In charisma we trust: The effects of CEO charismatic visions on securities analysts

Organization Science

Volumn 20, Issue 6, 2009, Pages 1011-1033

  Fanelli, Angelo ^a   Misangyi, Vilmos F ^b   Tosi, Henry L ^c,d  

^a HEC PARIS   (France)

^b PENNSYLVANIA STATE UNIVERSITY   (United States)

^c UNIVERSITY OF FLORIDA   (United States)

^d BOCCONI UNIVERSITY   (Italy)

Author keywords

CEOcharisma; Discourse analysis; Securities analysts; Stock market as a social construction

Indexed keywords

EID: 76949093738     PISSN: 10477039     EISSN: 15265455     Source Type: Journal    
DOI: 10.1287/orsc.1080.0407     Document Type: Article

References (106)

1. Abrahamson, E., C. Park. 1994. Concealment of negative organizational outcomes: An agency theory perspective. Acad. Management J. 37(5) 1302-1334.
2. Agle, B.R., N.J. Nagarajan, J.A. Sonnenfeld, D. Srinivasan. 2006. Does CEOcharisma matter? An empirical analysis of the relationships among organizational performance, environmental uncertainty, and top management team perceptions of CEO charisma. Acad. Management J. 49(1) 161-174.
3. Anderson, J. 2005. Morgan Stanley's choices: New direction or better execution? New York Times (June 14, 2005), http://www.nytimes.com/2005/06/14/business/14wall.html?th&emc=th.
4. Antonakis, J., L. Atwater. 2002. Leader distance: A review and proposed theory. Leadership Quart. 13(6) 673-704.
5. Arya, A., J. Glover, B. Mittendorf, G. Narayanamoorthy. 2005. Unintended consequences of regulating disclosures: The case of regulation fair disclosure. J. Accounting Public Policy 24(3) 243-252.
6. Ashforth, B.E., R.H. Humphrey. 1995. Emotion in the workplace: A reappraisal. Human Relations 48(2) 97-125.
7. Awamleh, R., W.L. Gardner. 1999. Perceptions of leader charisma and effectiveness: The effects of vision content, delivery, and organizational performance. Leadership Quart. 10(3) 345-373.
8. Barber, B., R. Lehavy, M. McNichols, B. Trueman. 2001. Can investors profit from the prophets? Security analyst recommendations and stock returns. J. Finance 56(2) 531-563.
9. Bauman, W.S., S. Datta, M.E. Iskandar-Datta. 1995. Investment analyst recommendations: A test of "the announcement effect" and "the valuable information effect." J. Bus. Finance Accounting 22(5) 659-670.
10. Beaver, W., B. Cornell, W.R. Landsman, S.R. Stubben. 2008. The impact of analysts' forecast errors and forecast revisions on stock prices. J. Bus. Finance Accounting 35(5/6) 709-740.
11. Bryk, A.S., S.W. Raudenbush. 1992. Hierarchical Linear Modelsm1tii.-1.colonori Applications and Data Analysis Methods. SAGE, Oxford, UK.
12. Cannella, A.A., M. Lubatkin. 1993. Succession as a sociopolitical process: Internal impediments to outsider selection. Acad. Management J. 36(4) 763-793.
13. Cannella, A.A., W. Shen. 2001. So close and yet so far: Promotion versus exit for CEOheirs apparent. Acad. Management J. 44(2) 252-270.
14. Chartered Financial Analyst Institute. 2005. CFA Program Facts and Statistics. http://www.cfainstitute.org/support/about/Member CandidateStatistics.html.
15. Chen, C.C., J.R. Meindl. 1991. The construction of leadership images in the popular press: The case of Donald Burr and People Express. Admin. Sci. Quart. 36(4) 521-551.
16. Cheney, K.H., L.T. Christensen. 2001. Organizational identity: Linkages between internal and external communication. F.M. Jablin, L.L. Putman, eds. The New Handbook of Organizational Communication. SAGE, Thousand Oaks, CA, 231-269.
17. Christie, W.G., R.D. Huang. 1995. Following the pied piper: Do individual returns herd around the market? Financial Analysts J. 51(4) 31-37.
18. Clemente, H.A. 1988. How to understand security analysts-Their needs, their motives. Financial Executive (Nov.-Dec.) 41-45.
19. Cohen, J. 1992. A power primer. Psych. Bull. 112(1) 155-159.
20. Conger, J., R.N. Kanungo. 1987. Toward a behavioral theory of charismatic leadership in organizational settings. Acad. Management Rev. 12(4) 637-647.
21. Conger, J., R.N. Kanungo. 1998. Charismatic Leadership in Organizations. SAGE, Thousand Oaks, CA.
22. D'Aveni, R.A., I.C. MacMillan. 1990. Crisis and content of managerial communications: A study of the focus of attention of top managers in surviving and failing firms. Admin. Sci. Quart. 35(4) 634-657.
23. Davis, G.F., D. McAdam, eds. 2000. Corporations, Classes and Social Movements After Managerialism, Vol. 22. JAI Press, Greenwich, CT.
24. Deephouse, D.L. 2000. Media reputation as a strategic resource: An integration of mass communication and resource based theories. J. Management 26(6) 1091-1112.
25. DeGeorge, F., J. Patel, R. Zeckhauser. 1999. Earnings management to exceed thresholds. J. Bus. 72(1) 1-33.
26. Emrich, C.G., H.H. Brower, J.M. Feldman, H. Garland. 2001. Images in words: Presidential rhetoric, charisma and greatness. Admin. Sci. Quart. 46(3) 527-557.
27. Epstein, M.J., K.G. Palepu. 1999. What financial analysts want. Strategic Finance 80(10) 48-53.
28. Fanelli, A., N. Grasselli. 2006. Defeating the Minotaur: The construction of CEOcharisma on the U.S. stock market. Organ. Stud. 27 811-832.
29. Fanelli, A., V.F. Misangyi. 2006. Bringing out CEOcharisma: CEO charisma and external stakeholders. Acad. Management Rev. 31(4) 1049-1061.
30. Feldman, J.M. 1981. Beyond attribution theory: Cognitive processes in performance appraisal. J. Appl. Psych. 66(2) 127-148.
31. Fligstein, N. 2001. The Architecture of Marketsm1tii.-1.colonori An Economic Sociology of Twenty-First-Century-Capitalist Markets. Princeton University Press, Princeton, NJ.
32. Flynn, F.J., B.M. Staw. 2004. Lend me your wallets: The effect of charismatic leadership on external support for an organization. Strategic Management J. 25(4) 309-330.
33. Francis, J., L. Soffer. 1997. The relative informativeness of analyst's stock recommendations and earning forecast revisions. J. Accounting Res. 35(2) 193-211.
34. Francis, J., J.D. Hanna, D.R. Philbrick. 1997. Management communication with securities analysts. J. Accounting Econom. 24(3) 363-394.
35. Gardner, W.L., B.J. Avolio. 1998. The charismatic relationship: A dramaturgical perspective. Acad. Management Rev. 23(1) 32-58.
36. Greene, W.H. 1997. Econometric Analysis, 3rd ed. Prentice-Hall, Inc., Upper Saddle River, NJ.
37. Hambrick, D.C., G.D.S. Fukutomi. 1991. The seasons of a CEO's tenure. Acad. Management Rev. 16(4) 719-742.
38. Hayward, M.L.A., D.C. Hambrick. 1997. Explaining the premiums paid for large acquisitions: Evidence of CEOhubris. Admin. Sci. Quart. 42(1) 103-127.
39. Hayward, M.L.A., V.P. Rindova, T.G. Pollock. 2004. Believing one's own press: The causes and consequences of CEOcelebrity. Strategic Management J. 25(7) 637-654.
40. Hong, H., J.D. Kubik, A. Solomon. 2000. Security analysts' career concerns and herding of earnings forecast. RAND J. Econom. 31(1) 121-144.
41. House, R.J. 1977. A 1976 theory of charismatic leadership. J.G. Hunt, L.L. Larson, eds. Leadershipm1tii.-1.colonori The Cutting Edge. Southern Illinois University Press, Carbondale, 189-207.
42. House, R.J., R.N. Aditya. 1997. The social scientific study of leadership: Quo vadis? Leadership Quart. 23(2) 409-473.
43. House, R.J., W.D. Spangler, J. Woycke. 1991. Personality and charisma in the U.S. presidency: A psychological theory of leader effectiveness. Admin. Sci. Quart. 36(3) 364-396.
44. Hunton, J.E., R.A. McEwen. 1997. An assessment of the relation between analysts' earnings forecast accuracy, motivational incentives and cognitive information search strategy. Accounting Rev. 72(4) 497-515.
45. Janis, I.L., R. Fadner. 1965. The coefficient of imbalance. H. Lasswell, N. Leites, and Associates, eds. Language of Politics. MIT Press, Cambridge, MA, 153-169.
46. Katz, D., R.L. Kahn. 1978. The Social Psychology of Organizations, 2nd ed. Wiley, New York.
47. Kelly, H.H. 1972. Attribution in social interaction. E.E. Jones, D.E. Kanouse, H.H. Kelley, R.E. Nisbett, S. Valins, B. Weiners, eds. Attributionm1tii.-1.colonori Perceiving the Causes of Behavior. General Learning Press, Morristown, NJ, 1-26.
48. Khurana, R. 2002. Searching for a Corporate Saviorm1tii.-1.colonori The Irrational Quest for Charismatic CEOs. Princeton University Press, Princeton, NJ.
49. Klein, K.J., R.J. House. 1995. On fire: Charismatic leadership and levels of analysis. Leadership Quart. 6(2) 183-198.
50. Laing, J.R. 1999. Riding into the sunset. Barron's 79 23-27.
51. Lang, M.H., R.J. Lundholm. 1996. Corporate disclosure policy and analyst behavior. Accounting Rev. 71(4) 467-492.
52. Law, K.S., C.S. Wong, W.H. Mobley. 1998. Toward a taxonomy of multidimensional constructs. Acad. Management Rev. 23(4) 741-755.
53. Lord, R.G., ed. 1985. An Information Processing Approach to Social Perceptions, Leadership and Behavioral Measurement in Organizations, Vol. 7. JAI Press, Greenwich, CT.
54. Malmendier, U., G. Tate. 2008. Who makes acquisitions? CEO overconfidence and the market's reaction. J. Financial Econom. 89 20-43.
55. Meindl, J.R. 1990. On leadership: An alternative to the conventional wisdom. B.M. Staw, L.L. Cummings, eds. Research in Organizational Behavior, Vol. 12. JAI Press, Greenwich, CT, 159-203.
56. Meindl, J.R. 1995. The romance of leadership as a follower-centric theory: A social constructionist approach. Leadership Quart. 6(3) 329-341.
57. Meindl, J.R., K.J. Thompson. 2005. The construction of charismatic leadership within industries. J.F. Porac, M. Ventresca, eds. Constructing Industries and Markets. Elsevier, Oxford, UK, 1-37.
58. Meyer, J.W., B. Rowan. 1977. Institutionalized organizations: Formal structure as myth and ceremony. Amer. J. Sociol. 83(2) 340-363.
59. Ocasio, W. 1999. Institutionalized action and corporate governance: The reliance on rules of CEO succession. Admin. Sci. Quart. 44(2) 384-416.
60. Pfeffer, J. 1981. Management as symbolic action: The creation and maintenance of organizational paradigms. L.L. Cummings, B.M. Staw, eds. Research in Organizational Behavior, Vol. 3. JAI Press, Greenwich, CT, 1-52.
61. Podolny, J.M. 1993. A status-based model of market competition. Amer. J. Sociol. 98(4) 829-972.
62. Podsakoff, P.M., S.B. Mackenzie, N.P. Podsakoff, J.Y. Lee. 2003. The mismeasure of man(agement) and its implications for leadership research. Leadership Quart. 14(6) 615-656.
63. Pollock, T.G., V.P. Rindova. 2003. Media legitimation effects in the market for initial public offerings. Acad. Management J. 46(5) 631-642.
64. Popping, R. 2000. Computer-Assisted Text Analysis. SAGE, London.
65. Porac, J.F., H. Thomas. 1990. Taxonomic mental models in competitor definition. Acad. Management Rev. 15(2) 224-240.
66. Porac, J.F., H. Thomas. 1994. Cognitive categorization and subjective rivalry among retailing firms. J. Appl. Psych. 79(1) 54-66.
67. Porac, J.F., J.B. Wade, T.G. Pollock. 1999. Industry categories and the politics of comparable firm in CEOcompensation. Admin. Sci. Quart. 44 112-144.
68. Rao, H., K. Sivakumar. 1999. Institutional sources of boundaryspanning structures: The establishment of investor relations departments in the Fortune 500 industrials. Organ. Sci. 10(1) 27-42.
69. Rao, H., H.R. Greve, G.F. Davis. 2001. Fool's gold: Social proof in the initiation and abandonment of coverage by Wall Street analysts. Admin. Sci. Quart. 46(3) 502-526.
70. Raudenbush, S.W., A.S. Bryk, Y.F. Cheong, R. Congdon. 2000. HLM 5m1tii.-1.colonori Hierarchical Linear and Nonlinear Modeling. Scientific Software International, Inc., Lincolnwood, IL.
71. Reingold, D. 2006. Confessions of a Wall Street Analyst: A True Story of Inside Information and Corruption in the Stock Market. Collins, New York.
72. Rindova, V.P., C.J. Fombrun. 1998. The eye of the beholder: The role of corporate reputation in defining organizational identity. D.A. Whetten, P.C. Godfrey, eds. Identity in Organization. SAGE Publications, Inc., Thousand Oaks, CA, 59-66.
73. Rindova, V.P., C.J. Fombrun. 1999. Constructing competitive advantage: The role of firm-constituent interactions. Strategic Management J. 20(8) 691-710.
74. Rindova, V.P., M. Becerra, I. Contardo. 2004. Enacting competitive wars: Competitive activity, language games, and market consequences. Acad. Management Rev. 29(4) 670-686.
75. Rindova, V.P., T.G. Pollock, M.L.A. Hayward. 2006. Celebrity firms: The social construction of market popularity. Acad. Management Rev. 31(1) 50-71.
76. Salancik, G.R., J. Pfeffer. 1978. A social information processing approach to job attitudes and task design. Admin. Sci. Quart. 23(2) 224-251.
77. Scott, W.R. 1995. Institutions and Organizations. SAGE, Inc., Thousand Oaks, CA.
78. Scott, S.G., V.R. Lane. 2000. A stakeholder approach to organizational identity. Acad. Management Rev. 25(1) 43-62.
79. Shamir, B. 1995. Social distance and charisma: Theoretical notes and an exploratory study. Leadership Quart. 6(1) 19-47.
80. Shamir, B., R.J. House, M.B. Arthur. 1993. The motivational effects of charismatic leadership: A self-concept based theory. Organ. Sci. 4(4) 577-594.
81. Shamir, B., E. Zakay, E. Breinin, M. Popper. 1998. Correlates of charismatic leader behavior in military units: Subordinates' attitudes, unit characteristics, and superiors' appraisals of leader performance. Acad. Management J. 41(4) 367-409.
82. Shen, W., A.A. Cannella, Jr. 2002. Revisiting the performance consequences of CEOsuccession: The impacts of successor type, postsuccession senior executive turnover, and departing CEO tenure. Acad. Management J. 45(4) 717-733.
83. Simon, H.A. 1945. Administrative Behavior, 4th ed. The Free Press. New York.
84. Sinha, P., L.D. Brown, S. Das. 1997. A re-examination of financial analysts' differential earnings forecast accuracy. Contemporary Accounting Res. 14(1) 1-42.
85. Staw, B.M., P.I. McKechnie, S.M. Puffer. 1983. The justification of organizational performance. Admin. Sci. Quart. 28 582-600.
86. Steyrer, J. 1998. Charisma and the archetypes of leadership. Organ. Stud. 19(5) 807-828.
87. Stickel, S.E. 1992. Reputation and performance among security analysts. J. Finance 47(5) 1811-1836.
88. Stickel, S.E. 1995. The anatomy of the performance of buy and sell recommendations. Financial Analysts J. 51(5) 25-39.
89. Suchman, M.C. 1995. Managing legitimacy: Strategic and institutional approaches. Acad. Management Rev. 20(3) 571-610.
90. Tosi, H.L., V.F. Misangyi, A. Fanelli, D.A. Waldman, F.J. Yammarino. 2004. CEOcharisma, compensation, and firm performance. Leadership Quart. 15(3) 405-420.
91. Useem, M. 1996. Investor Capitalismm1tii.-1.colonori How Money Managers are Changing the Face of Corporate America. Basic Books, New York.
92. Wade, J.B., J.F. Porac, T.G. Pollock. 1997. Worth, words, and the justification of executive pay. J. Organ. Behav. 18 641-664.
93. Wade, J.B., J.F. Porac, T.G. Pollock, S.D. Graffin. 2006. The burden of celebrity: The impact of CEOcertification contests on CEO pay and performance. Acad. Management J. 49(4) 643-660.
94. Waldman, D.A., F.J. Yammarino. 1999. CEOcharismatic leadership: Levels of management and levels of analysis effects. Acad. Management Rev. 24(2) 266-285.
95. Waldman, D.A., G.G. Ramirez, R.J. House, P. Puranam. 2001. Does leadership matter? CEOleadership attributes and profitability under conditions of perceived environmental uncertainty. Acad. Management J. 44(1) 134-143.
96. Weber, M. 1947. The Theory of Social and Economic Organization. A.H. Henderson, T. Parsons, eds. Free Press, Glencoe, IL.
97. Weber, R.P. 1988. Basic Content Analysis, 3rd ed. SAGE, Beverly Hills, CA.
98. Welch, I. 2000. Herding among security analysts. J. Financial Econom. 58(3) 369-396.
99. Westphal, J.D., E.J. Zajac. 1995. Accounting for the explanations of CEOcompensation: Substance and symbolism. Admin. Sci. Quart. 40(2) 283-308.
100. Westphal, J.D., E.J. Zajac. 1998. The symbolic management of stockholders: Corporate governance reforms and shareholder reactions. Admin. Sci. Quart. 43(1) 127-53.
101. Westphal, J.D., E.J. Zajac. 2001. Explaining institutional decoupling: The case of stock repurchase programs. Admin. Sci. Quart. 46(2) 202-228.
102. White, H.C. 1981. Where do markets come from? Amer. J. Sociol. 87(3) 517-547.
103. Womack, K.L. 1996. Do brokerage analysts' recommendations have investment value? J. Finance 51(1) 137-167.
104. Zajac, E.J., J.D. Westphal. 2004. The social construction of market value: Institutionalization and learning perspectives on stock market reactions. Amer. Sociol. Rev. 69(3) 433-457.
105. Zuckerman, E.W. 1999. The categorical imperative: Securities analysts and the illegitimacy discount. Amer. J. Sociol. 104(5) 1398-1438.
106. Zuckerman, E.W. 2000. Focusing the corporate product: Securities analysis and de-diversification. Admin. Sci. Quart. 45(3) 591-619.