International Negotiation Skills: Before Apologizing, Consider the Culture

In 2004, after Japanese regulators shut down Citigroup’s private bank in the country for breaking numerous laws, then-CEO Charles O. Prince made headlines by traveling to Japan, bowing deeply before television cameras, and apologizing for his firm’s mistakes. As unusual as it seemed in American eyes, the public apology was widely seen in Japan as a necessary first step in restarting Citigroup’s operations there.

An apology can be an effective means of restoring trust in negotiations and disputes, past research has found. In new experiments, William W. Maddux of INSEAD and his colleagues identify cultural differences in the way Japanese and American participants respond to apologies.