A Fire Built on a Hill Will Bring Interested Parties: The Effects of Security Analyst Characteristics on Self-Serving Attribution in Corporate Communications

Date

2017

Authors

Takach, Stephen E.

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Abstract

In this dissertation I consider how the characteristics of security analysts may influence the attributions that CEOs provide for firm outcomes in the context of firm performance problems. This research focuses specifically on how a range of security analyst characteristics might function as contingencies, which may determine the extent to which CEOs of poorly performing firms offer self-serving attributions in the form of high levels of defensive attributions and/or low levels of counterdefensive attributions.

The conceptual framework I develop to address these issues integrates insights from attribution theory, the attributor-oriented theory of attributions, and contemporary social psychological research on accountability and impression management. Its central thesis is that CEOs will be less prone to offer self-serving attributions for outcomes in the face of firm performance difficulties to the extent that CEOs are concerned and/or uncertain about the security analyst audiences' evaluation of his/her leadership of their firm. A CEO may sense that analysts with high levels of certain characteristics have extensive knowledge about the factors that influence firm performance, which will increase the CEO's concern that overly self-serving accounts will lead to negative analyst assessments. This concern is likely to be amplified to the extent that the CEO senses that these analysts have high levels of influence over investors. I develop arguments in support of specific hypotheses that suggest that, because security analyst characteristics including high average security analyst coverage tenure, high average security analyst tenure with their current employer, high average security analyst experience, high average security analyst certifications of expertise, high average security analyst status, wide security analyst forecast dispersion, and wide security analyst recommendation dispersion will increase CEO's concern and/or uncertainty, CEOs will be less prone to offer self-serving attributions in the context of firm performance problems to the extent that the security analysts have these attributes. These predictions are tested using a unique dataset combining data on security analysts' characteristics from archival sources with data on CEO attributions for firm performance captured via content analysis of quarterly earnings conference calls with security analysts (N=147). Following a conservative approach to interpreting the results by examining the individual entry of interaction variables one at a time, only one interaction, high average security analyst status, had a significant effect (p<.05) in the expected direction. These results suggest that when analysts have high status the tendency for CEOs to engage in low levels of counterdefensive attributions in the face of poor firm performance is weakened. In the discussion section, I consider a number of factors, including low statistical power, which might contribute to the very limited support for my theoretical framework.

This dissertation contributes to understanding of the contexts that shape CEOs' tendencies to offer self-serving attributions when their firm is experiencing performance problems. It theorizes how CEOs' propensities to offer self-serving attributions in response to firm performance difficulties could be shaped by conditions likely to influence their concern and/or uncertainty about the security analyst audiences' evaluation of the CEO's leadership of his/her firm.

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Keywords

CEO, COUNTERDEFENSIVE ATTRIBUTION, DEFENSIVE ATTRIBUTION, JUSTIFICATION OF ORGANIZATIONAL PERFORMANCE, SECURITY ANALYST, SELF-SERVING ATTRIBUTION

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Department

Management