Silver Bullet or Ricochet? CEOs’ Use of Metaphorical Communication and Infomediaries’ Evaluations

Abstract

We combine literature on rhetoric and socially situated sensemaking to illuminate the challenges that emerge when chief executive officers (CEOs) try to influence infomediaries by using metaphorical communication-figurative linguistic expressions that convey thoughts and feelings by describing one domain, A, through another domain, B. Specifically, we theorize that because different infomediaries are situated in different thought worlds, CEOs' use of metaphorical communication has contradictory effects on journalists' and securities analysts' evaluations: while it triggers more favorable statements from journalists, it prompts more unfavorable assessments from analysts. Moreover, we integrate findings from cognitive psychology to argue that these contradictory effects increase the more a firm's performance falls behind market expectations. Our hypotheses find support in an extensive analysis of 937 quarterly earnings calls in the U.S. pharmaceutical, hardware, and software industries, and of journalists' statements and analysts' earnings forecasts and recommendations. Our novel theorizing and findings suggest that the use of discursive frames, especially in the form of metaphorical communication, in firms' interactions with critical audiences creates thought-provoking and thus-far neglected dilemmas. In developing and testing these thoughts, we contribute to and link ongoing conversations in management science, especially discussions of organizational reputation, executive communication, and impression management.

Media Coverage of Firms: Background, Integration, and Directions for Future Research

“…This ambiguity in language is, in turn, a predictor of the accuracy of the reporting. Future research could study further language characteristics such as readability, concreteness, or the use of metaphors and other tropes, all of which have been demonstrated to potentially have consequences for audience reception (König et al, 2018; Pan, McNamara, Lee, Haleblian, & Devers, 2018; H.-T. Tan, Wang, & Zhou, 2014).…”

“…However, research on media coverage of firms is spread across business disciplines, including management (e.g., Bundy & Pfarrer, 2015; Graffin, Bundy, Porac, Wade, & Quinn, 2013; König, Mammen, Luger, Fehn, & Enders, 2018; Pollock & Rindova, 2003; Westphal, Park, McDonald, & Hayward, 2012), finance (e.g., Dyck, Morese, & Zingales, 2010; Dyck, Volchkova, & Zingales, 2008; Engelberg & Parsons, 2011), accounting (e.g., Kothari, Li, & Short, 2009; Robinson, Xue, & Yu, 2011), and marketing (e.g., Chen, Liu, & Zhang, 2011; Rinallo & Basuroy, 2009). Such fragmentation (Carroll & Deephouse, 2014) has resulted in a diversity of theoretical frames, settings, and empirical methods.…”

The Value of Speaking for “Us”: the Relationship Between CEOs’ Use of I- and We-Referencing Language and Subsequent Organizational Performance

“…For example, although we believe them to be less relevant to the ideas we were seeking to test in the present research (because our focus was on intra-organizational responses to CEOs), marketbased indicators might provide insight into external perceptions of organizations. Relatedly, it would be interesting to explore whether (and how) external stakeholders react to CEOs' use of we-referencing language as a function of their identity-based relationship to the organization-as their reactions might differ from those of employees (König et al 2018).…”

No Need to Know It All: Implications of COVID‐19 for Corporate Communication Research

“…Messages with nearly identical content can have substantially different effects depending on the type of language used to construct them. Considering that firm communication is accessible to multiple stakeholders, scholars have studied how firms can craft their messages to manage the divergent interests of stakeholders (e.g., König et al, 2018). For instance, several studies have demonstrated the strategic value of complex and ambiguous language in helping communicators preserve flexibility in organizational settings (e.g., Sillince and Mueller, 2007).…”