Curious and analytical: How analysts evaluate and respond to executive communications about firm strategy

Deskripsi

How do analysts react to communication about firms' strategies? Research has shown that executive communication influences markets, but we know little about reactions to the deeper strategy content communicated. Drawing from research on how evaluative frames and expectation violations shape cognition, we show that when executives focus on growth strategies, analysts react by becoming more curious and analytically intensive. These changes in cognition partially mediate a positive effect on analysts' evaluations. Further, we consider two situations that reveal how analysts react to information that reinforces or violates their expectations, demonstrating different analyst reactions to similar strategies among S&P 500 firms. In doing so, we contribute new theory about how the evaluative assumptions of these influential market actors change and can be influenced by managerial framing.