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Past research has generally purported that market orientation (MO) leads to superior firm performance, despite emerging evidence suggesting that the highest levels of MO are not always rewarded. Drawing on resource-based view and MO literature, the authors posit that too much MO may be as detrimental as too little for firms seeking to achieve better performance, and that moderate MO capabilities may be the most beneficial. Furthermore, the authors propose and test for organizational confidence as a first potential moderator of the MO-performance inverted U-shaped link.

The authors use Computer-Assisted-Text-Analysis (CATA) methodology assess constructs from annual reports matched with a 5-year longitudinal dataset of 2,245 firm-year observations drawn from the S&P 500.

The results not only support the presence of an inverted U-shaped link between MO and firm performance, but also identify organizational confidence as an important moderator of this newly uncovered curvilinear relationship.

When it comes to the effect of MO on firm performance, there can be indeed be “too much of a good thing,” and managers should be aware of the trade-offs that come attached with overcommitting to a MO strategy.

The authors contribute to extant research on the MO–performance link by moving beyond simple linear relationships and identifying an inverted U-shaped relationship between MO and firm performance. This newly found curvilinear relationship may explain and reconcile prior contradicting findings on the benefits of MO. Organizational confidence is also found to trigger a shape-flip of the MO–performance link, thereby suggesting a new boundary condition.

The purpose of this study is to investigate the link between downsizing cues and market performance prior to and after a major crisis. We use a recent exogenous shock – the COVID-19 pandemic – to test hypotheses on the nature of the relationship between downsizing cues and market performance within two distinct groups: pre and post-crisis. We purport that the sudden increase in uncertainty brought about by a major crisis widens information asymmetry between firms and their shareholders, and that top managers sending downsizing cues to the market with high levels of authenticity may be more likely to trigger positive market reactions.

The authors rely on computer-assisted text analysis (CATA) methodology, event-study methodology and a data set of 952 pre- and post-crisis earnings conference calls held by 476 S&P 500 firms to test the hypotheses in this study.

The authors find that downsizing cues have no effect on market performance in the pre-crisis group, but are negatively related to market performance in the post-crisis group. The authors also find that authenticity cues positively mitigate the relationship between downsizing cues and market performance relationship in the post-crisis group.

This empirical study extends our knowledge of the influence of a major crisis on the relationship between downsizing and market performance by leveraging the revelatory power of an exogenous environmental shock. The authors also explore the role played by managerial authenticity and find that the market is more inclined to accept post-crisis downsizing efforts when top managers are perceived as authentic.

The purpose of this paper is to focus on investor reactions to unanticipated changes in income, and whether those reactions can be mitigated by managerial discussion. The authors investigate how top-management team certainty and optimism during post-earnings announcement conference calls can serve as corrective actions and add back firm value in times of unexpected changes in firm-specific risk.

The research question is tested empirically in the context of large, publicly traded, US firms’ quarterly earnings announcements, and their subsequent post-earnings announcement conference calls. The authors use the advanced content analysis software DICTION to measure the levels of managerial certainty and optimism displayed during post-earnings announcement conference calls, and event-study methodology to measure investors’ reactions.

Results indicate that earnings surprises are negatively associated with firm value, but that this relationship is mitigated positively by displays of managerial certainty and optimism during post-earnings announcement conference calls.

This work uses an innovative research design to study top-management team rhetoric in post-earnings announcement conference calls, and how specific discussions mitigate investors’ negative reactions to increases in firm-specific risk. The study highlights the importance of top-management team certainty and optimism for value creation in times of change in firm-specific risk, and the importance of rhetoric as a tool for corrective action.

Financial analysts' roles and incentives mean that they have conflicting identities to maintain towards investors and firm managers. The authors study how analysts adopt various politeness strategies in their questioning to establish socially desirable identities in the Q&A of publicly accessible earnings calls.

The study is based on a sample of US firms with extreme earnings changes. 46 transcripts of end-of-year earnings calls were investigated with the help of linguistic discourse analysis, drawing on frameworks of face and linguistic politeness. For each transcript, the authors identified the structure of the face-threatening acts (FTAs) that arise when analysts ask probing questions and ascertained what specific politeness strategies, if any, are used by analysts to mitigate those FTAs. The authors examine how analysts perform identities through politeness in language and compare analysts' politeness behaviour and identity construction in the increasing earnings sub-sample with the decreasing earnings sub-sample.

Analysts negotiate different identities according to specific social contexts, promoting their identity as (1) competent professionals when firms report problematic performance by asking questions in a confrontational manner with few politeness strategies and (2) dependents of the firm by asking questions in a more polite manner when firms experience satisfactory performance. Analysts aim to present a socially desirable face in Q&A to influence managers' and investors' perceptions.

The study raises awareness about linguistic politeness as a communication strategy in the Q&A in earnings calls. It thereby enables managers and analysts to use linguistic politeness consciously and strategically and to recognise such use by others.

This study complements existing literature on earnings conference calls as part of external corporate communications by focusing on analysts' use of language when interacting with manages. To the best of our knowledge, this paper is the first to show that politeness underpins analysts' language use as a device for identity negotiations. This is important to understand because analysts' identities vis-a-vis managers and investors is closely related to the stability of the financial system.