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Pseudo-Precision? Precise Forecasts and Impression Management in Managerial Earnings Forecasts.

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The Academy of Management Journal

Published online on

Abstract

We examine earnings guidance precision as a mechanism of organization impression management (OIM) and, specifically, suggest that strategic leaders use very precise earnings forecasts as an OIM tactic to convey a greater sense of authority and control over organizational performance after material organizational setbacks. Contributing to the OIM literature, we argue that the use of more precise judgment makes use of different physiological mechanisms than kinds of OIM that have been previously studied. Results presented here suggest that a) OIM is an important motivation for more precise earnings forecasts b) precision as an OIM tactic is more likely to arise when managers convey impressions of brighter performance prospects and c) investors generally respond favorably to the tactic.