Accentuate the positive? Strategic negativity amid the hazard of high expectations

• 成果类型: Article
• 署名作者: Parker, Owen N.; Short, Cole E.; Titus, Varkey K.; Gong, Ke; Nahm, Peter Inho
• 署名单位: University of Texas System; University of Texas Arlington; Pepperdine University; University of Nebraska System; University of Nebraska Lincoln; University of Southern Mississippi; Texas A&M University System; Texas A&M University College Station
• 刊物名称: STRATEGIC MANAGEMENT JOURNAL
• ISSN/ISSBN: 0143-2095
• DOI: 10.1002/smj.3603
• 发表日期: 2024
• 页码: 1851-1874
• 关键词: earnings surprise; Impression management; negative speech; quantile regression; stakeholder

摘要

Research SummaryWhile previous organizational impression mnagement (OIM) research focuses on highlighting firms in a favorable light, we explore CEOs' use of strategic negativity to manage expectations. We draw on OIM's psychological roots to predict that despite pressure to be positive, when CEOs perceive stakeholders are motivated to raise their expectations and have an opportunity to do so, CEOs strategically use negativity to counteract this anticipated expectation increase. We test our predictions on 7330 quarterly earnings calls from 370 publicly traded firms (2008-2019), examining how the motive of a positive material earnings surprise and opportunity of a new fiscal year jointly increase CEO negativity in prepared remarks. We elaborate the wide applicability of strategic negativity, the other side of the OIM phenomenon.Managerial SummaryIn contrast to the prevailing view that CEOs usually positively spin the firm's situation to stakeholders, we investigate how CEOs strategically use negativity to counteract stakeholder optimism, provided CEOs perceive expectations are likely to rocket upward. We argue that positive news represents a motive and a chance to reflect represents an opportunity, and that together they risk raising expectations. Analyzing 7330 quarterly earnings calls of 370 companies (2008-2019), we specifically examined how both (1) a positive earnings surprise and (2) a new fiscal year force CEOs out of their positivity comfort zone and encourage them to be strategically negative in earnings call remarks, to try to lower stakeholder expectations. Our results support this view and pave the way for future research.