ABSTRACT
Organizational trust is a fundamental building block of organizations. However, as the recent corporate governance crises demonstrate, trust is often very difficult to restore once broken (Kramer & Lewicki, 2009). Understanding how organizational trust can be repaired has become an important topic for researchers in organization studies, as well as for practitioners (Bachmann, Gillespie & Priem, 2015; Kramer & Lewicki, 2010). A recent example that high lights the practical focus of this work is the emissions scandal at Volkswagen. The Volkswagen Group built their reputation on manufacturing environmentally friendly cars pledging that by 2018 the company would be the world’s most environmentally friendly car manufacturer. Yet in May 2015, it was revealed that Volkswagen vehicles were producing emissions up to 40 times higher than the US legal limit. The report prompted regulatory investigations and, in September 2015, Volkswagen admitted to installing ‘defeat devices’ in their vehicles that sensed test situations and put the vehicle into a ‘test mode’ running the engine below normal power and performance. On the road, however, the test mode was switched off, and the car emitted much higher pollutants. The revelation sent a shockwave across Volkswagen’s stakeholders, undermining trust, casting a crippling blow to the company’s reputation and exposing the company to billions in recall costs, fines and potential criminal charges.
