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We propose a four-stage model of the organizational actions that potentially increase the speed and likelihood that an organization will restore its legitimacy with stakeholders following a transgression. Organizations that work to discover the facts of the transgression, provide an appropriate explanation of their wrongdoing, accept and serve an equitable punishment, and make consistent internal and external rehabilitative changes increase the likelihood of meeting stakeholder demands and, consequently, have a higher probability of successfully achieving reintegration with stakeholders than those that do not.
Pfarrer et al. (Tue,) studied this question.
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