CEOs typically offer apologies after transgressions are discovered whether mistakes were corrected or not. Seemingly insincere apologies, however, may damage the company by impugning its reputation. This study uses neurophysiologic data to identify why people believe apologies and identify when resolutions have occurred. Participants watched videos of corporate apologies and earned $3 for each video they watched. They could wager any of their earnings on whether the mistake was resolved with a chance to double their money. Participants could not consciously identify problem resolution, but the similarity of electrodermal activity and a measure of sympathetic and parasympathetic switching could with 61.3% accuracy ( p = .001). Wagers were unrelated to whether problems were resolved or not. Yet electrodermal activity components predicted whether a wager was made with 75% accuracy ( p = .001). Analysis of physiologic data showed that when leaders identify the problem in an opening statement, address the audience directly, use concrete language to describe how the company will remedy the problem, and minimize the harm done, physiologic arousal is reduced, signaling that the problem will be resolved. Our analysis shows that people believe insincere apologies when the statements made, whether truthful or not, produce a calming effect in listeners.

Trust in government institutions has been steadily declining, inhibiting the ability to serve the public effectively. We examined if organizational trust in five police departments (N = 531) affected job performance. The data show that trust improves on-the-job engagement (p = 0.0001) and enjoyment (p = 0.0000), reduces chronic stress (p = 0.0001), and is associated with a greater sense of purpose (p = 0.0000). We created a program to raise trust in one department and the data (N = 152) show that the intervention successfully increased organizational trust among program participants by 8.1% compared to nonparticipants. The program also had a positive effect on department performance, including a 6.1% increase in engagement, a 7.3% increase in job enjoyment, and a 10.5% increase in retention. Our analyses demonstrate that police leaders who create a culture of organizational trust achieve improved department performance.

Websites offering microfinance loans have become an increasingly popular form of investment. However, it is unclear why some projects offered on sites such as Kiva.org, Microplace.com, and Lendforpeace.org are more successful at meeting funding goals than others. The present article reports the results of an experiment to test if communicating social purpose enhances investment appeal and the neurophysiological mechanism through which this effect occurs. By connecting physiological and behavioral responses to microfinance requests for 101 participants, we found that investments with a social purpose, compared with those that were self-focused, received 25% more loans. Social purpose requests were associated with a significant reduction in two measures of physiologic arousal, resulted in greater empathic concern, and produced stronger negative affect compared with self-focused requests. These factors were largely driven by responses by women, who invested 90% more money to requests overall and 97% more to social purpose requests than did men. Our findings indicate that communicating social purpose is an effective way to attract more investment to entrepreneurs in developing countries.