Entrepreneurial apologies: The mediating role of forgiveness on future cooperation

Entrepreneurs are expected to seek forgiveness from stakeholders for a transgression. While research has shown that apologies issued by entrepreneurs can be an effective tool for obtaining forgiveness, there is no assurance that an apology leading to stakeholder forgiveness will also necessarily restore future cooperation. We contend that entrepreneurial apologies are an effective mechanism for entrepreneurs to receive forgiveness and that forgiveness mediates the relationship between the apology and the restoration of future cooperation by reducing the amount of retributive justice sought by stakeholders. Quantitative analysis of data from a questionnaire administered to 268 U.S. university students and 120 U.S. participants on Mechanical Turk supports our contention, with participants found to be significantly more forgiving of an entrepreneurial transgression after receiving an apology and also more willing to engage in future cooperation with the new venture if forgiveness was restored. We also demonstrate the mediating effects of forgiveness on an apology, suggesting that restorative and retributive justice elements inherent in an apology interact to increase the overall effectiveness. Finally, it was also uncovered that compensation offers were significantly more restorative than non-explicit statements of contrition, explicit statements of contrition, empathy, and responsibility acknowledgements. •Apologies issued by entrepreneurs positively and significantly affect forgiveness and future cooperation.•Forgiveness mediates the relation between apologies and future cooperation.•Compensation offers are the most effective component of an entrepreneurial apology.