The informativeness of impression management − financial analysts and rhetorical style of CEO letters
ISSN: 0114-0582
Article publication date: 3 June 2019
Issue publication date: 8 October 2019
Abstract
Purpose
This paper aims to investigate the informativeness of rhetorical impression management patterns of CEO letters and examines whether these rhetorical features affect financial analysts’ forecasting behaviour.
Design/methodology/approach
The authors use textual analysis on a sample of 526 CEO letters of US firms and apply factor analysis on individual linguistic style measures to identify co-occurrence patterns of style features.
Findings
The authors identify three holistic style patterns (assertive acclaiming, cautious plausibility-based framing and logic-based rationalizing) and find that assertive rhetorical feature in CEO letters is negatively related with the dispersion of financial analysts’ earnings forecasts and positively associated with earnings forecast accuracy. CEOs’ use of a rationalizing rhetorical pattern tends to decrease the dispersion of financial analysts’ earnings, whereas a cautious plausibility-based rhetorical position is only marginally instrumental in getting more accurate earnings predictions.
Practical implications
Whilst impression management communication is often theorized as manipulative and void of real information content, the findings suggest that impression management serves both self-presentation and information-sharing purposes.
Originality/value
This paper elaborates on the co-occurrence of style characteristics in management communication and is a first attempt to validate the external ramifications of holistic style profiles of corporate narratives by focusing on an economic target audience.
Keywords
Citation
Yan, B., Aerts, W. and Thewissen, J. (2019), "The informativeness of impression management − financial analysts and rhetorical style of CEO letters", Pacific Accounting Review, Vol. 31 No. 3, pp. 462-496. https://doi.org/10.1108/PAR-09-2017-0063
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited