The importance of being genuinely sorry when organizations apologize: how the Australian Wheat Board (AWB Limited) was damaged even further by its response to a corporate scandal

This paper draws on the unique insights offered by the documents tendered to the Royal Commission into the Australian Wheat Board (AWB Limited) to examine the process for drafting an apology within a scandalized organization suffering reputational damage. The Royal Commission received an almost complete set of documents specifying the process by which AWB prepared a public apology, as well as details of the efforts of the company to suppress those documents and the testimony of key personnel not only on the scandal itself but also on how the company responded to the crisis it had caused. The documents tendered to the Australian Government's Royal Commission included the working notes, drafting edits and expert advice from an international crisis communication consultant. AWB initially sought to try and manage the impact of the United Nations Oil‐for‐Food scandal, rather than address the causes of the transgression that would then allow the company to begin the process of restoring trust and rebuilding the damaged reputation. This disingenuous response exacerbated the problems for the company and caused additional damage to its corporate reputation. The insights from the AWB case study provide invaluable guidance for organizations on how to respond effectively to a corporate scandal. Copyright © 2012 John Wiley & Sons, Ltd.     

Inequality Amid Equality: Military Capabilities and Conflict Behavior in Balanced Dyads

Studies of power parity and conflict implicitly assume all balanced dyads are created equal. However, variation exists within the capabilities of the states in these particular dyads. I address the question of what affects the likelihood of conflict onset within relatively balanced dyads. I argue uncertainty—in particular the uncertainty of the expected costs of conflict—determines the likelihood of conflict among these dyads. More uncertainty of costs means a greater likelihood of miscalculation leading to bargaining errors. First, I argue as an opponent’s capabilities increase, uncertainty of costs increase and the likelihood of conflict increases. Second, military action serves a purpose in bargaining and can help reduce uncertainty by signaling a state’s willingness to inflict and endure costs in order to gain a better settlement. Third, information transmission is likely to be effective only when states have the capability to inflict significant costs. As such, while greater capabilities will lead to a high likelihood of conflict onset, they also lead to a reduced likelihood of conflict escalation. The testing of nondirected dyads from 1946 to 2001 supports the theory’s implications.