & Sullivan, 2002)
whereas a timely diagnosis will be
and to prevent future violations, the positive
associated with high trustworthi-
signals this sends about the organization’s in-
ness.
tegrity and benevolence (Nakayachi & Watabe,
2005) will counteract any potentially damaging
effects from the content of the findings.
Stage 3: Reforming Interventions
Proposition 5a: The impact of the diag-
The diagnostic information provides the foun-
nosis on employees’ perceptions of the
dation to devise and plan reforming interven-
organization’s trustworthiness is mod-
tions, including which organizational compo-
erated by its accuracy and transpar-
nents to target. Examples of trust-enhancing
ency. When both accuracy and trans-
interventions for each component and underly-
parency are high, the diagnosis will
ing mechanism are given in Table 1. In this
positively affect perceived organiza-
section we first discuss the communications re-
tional trustworthiness; when either is
quired postdiagnosis. We then consider how the
low, there will be a negative effect.
relative effectiveness of the two trust repair
Timeliness. As argued in Stage 1, a rushed mechanisms (distrust regulation and trustwor-
diagnosis does little to enhance, but rather may thiness demonstration) depend on the dimen-
damage, employees’ perceptions of trustworthi- sion of trustworthiness targeted.
140 Academy of Management Review January

Communication postdiagnosis. Where the di- an apology with external attribution,

agnosis reveals organizational responsibility, and (b) offers of reparations to affected
apologies (i.e., acknowledgement of responsibil- stakeholders will be more effective
ity and guilt) and offers of reparations to af- than no offers of reparations in restor-
fected stakeholders (i.e., forms of penance) can ing employees’ perceived organiza-
substantially aid trust repair (Bottom et al., 2002; tional trustworthiness.
Kim et al., 2004; Tomlinson et al., 2004). However,
Trust repair mechanisms. To reiterate, indi-
organizations often face legal, commercial,
viduals tend to weigh positive information more
and/or shareholder pressures to “save face” and
heavily than negative information when related
“never admit culpability,” potentially closing off
these conciliatory remedial responses in the to ability, but negative information more heavily
minds of management. Yet apologies are a pre- than positive information when related to integ-
requisite for reconciliation (Lewicki & Bunker, rity (Snyder & Stukas, 1999). Reeder and Brewer’s
1996), and taking responsibility for the conse- (1979) notion of “hierarchically restricted
quences of its actions in the face of such reper- schema” suggests this is because the “scope of
cussions strongly indicates an organization’s infection” differs for failures of ability versus
integrity and concern for those affected (Kors- failures of integrity. After an ability violation,
gaard et al., 2002). For example, BP’s decision to positive demonstrations of competence will re-
admit responsibility for the 2005 Texas City fire duce the likelihood the violation will be seen as
and to compensate bereaved families was her- a reliable indicator of incompetence, because
alded as “very brave” by industry commentators people believe intuitively that those with com-
(The Guardian, 2005). These responses also sig- petence can exhibit performance at a variety of
nal a commitment to prevent future violations, levels, whereas those who are incompetent can-
whereas avoidance of responsibility and rea- not (Kim et al., 2004). In contrast, failures of in-
sonable compensatory actions may damage tegrity or, we suggest, benevolence are inher-
trustworthiness still further, particularly if legal ently moral in nature and tend to be viewed as
battles and/or public condemnation ensues.3 reflecting grievous and enduring deficiencies of
Apologies will be most effective when an character that can be generalizable to other cir-
internal versus external attribution of responsi- cumstances in the future (Kim et al., 2004). After
bility is used (Kim, Dirks Cooper, & Ferrin 2006; an integrity or benevolence failure, a positive
Tomlinson et al., 2004), with the sincerity of ac- display of these qualities is likely to be dis-
knowledging direct responsibility (internal attri- counted as a signal of renewed trustworthiness,
bution) outweighing the negative implications given that those both with and without integrity
from conceded guilt. In contrast, alternative re- and benevolence can “display” honesty and
sponses— excuses, reticence, or citing external concern in certain situations. Consequently,
attributions—will be viewed as deceptive and these failures will be more difficult to remedy on
will therefore be less effective (Schlenker et al., the basis of positive trustworthiness demonstra-
2001), given the diagnostic evidence of the orga- tion. Interventions designed to constrain future
nization’s partial or full responsibility for the malevolent behavior (distrust regulation) will be
failure, coupled with employees’ “insider knowl- more convincing and effective. Hence, while
edge.” both mechanisms are important for trust repair,
we propose the following.
Proposition 6: Following the diagnosis
of an organizational failure, (a) an Proposition 7a: Trustworthiness dem-
apology with internal attribution will onstration mechanisms will be more
be more effective than no apology or effective for repairing employees’ per-
ceptions of organizational trustworthi-
ness after an ability failure than after
3
The reputation of Union Carbide (now part of Dow
integrity or benevolence failures.
Chemical) remains besmirched two decades after the Bho- Proposition 7b: Distrust regulation
pal chemical leak, largely because of the company’s failure
to effectively apologize and offer fair penance in the eyes of
mechanisms will be more effective for
victim groups and much of the public. The incident remains repairing employees’ perceptions of or-
the subject of class action in New York City courts. ganizational trustworthiness after in-
2009 Gillespie and Dietz 141

tegrity and benevolence failures than employees’ perceived organizational

after an ability failure. trustworthiness.

Stage 4: Evaluation IMPLICATIONS FOR RESEARCH AND

PRACTICE
Evaluations assessing the progress and effec-
tiveness of the interventions function as a dis- Despite the frequency of organizational fail-
trust regulation mechanism, identifying any ures reported in the media, to our knowledge,
persistent problem areas in the organization’s this is the first paper to provide managers and
defense against future violations. They provide consultants faced with the formidable challenge
ongoing diagnostic data to refine and embed of restoring employees’ trust after a failure with
reforming interventions and, importantly, a framework of principles, underlying mecha-
achieve congruence in the trust-related signals nisms, and a recommended process to guide
emanating from the multiple organizational organizational trust repair.
components. Given the difficulty of achieving Our framework highlights a number of dilem-
congruence and repairing trust system-wide, mas inherent in the trust repair process, which
successive cycles of evaluation followed by re- deserve further attention. One is the tension be-
forming interventions are likely to be required. tween the need for a “speedy response” and the
By institutionalizing the measurement of trust time required to ensure “due process.” Prioritiz-
levels, regular evaluations maintain attention ing speed risks not appreciating all factors con-
and effort on the trust repair process, enhancing tributing to the failure, resulting in superficial
its effectiveness and sustainability over time. actions that tackle symptoms but not the
We do not consider an evaluation to be es- cause(s). Yet too slow of a response is likely to
sential for trust repair, since restoring per- engender frustration and cynicism and risks
ceived organizational trustworthiness is pos- leaving the causes of the failure “live.” The
sible without an evaluation. Rather, an timeliness of the interventions may, therefore,
evaluation will augment the effectiveness of influence perceived trustworthiness in a curvi-
trust repair efforts and will strengthen per- linear fashion (similar to Proposition 5b). Stage 1
ceived organizational trustworthiness. If the of our trust repair process aims to balance both
evaluation stage is skipped, it will be difficult requirements. Future research is needed to ex-
to know how effective the repair efforts have plore the relative effectiveness of strategies for
been, and outstanding problems in the orga- managing this tension and the factors that in-
nizational system that damage organizational fluence the perceived timeliness of responses
trustworthiness will not be detected and, (e.g., Do interim reports help? Should interven-
hence, will remain unresolved. tions first target the organizational components
Similar to the diagnosis, an effective evalu- most amenable to change?).
ation needs to be accurate, systemic, multi- A second consideration is the cost-benefit
level, timely, and transparent. With these analysis of full trust repair versus a more lim-
qualities, the act of conducting evaluations, ited response. While we have argued for the
feeding back results, and implementing fur- necessity and merits of a comprehensive ap-
ther reforms based on the results signals abil- proach, this is not without potential costs and
ity (i.e., due diligence), benevolence (i.e., seek- risks. A systemic diagnosis and set of interven-
ing input and reinforcing concern to rebuild tions involves substantial time, effort, and re-
sources and may require widespread adapta-
relationships), and integrity (i.e., openness,
tion to organizational components to achieve
honesty, and ensuring commitments are ful-
congruence. This diversion of resources may im-
filled). In this respect, evaluations function
pede the organization’s competence in other ar-
also as a trustworthiness demonstration
eas. A transparent “warts and all” diagnosis
mechanism.
may further damage the organization’s internal
Proposition 8: Evaluating the effec- and external reputation for trustworthiness, at
tiveness of the reforming interventions least in the short term. Research is required to
and acting on the results will enhance explore this potential paradoxical effect and
142 Academy of Management Review January

whether it is ameliorated by a voluntary diag- erate or premeditated (e.g., Firestone/Bridges-

nosis, as we suggest. tone’s keeping secret known potentially
Where the organizational failure results in deadly faults with their tires; BBC Online,
harm to other stakeholders, an implication of 2000), the damage will be worse than if it is
our framework is that restoring employees’ per- perceived as unintended.
ceptions of trustworthiness requires reparative Another intriguing avenue for future research
actions toward other affected stakeholders. This is to examine our assertion that the assumptions
raises the challenge of balancing the poten- and recommendations for interpersonal trust re-
tially incompatible concerns, needs, and expec- pair are not readily transferable to the organi-
tations of employees with those of customers, zational level. Organizations have capacities for
investors, and regulators. To what extent and trust repair unavailable to individuals, such as
under what circumstances, therefore, is repara-
replacing “guilty” agents with new agents who
tive action toward other stakeholders pivotal to
symbolize a change in values, obtaining exter-
repairing employees’ trust?
nal validations of integrity and competence
We confine our discussion of the interconnect-
(e.g., accreditations), and using public relations
edness of the organizational components to the
conceptual level, proposing that a systemic, and marketing activities to change their reputa-
multilevel approach, coupled with the principle tion.
of congruence, is central to effective trust repair. When field studies into live trust repair pro-
Further research is required to understand the cesses are difficult to secure, we encourage ret-
specific interactions and interdependencies rospective case study methods (cf. Elangovan &
among the six components and how these influ- Shapiro, 1998), including document analysis and
ence trust repair. Following Klein and Kozlowski interviews, to explore organizational decision
(2000: 20 –21), are interventions to components making and its outcomes, and thereby to test
“proximal” to the direct experience of employ- aspects of our framework. Examining different
ees (e.g., structures, policies, and processes; companies’ responses following a sector-wide
work unit management practice and climate) breakdown in trust (e.g., accounting firms’ con-
more effective than interventions to more “dis- sultant-auditor conflicts of interest post-Enron)
tal” components (e.g., cultural change, revised would help control for external factors and pro-
strategies, new senior leadership)? Or is prox- vide a clearer evaluation of different repair
imity to the failure—addressing the most appar- strategies. Role play and scenario experiments
ent causes and components—more important? could also be used to test the relative influence
How might the influence of each component dif- of different trust repair strategies in a controlled
fer across organizations and for employees in way.
different roles, levels, and locations? A concluding remark: While the influence of
Our framework assumes that employees’ the external environment should not be over-
perceptions of organizational trustworthiness stated, amoral and malevolent organizational
are damaged by the failure. However, this may
choices and errors often occur in response to
not be a universal response (Schwartz & Gibb,
structurally embedded pressures and con-
1999: 37). Research is required to investigate
straints (e.g., performance targets, tight budgets,
perceptions of organizational failures and
competitor tactics). A common impression is that
what explains different reactions. To opera-
tionalize organization-level failures, research- the imperatives and incentives that invite un-
ers can examine employees’ impressions of ethical opportunism are increasing while the
the magnitude of the three conditions (within strength of countervailing constraints is de-
the organization’s locus of control, causing ac- creasing (e.g., deregulation, ineffective monitor-
tual or potential harm, threatening the organi- ing), resulting in an external environment that is
zation’s legitimacy). We further suggest that more demanding, more unpredictable, and more
while intentionality is not a necessary condi- conducive to trust failures (Thompson, 2003). Yet
tion, it will moderate the damage to percep- even in this hostile context, signals about which
tions of trustworthiness by contributing to in- behaviors are rewarded and punished are sent
terpretations of the failure’s magnitude. If the by all of us, as citizens, customers, investors,
organization’s (in)action is perceived as delib- advisors, and employees.
2009 Gillespie and Dietz 143

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2009 Gillespie and Dietz 145

Nicole Gillespie ([Link]@[Link]) is associate professor of organizational behav-

ior at Melbourne Business School, University of Melbourne. She received her Ph.D. in
psychology and management from the University of Melbourne. Her research interests
focus on the development and dynamics of trust in organizational contexts (particu-
larly trust repair, the measurement of trust, and trust across cultural divides), as well
as leadership, teams, and workplace stress and well-being.

Graham Dietz ([Link]@[Link]) is a lecturer in human resource manage-

ment at Durham Business School, Durham University. He received his Ph.D. in indus-
trial relations from the London School of Economics. His research interests include
trust, workplace partnership and joint consultation, and HRM and performance.