Repairing Relationships within and Between Organizations_Building A Conceptual Foundation

INTRODUCTION TO SPECIAL TOPIC FORUM REPAIRING RELATIONSHIPS WITHIN AND BETWEEN ORGANIZATIONS: BUILDING A CONCEPTUAL FOUNDATION KURT T. DIRKS Washington University in St. Louis ROY J. LEWICKI The Ohio State University AKBAR ZAHEER University of Minnesota How can relationships be repaired after being damaged? There is a small but growing body of work on the topic from a number of different disciplinary perspectives using different theoretical lenses and at different levels of analysis. We begin by examining the existing streams of work on relationship repair and organizing them into a conceptual framework. We then consider four questions that probe assumptions or overlooked issues in existing research with the intent of moving toward a more comprehensive conceptual foundation. How can relationships be repaired after being damaged? The question is not new, but it has been made increasingly salient in recent years with reports of organizations damaging rela- tionships with employees, shareholders, and/or customers, and with even once-venerated insti- tutions involved in situations causing constitu- ents to question their trust in the institution and their relationship with it (e.g., religious institu- tions, media companies, governments). Not by coincidence, recent survey results have indi- cated that worldwide trust in companies and governments is near a low point (World Eco- nomic Forum, 2005) and that in the United States over half of employees do not trust the leaders of their organization (e.g., Mercer Human Resource Consulting, 2005; Watson Wyatt, 2007). More common, albeit less spectacular, incidents also arise in relationships between coworkers, lead- ers and subordinates, or departments for rea- sons such as conflicting goals, organizational changes, and conflicting values or cultures. For example, Robinson and Rousseau (1994) re- ported that over half of their respondents felt that their contractual relationship with their em- ployer had been violated, while Conway and Briner (2002) suggested an even higher percent- age of violations. Researchers also have ob- served that even close relationships involve negative events and conflict and that the resil- ience of relationships is contingent on how those events are resolved (Driver, Tabares, Sha- piro, Nahm, & Gottman, 2003). The phenomenon of damaged relationships has clearly been of interest to organizational research- ers. For example, organizational researchers have studied trust violations and the dynamics of dis- trust within and between organizations (e.g., Elangovan & Shapiro, 1998; Lewicki, McAllister, & Bies, 1998; Robinson, 1996; Sitkin & Roth, 1993; Za- heer, Lofstrom, & George, 2002), violations of psy- chological contracts (e.g., Morrison & Robinson, 1997; Robinson & Rousseau, 1994), negative rela- tions (e.g., Labianca, Brass, & Gray, 1998), feelings of injustice (e.g., Barclay, Skarlicki, & Pugh, 2005), revenge (e.g., Bies & Tripp, 1996), and defections in economic games (e.g., Komorita & Mechling, 1967), among other issues. However, much of the extant research has focused on the processes by which relationships are damaged and the implica- We thank Don Ferrin, Nicole Gillespie, Barbara Gray, Peter Kim, and Roger Mayer for their helpful comments and suggestions on earlier drafts of this article. � Academy of Management Review 2009, Vol. 34, No. 1, 68–84. 68 Copyright of the Academy of Management, all rights reserved. Contents may not be copied, emailed, posted to a listserv, or otherwise transmitted without the copyright holder’s express written permission. Users may print, download, or email articles for individual use only. tions of such damage, as opposed to how they are repaired. Only recently has the nascent interest in the problem of repairing relationships begun to gain momentum. For example, scholars have exam- ined how to repair trust (Ferrin, Kim, Cooper, & Dirks, 2007; Kim, Ferrin, Cooper, & Dirks, 2004; Lewicki & Bunker, 1996; Nakayachi & Watabe, 2005), how to promote forgiveness and reconcilia- tion (Bradfield & Aquino, 1999; Tomlinson, Dineen, & Lewicki, 2004), how to restore cooperation (Bot- tom, Gibson, Daniels, & Murnighan, 2002), and how to minimize the damage to reputations (Els- bach, 1994). Although these efforts are an excellent start, they tend to take place in relative isolation from each other, since they rely on a diversity of theories, define the problem in different ways, and have different foci. Furthermore, as yet, there are no unifying conceptual foundations or theoretical frameworks that will stimulate research and facil- itate analysis directed at the broader problem of relationship repair. The purpose of this special topic forum (STF) is to address these issues, with the central ob- jective being to stimulate research on this im- portant yet relatively underresearched topic. The STF includes four articles using several dif- ferent theoretical perspectives, involving differ- ent levels of analysis, and helping to build a conceptual foundation for research in the field. This introduction is also intended to address this larger objective—providing a conceptual foundation for future research—but in a manner that is different from the four articles. Whereas each of the articles in this STF contributes to- ward the overall goal by drilling deep into a particular aspect of the topic, here we attempt to provide a broader view of the terrain and to raise critical questions for future research. We begin by examining the existing streams of work on relationship repair and organizing them into a conceptual framework. In the second section we consider four questions that may pro- vide the basis for a more comprehensive and unified conceptual foundation. PROBLEM DOMAIN AND THEORETICAL PROCESSES Problem Domain What does it mean to “repair” a relationship? Existing research appears to have provided a range of answers. For example, Kim and col- leagues (2004, 2006) have investigated how trust (perceptions) can be made more positive after a trust violation (also see Lewicki & Bunker, 1996, and Nakayachi & Watabe, 2005). Schweitzer, Hershey, and Bradlow (2006) have adopted a similar but slightly broader definition of repair in examining how trust perceptions and behav- iors (specifically, risk-taking behaviors) can be made more positive following a transgression. Taking a different view, Bradfield and Aquino (1999) have examined the concepts of forgive- ness and reconciliation, conceptualized as re- leasing negative affect and forgoing revenge (also see Tomlinson et al., 2004). Taking a slightly different focus, Bottom et al. (2002) have examined the restoration of cooperation and positive affect following a transgression. The articles in this STF represent and advance these different views. Looking across these studies and the broader set of work that they represent, we see some convergence in terms of the general conceptual- ization of repair. Specifically, we propose the following conceptualization, which is in- tended to span the cross-disciplinary work on this topic: relationship repair occurs when a transgression causes the positive state(s) that constitute(s) the relationship to disappear and/or negative states to arise, as perceived by one or both parties, and activities by one or both parties substantively return the relation- ship to a positive state. As illustrated by the sample of studies cited above, however, there is divergence in the liter- ature in terms of exactly what factor of a rela- tionship is damaged and, thus, needs to be re- paired. Specifically, when a transgression occurs, there are several interrelated factors that are damaged and that need to be addressed for the future viability of the relationship. Fail- ing to identify the underlying structure of the problem could cause researchers to overlook as- pects of the broader problem of relationship re- pair, how related work is complementary or con- tradictory, and how future research could holistically tackle the problem. We address this issue by mapping the domain of relationship repair. As described below, existing research has identified three factors that are consistently im- pacted by a transgression and that have impor- tant implications for the viability of the relation- 2009 69Dirks, Lewicki, and Zaheer ship: trust, negative affect resulting from the transgression, and negative exchange resulting from the transgression. We suggest that each factor contributes a unique and important per- spective to what it means to repair a relation- ship, and, together, they provide an essential set of factors that jointly comprise the domains of relationship damage and repair. Research consistently implicates trust and perceived trustworthiness1 as cognitive factors that are negatively impacted in damaged rela- tionships (Robinson, 1996; Sitkin & Roth, 1993). Specifically, as a result of the transgression, individuals form inferences about the future be- havior of the party, positive expectations disap- pear and are replaced by negative expectations, and individuals become unwilling to expose themselves to further vulnerability (Lewicki et al., 1998). Trust is important for the future viabil- ity of the relationship because it serves as a lens for interpreting the party’s behavior, as well as a basis for making decisions about whether and how to interact with that party (Dirks & Ferrin, 2001). As McEvily, Perrone, and Zaheer (2003) have observed, trust operates as an “organizing principle” for managing relationships both within and across organizations. Researchers have also pointed out that, in ad- dition to a drop in trust, individuals experience negative affect after a transgression. It is well documented that individuals experience nega- tive emotions such as disappointment, frustra- tion, anger, and outrage following a transgres- sion (Barclay et al., 2005; Bies & Tripp, 1996; Conway & Briner, 2002; Lewicki & Bunker, 1996; Mikula, Scherer, & Athenstaedt, 1998; Morrison & Robinson, 1997). From the standpoint of repair- ing relationships, however, the transitory emo- tional states may be less important than the implications that the transgression has for the stable affective relationship with the offending party (e.g., general dislike, feelings of injustice). Negative affect has important implications for the viability of the relationship because it may negatively bias trust and because one party may terminate the relationship to avoid the neg- ative state. Finally, the above-cited research suggests that individuals are likely to suspend positive exchange (e.g., cooperation) and possibly even engage in negative exchange (e.g., retribution, revenge, withheld effort). For example, it is clear that cooperation drops following a transgres- sion and that this pattern is likely to continue until cooperation is extinguished (Bottom et al., 2002). In addition, the desire to punish the other party in some manner following a transgression appears to be a fundamental tendency, possibly of evolutionary origins (de Quervain et al., 2004). The implications of these negative behaviors and the need to shift the relationship back to- ward positive exchange are obvious for the via- bility of the relationship. Figure 1 provides a map of a representative sample of studies that have examined relation- ship repair with regard to these three outcomes. Readily apparent is that although studies have examined one or two of the domains, there ap- pear to be none directly addressing all three. Does this present a problem for understanding relationship repair? We explore this issue in a later section. Related to this issue, the narrow focus of many studies may obscure what is be- ing violated, what needs to be repaired, and what needs to be measured over time in this process. We also consider this issue in a later section. Processes for Relationship Repair If one were to select a set of studies from Figure 1 based on the outcome studied, on the level of analysis, or on the disciplinary basis, one might see a relatively focused view but also get the sense that other parts of the conceptual landscape are obscured. As one looks across a broader set of studies, however, a more varied landscape emerges. In order to make sense of this landscape, it is necessary to recognize that there are three different theoretical processes being advanced for the repair of relationships: attributional, social equilibrium, and structural. Table 1 provides a summary. One perspective focuses on the psychological processes of the party that perceives another party to have committed a transgression. Specif- ically, this perspective suggests that a trans- gression provides negative information, which 1 Because trustworthiness is a dominant determinant of trust (Mayer, Davis, & Schoorman, 1995) and because trust repair often occurs through the repair of perceived trustwor- thiness (Kim et al., 2004), both concepts are relevant. Throughout the paper, however, we use the term trust for convenience. 70 JanuaryAcademy of Management Review the perceiver uses to draw a negative inference about the traits and intentions of the other party (e.g., the party is untrustworthy). Repair must therefore provide information that can offset and overcome that negative inference. In other words, in order to repair trust, the wronged party must perceive that the transgression does not reflect the violator’s true nature, or the party must perceive that the violator has experienced redemption following the transgression. This process has been modeled by psychologists un- der the label of attribution theory (Heider, 1958). Tomlinson and Mayer (this issue), as well as other researchers (Kim et al., 2004), have demon- strated how attribution theory is particularly well suited to study the repair of trust. The prin- ciples of attribution theory can be applied when the transgressor is an individual, a group, or an organization, although there are some differ- ences in the theory’s applicability across levels of analysis (Hamilton & Sherman, 1996). Along these lines, Gillespie and Dietz (this issue) de- scribe how the attributional perspective relates to the repair of trust in organizations; this perspec- tive also underlies Rhee and Valdez’s (this issue) view of reputation repair. Research has docu- mented a variety of ways that transgressors can attempt to rebuild relationships through manag- ing the attribution process, including apologies and accounts (Kim et al., 2004, 2006; Tomlinson & Mayer, this issue), as well as substantive actions (Gillespie & Dietz, this issue). Although the attributional process is helpful for understanding the cognitive intraperson components of relationship repair, it is not well suited to explain the social or interpersonal as- pects of a relationship that are damaged follow- ing a transgression. Building on the sociological work of Goffman (1967), Ren and Gray (this is- sue) propose that transgressions “disrupt the so- cial order.” In other words, the transgression calls into question the relative standing of the FIGURE 1 The Conceptual Domain of Relationship Repair with Examples of Prior Research 2009 71Dirks, Lewicki, and Zaheer parties, as well as the conventions or norms that govern the relationship, thus creating social dis- equilibrium. To repair the relationship, it is im- portant to reestablish the equilibrium by restor- ing the relative standing of the parties and to reaffirm the norms that govern them through various social rituals (Goffman, 1967). Examples of such rituals include apologies, penance, and punishment (Bottom et al., 2002; Reb, Goldman, Kray, & Cropanzano, 2006; Ren & Gray, this is- sue). These rituals help to “settle the accounts” in the relationship as well as to reestablish the expectations in the relationship. Researchers have suggested that this social equilibrium pro- cess is crucial across a wide spectrum of con- texts, ranging from relationships within and be- tween complex social organizations (Reb et al., 2006) to straightforward exchanges between in- dividuals (Bottom et al., 2002) and even primates (de Waal, 1993). According to Ren and Gray, this process is particularly useful for decreasing negative affect and restoring positive exchange. In the focus on the intrapersonal and social processes involved, however, these perspectives give little consideration to the formal organiza- tional, group, or interpersonal structures, sys- tems, and incentives that may be put in place following a transgression and the role they may play in repairing a relationship. More specifi- cally, whereas the attributional process per- spective focuses on relationship repair via the cognitions of the violated party and the social equilibrium process perspective focuses on the social or interpersonal aspects of the relation- ship, the structural process suggests that it is necessary to change the contextual factors within which damaged relationships are situ- ated and to install structures, systems, or incen- TABLE 1 Process for Relationship Repair Attributional Social Equilibrium Structural Perspective Transgression leads to loss of trust through attribution process; repair involves cognitive processes by which trust is restored Transgression leads to disequilibrium in relationship and social context; repair involves social processes by which equilibrium in relationship is restored Transgression leads to breakdown in positive exchange and increase in negative exchange; repair involves structural processes by which negative exchange is discouraged and positive exchange is encouraged Assumption Individual differences of actor (trustworthiness) are primary determinant of behavior; therefore, perceivers are motivated to draw attributions and targets are motivated to shape those attributions Individuals desire to have equilibrium in norms and social relationships Individuals are motivated by self- interest in relationships; targets engage in transgressions when the incentives of a situation make it profitable to do so and perceivers will help maintain relationship so long as it is profitable Implications for repair strategies and tactics Targets will try to shape perceivers’ attributions about whether they committed a transgression, Targets will engage in appropriate social rituals to restore equilibrium in standing and norms Targets will implement structures or use other signals to provide credible assurance of positive exchange and prevent future whether it reflects on their true nature, or whether they experienced redemption Examples of tactics: social accounts, apologies, denial, penance Examples of tactics: penance, punishment, apologies transgressions Examples of tactics: legalistic remedies (incentives, monitoring), social structures Examples of articles Gillespie & Dietz (2009); Kim, Dirks, Cooper, & Ferrin (2006); Kim, Ferrin, Cooper, & Dirks (2004); Rhee & Valdez (2009); Tomlinson & Mayer (2009) Bottom, Gibson, Daniels, & Murnighan (2002); Bradfield & Aquino (1999); Reb, Goldman, Kray, & Cropanzano (2006); Ren & Gray (2009) Gillespie & Dietz (2009); Lindskold (1978); Nakayachi & Watabe (2005); Sitkin & Roth (1993) 72 JanuaryAcademy of Management Review tives that discourage or prevent future trans- gressions. To the extent that factors are put in place following a transgression, the aggrieved party may begin to form positive expectations about the other party’s future behavior. Several examples of this idea exist in the lit- erature. Sitkin and Roth (1993) refer to the role of “legalistic remedies”—that is, the use of various controls (e.g., policies, procedures, contracts, monitoring) that increase the reliability of future behavior and therefore restore trust. In this issue Gillespie and Dietz discuss a similar concept, which they term a distrust regulation mecha- nism. Similarly, Nakayachi and Watabe (2005) use t