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Impression management and retrospective sense-making in corporate narratives: A social psychology perspective

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Abstract:

Purpose ‐ Prior accounting research views impression management predominantly though the lens of economics. Drawing on social psychology research, this paper seeks to provide a complementary perspective on corporate annual narrative reporting as characterised by conditions of "ex post accountability". These give rise to impression management resulting from the managerial anticipation of the feedback effects of information and/or to managerial sense-making by means of the retrospective framing of organisational outcomes. Design/methodology/approach ‐ A content analysis approach pioneered by psychology research is used, which is based on the psychological dimension of word use, to investigate the chairmen's statements of 93 UK listed companies. Findings ‐ Results suggest that firms do not use chairmen's statements to create an impression at variance with an overall reading of the annual report. It was found that negative organisational outcomes prompt managers to engage in retrospective sense-making, rather than to present a public image of organisational performance inconsistent with the view internally held by management (self-presentational dissimulation). Further, managers of large firms use chairmen's statements to portray an accurate (i.e. consistent with an overall reading of the annual report), albeit favourable, image of the firm and of organisational outcomes (i.e. impression management by means of enhancement). Originality/value ‐ The approach makes it possible to investigate three complementary scenarios of managerial corporate annual reporting behaviour: self-presentational dissimulation, impression management by means of enhancement, and retrospective sense-making.

Keywords: Annual reports; Chairmen; Social psychology

Document Type: Research Article

DOI: https://doi.org/10.1108/09513571111124036

Publication date: 2011-03-29

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