The Impact of Company Apologies: Textual Analysis and Public Response

Companies may face crises resulting from situations in which their products or actions cause harm and how they choose to publicly acknowledge that harm can influence the public's response. The words used by the company in its statements and how the company takes responsibility for contributing to the situation have a powerful impact. Company apologies represent a forceful means of communication. Issuing an apology serves multiple purposes. It can appease the harmed party, comforting them in the knowledge that the party causing harm has taken responsibility. For a company apologizing and acknowledging steps they are taking, the public could feel assured that the company is implementing measures to avoid or prevent such harm in the future and also fuel goodwill. How companies craft their statements, the subsequent media reporting and social media transmission of these statements, and public and stock market response are the focus of this research.