MANAGERS AND ANALYSTS: AN EXAMINATION OF MUTUAL INFLUENCE

Securities analysts' predictions of firms' earnings per share constitute important performance targets for those firms. Firm managers attempt to both influence analysts' targets and achieve the targets. We draw on the impression management literature to offer hypotheses regarding how...

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Bibliographic Details
Published in:Academy of Management journal 2014-06, Vol.57 (3), p.849-868
Main Authors: WASHBURN, MARK, BROMILEY, PHILIP
Format: Article
Language:English
Subjects:
Analytical forecasting
Business entities
Chief executive officers
Creative accounting
Earnings forecasting
Earnings per share
Economic analysis
Economic forecasts
Experimental methods
Forecasting models
Forecasts
Influence
Investors
Management science
Managers
Organizational effectiveness
Press releases
Securities analysis
Statistical forecasts
Studies
Teleconferencing
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Summary:Securities analysts' predictions of firms' earnings per share constitute important performance targets for those firms. Firm managers attempt to both influence analysts' targets and achieve the targets. We draw on the impression management literature to offer hypotheses regarding how a firm's performance relative to prior targets influences the impression management activities of issuing forecast guidance, having conference calls with analysts, and issuing press releases. We also consider the influence of these impression management activities on subsequent analysts' targets. We test this dyadic representation of impression management activities using a longitudinal panel of large firms. Findings suggest managers take a variety of actions that vary with firm performance, and that some of those actions influence subsequent analyst targets under some conditions.
ISSN:0001-4273
1948-0989
DOI:10.5465/amj.2011.0420