Anna Katharina Heid

The far-reaching influence of accounting narratives calls for investigation whether and how organizations in crisis use their letters to shareholders strategically to engage in impression management by signaling their trustworthiness. Using a novel methodology to measure the demonstration of trustworthiness, we provide evidence from a sample of 250 letters that organizations in crisis engage in impression management to demonstrate their trustworthiness by drawing on indirect trust-related lexical units, mostly associated with the trust antecedent integrity. The findings suggest that organizations in crisis perceive trustworthiness demonstration as a necessity to ensure allocation of resources and corporate survival. Drawing on impression management theory, the study evidences that trustworthiness demonstration is performed in an obfuscating manner that reflects organizations’ purpose to maintain an optimistic corporate image and avoid increased stakeholder alertness. Explaining whether an association between organizational crises and trustworthiness demonstration exists and how it can be measured, derived conclusions speak to the interests of corporate management, analysts and investors alike and demand for increased attention of current regulation on the influence accounting narratives may have.

The far-reaching influence of accounting narratives calls for investigation whether and how organizations in crisis use their letters to shareholders strategically to engage in impression management by signaling their trustworthiness. Using a novel methodology to measure the demonstration of trustworthiness, we provide evidence from a sample of 250 letters that organizations in crisis engage in impression management to demonstrate their trustworthiness by drawing on indirect trust-related lexical units, mostly associated with the trust antecedent integrity. The findings suggest that organizations in crisis perceive trustworthiness demonstration as a necessity to ensure allocation of resources and corporate survival. Drawing on impression management theory, the study evidences that trustworthiness demonstration is performed in an obfuscating manner that reflects organizations’ purpose to maintain an optimistic corporate image and avoid increased stakeholder alertness. Explaining whether an association between organizational crises and trustworthiness demonstration exists and how it can be measured, derived conclusions speak to the interests of corporate management, analysts and investors alike and demand for increased attention of current regulation on the influence accounting narratives may have.

Using a novel methodology to measure the demonstration of trustworthiness, we provide evidence in a sample of 126 Australian and New Zealand letters to shareholders that organisations in crisis strategically engage in impression management to demonstrate their trustworthiness by drawing on indirect trust-related lexical units, mostly associated with the trust antecedent integrity. The findings suggest that organisations in crisis perceive trustworthiness demonstration as a necessity to ensure allocation of resources and corporate survival. Drawing on impression management theory, the study further evidences that trustworthiness demonstration is performed in an obfuscating manner reflecting organisations’ purpose to maintain an optimistic corporate image and avoid increased stakeholder alertness. Explaining whether an association between organisational crises exists and how it can be measured, derived conclusions speak to the interests of corporate management, analysts and investors alike and demand for increased attention of current regulation on the influence accounting narratives may have.