The Self-promotion Penalty: How Self-promotion Increases Vulnerability to Withdrawals of Analyst Support after Missed Expectation

Abstract: In my dissertation I theorize how organizational self-promotion, a fundamental impression management technique by which firms attempt to build support from external audiences, may also increase the firms’ vulnerability to withdrawals of support should they fail to meet audience expectations. Focusing on the assessments of security analysts, I develop a social psychological perspective on the interpretation of impression management, to theorize why, after a firm falls short of an analyst’s earnings expectations, the analyst will be more likely to downgrade or drop the firm to the extent that it previously self-promoted. I then extend this perspective to explain why the penalty from self-promotion may be heightened for firms with a limited prior history for the analysts to base their earnings forecasts on. Specifically, I theorize why analysts are likely to place greater weight in the self-promoting statements of newly public organizations, increasing the likelihood that recently public self-promoting firms will be downgraded or dropped should they miss the analysts’ earnings expectations. I then discuss the dissertation’s contributions to the literature on impression management, and the difficulties facing young organizations.

Committee:
​James Westphal (Chair), Strategy, University of Michigan
​Michael Jensen, Strategy, University of Michigan
Jerry Davis, Management and Organizations, University of Michigan
Mark Mizruchi, Sociology, University of Michigan