Studies about Perceptions of Company Performance: Impression Management
Abstract: The purpose of this research is to investigate two particular forms of impression management commonly found in corporate annual reports, the distortion of narratives and graph manipulation. Little is known about the potential effects these manipulations have on decisions made by annual report users. A laboratory experiment was performed in which participants were provided with a pack of information for two fictional companies and required to make an investment decision. No significant difference was found between the investment decisions of the participants, confirming previous findings that impression management does not affect corporate annual report users’ perceptions of company performance.
Introduction: Many different types of impression management have been identified as occurring in corporate annual reports. However, the potential effect of these manipulations is not known (Stanton et al, 2004). The aim in this study is to identify the effects of two forms of impression management on corporate annual report users’ perceptions of company performance in an experimental setting. The first form of manipulation considered is that of the directness of Chairman’s Statements, a narrative commonly found in corporate annual reports. Directness relates to the placement of information within a narrative. The second manipulation of interest relates to graph measurement distortion which occurs when the change in a graph is proportionately greater than the change in the underlying data, resulting in potential misrepresentation of the data. Keep reading…
