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Helping Other CEOs Avoid Bad Press: Social Exchange and Impression Management Support among CEOs in Communications with Journalists

Westphal, James D.¹ Park, Sun Hyun² McDonald, Michael L.³ Hayward, Mathew L. A.⁴

Administrative Science Quarterly. Jun2012, Vol. 57 Issue 2, p217-268. 52p. 1 Diagram, 6 Charts.

Abstract:

In this study, we examine the determinants and consequences of impression management (IM) support in communications between CEOs and journalists, whereby CEOs of other firms provide positive statements about a focal CEO’s leadership and strategy and/or external attributions for low performance at the focal CEO’s firm. Drawing from social exchange theory, our theoretical perspective suggests how IM support may result from norms of reciprocity among corporate leaders. We consider the potential for direct and generalized reciprocity in the provision of IM support, including generalized reciprocity in which CEOs who received IM support previously pay the support forward to another third-party CEO, and a second form of generalized reciprocity in which CEOs reciprocate IM support to fellow CEOs whom they believe have given similar support to other CEOs in the past. We also draw from the social psychological literature on persuasion to suggest why IM support for another CEO may have a more positive influence on the tenor of journalists’ coverage about the firm’s leadership than impression management by the CEO about his or her own leadership and strategy. We test our hypotheses with data from large and mid-sized public U.S. companies from 1999 to 2007, including original survey data from a large sample of CEOs and journalists. The results supported our hypotheses, and additional findings suggested that the apparent effects of impression management by leaders and staff about their own firms following a negative earnings surprise may be partially attributable to the effects of IM support.

Avoiding Bad Press: Interpersonal Influence in Relations Between CEOs and Journalists and the Consequences for Press Reporting About Firms and Their Leadership

Westphal, James D.¹ westjd@umich.edu Deephouse, David L.² david.deephouse@ualberta.ca

Organization Science. Jul/Aug2011, Vol. 22 Issue 4, p1061-1086. 26p. 3 Charts, 2 Graphs.

Abstract:

In this study we consider how and when interpersonal relations between chief executive officers (CEOs) and journalists can influence the content of journalists’ reporting about corporate leaders and their firms. Specifically, we draw from the social psychological literature on interpersonal influence and social exchange to suggest (i) how the disclosure of relatively low corporate earnings may prompt the CEO to engage in ingratiatory behavior toward journalists, and (ii) how such behavior may be effective in prompting journalists to issue relatively positive reports about the CEO’s firm. We also extend our theory to consider how relatively negative journalist reports may prompt CEOs to retaliate against individual journalists by limiting or cutting off communication with the offending journalist, and how such retaliation may deter other journalists from issuing negative reports about the firm in the future. We find support for our hypotheses in a unique data set that includes large-sample survey data on CEO-journalist relations. We discuss how our research contributes to the growing literature in organization theory and strategy on the social processes by which corporate leaders influence the behavior of information intermediaries and other external constituents toward their firms. Moreover, we suggest that an implication of our findings is that top executives can actively influence the reputation of their firms, as well as their own reputations as corporate leaders, by engaging in interpersonal influence processes toward journalists.