Abstract

This paper provides a model on repairing re-establishing stakeholder relationships after a firm engages in a moral indiscretion. Depending upon their nature, indiscretions can be classified as mistakes, misconduct, or improprieties. After committing an indiscretion, firms can attempt to reestablish positive stakeholder relationships by strengthening their technical competency (for mistakes), improving their reputation (for misconduct), and enhancing their goodwill with relevant stakeholders (for improprieties). However, a firm’s cultural orientation may result in the misapplication of the stakeholder repair mechanism (competency, reputation, and goodwill) with the applicable indiscretion (mistakes, misconduct, and improprieties).