Three Essays on CEO's Impression Management
Hoskisson, Robert E; Li, Haiyang
Doctor of Philosophy
Impression management has been used by organizations, especially their top executives, in various situations so that they could influence the image of the organizations or top executives in the eyes of external audiences. An impression management process involves two parties, actors, who initiate impression management tactics, and targets, who give feedback to actors suggesting whether impression management is successful or not. My three essays intend to address different questions involved in this process. In particular, essay one addresses the question: how CEOs do impression management during mergers and acquisitions announcements? Given that acquirer firms tend to receive negative stock market reactions, I argue that CEOs have two different approaches to do impression management in this situation using strategic noise. More specifically, CEOs could either release positive strategic noise to offset potential negative effect, or release negative strategic noise to obscure the causal link between the acquisition announcements and negative stock market reactions. I find empirical support for my hypotheses based on zero-inflated negative binomial models. Essay two addresses the question: how impression management works when there are multiple target audiences? Does one target’s reaction influence another? To address these questions, I examine whether CEOs could adopt impression management tactics to influence analysts’ and investors’ reactions, and whether their reactions could ultimately affect boards’ decisions on CEO dismissal in the context of financial restatements. I find that CEOs tend to release more news after financial restatements that could improve investors’ and analysts’ reactions. Improved analysts’ reactions could reduce CEO dismissal likelihood after financial restatements. Essay three focuses on a different question: whether comparable firms’ situations affect the effectiveness of focal firm’s impression management? This question is especially critical when firms desire to engage in impression management in anticipation of negative news. I developed a theoretical model to address this question. In particular, I categorize all possible situations into four different scenarios based on the dimensions of consistency information and consensus information. I further discuss and compare different causal attribution strategies in each scenario. To achieve successful impression management, I suggest that firms provide explanations that are consistent with external audiences’ perceptions. In addition, beyond this objective information, external audiences’ reactions are also affected by their emotional and biased beliefs.
Impression Management; Mergers and Acquisitions; Financial Restatements; Negative News