University of Surrey

Test tubes in the lab Research in the ATI Dance Research

What happens when companies (don’t) do what they said they would? Stock market reactions to strategic integrity

Mavis, Christos, Richter, Ansgar, Landau, Christian, Schmidt, Sascha L., Simons, Tony and Steinbock, Kai (2018) What happens when companies (don’t) do what they said they would? Stock market reactions to strategic integrity European Management Review.

[img] Text
What happens when companies (don’t) do what they said they would.pdf - Accepted version Manuscript
Restricted to Repository staff only until 18 January 2020.

Download (228kB)

Abstract

Literature on the “power of words” has emphasized the importance of a firm’s corporate communication as a source of legitimacy and reputation in the eyes of its stakeholders. We argue that it is not just the content or style of a firm’s communication about its strategy, but also the alignment between this communication and its subsequent strategic actions that help building legitimacy amongst stakeholders and creating firm performance. We introduce the organizationlevel construct of “strategic integrity” to capture the notion of alignment between a firm’s strategy communication and its subsequent strategic actions. We investigate the importance of strategic integrity using the case of the German pharmaceuticals firm Bayer AG in the context of its portfolio restructuring. The results of an event study of 98 acquisitions/divestments indicate that stock markets react positively to strategic integrity.

Item Type: Article
Divisions : Faculty of Arts and Social Sciences > Surrey Business School
Authors :
NameEmailORCID
Mavis, Christosc.mavis@surrey.ac.ukUNSPECIFIED
Richter, Ansgara.richter@surrey.ac.ukUNSPECIFIED
Landau, ChristianUNSPECIFIEDUNSPECIFIED
Schmidt, Sascha L.UNSPECIFIEDUNSPECIFIED
Simons, TonyUNSPECIFIEDUNSPECIFIED
Steinbock, KaiUNSPECIFIEDUNSPECIFIED
Date : 2018
Copyright Disclaimer : © 2017 European Academy of Management
Uncontrolled Keywords : Strategic integrity; Legitimacy; Strategy communication; Acquisitions/divestments; Event study
Depositing User : Clive Harris
Date Deposited : 18 Jan 2018 14:55
Last Modified : 18 Jan 2018 14:55
URI: http://epubs.surrey.ac.uk/id/eprint/845640

Actions (login required)

View Item View Item

Downloads

Downloads per month over past year


Information about this web site

© The University of Surrey, Guildford, Surrey, GU2 7XH, United Kingdom.
+44 (0)1483 300800