Management & Organization
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Item Information in the Marketplace: Two Essays on Firm Strategies and Stakeholder Perceptions(2007-08-02) Pfarrer, Michael D.; Rindova, Violina P.; Business and Management: Management & Organization; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This dissertation consists of two essays that examine the role of information exchange in the marketplace and how firm strategies shape stakeholder perceptions of this information. In Essay 1, I develop a theoretical framework of Perceived Information Quality (PIQ), the extent to which stakeholders consider information useful in their evaluations of firm behavior. As PIQ increases, stakeholders' information asymmetry and evaluation costs decrease, thereby potentially leading to more transactions between the firm and its stakeholders, greater access to resources for the firm, and ultimately, a greater probability of the firm achieving economic success. However, stakeholders may perceive certain types of information about the firm to be more useful than others, depending on whether the firm is engaging in conforming or non-conforming behavior and whether information about these behaviors is received directly or through a mediated channel. Essay 2 looks at the relationships among firm intangible assets, investor perceptions, and financial outcomes. In Chapter 1, I examine the influence of firm reputation and celebrity on the likelihood of the firm announcing either a positive or negative earnings surprise. In Chapter 2, I examine the impact of reputation and celebrity on investors' reactions to the surprise announcement. Using a matched sample of 291 firms over a 15-year period, results show support for financial reputation decreasing the likelihood of positive and negative surprises, whereas one measure of firm celebrity, strategic deviance, predicts an increase only in the likelihood of negative surprises. Two additional celebrity measures, visibility and positive emotion, predict a greater likelihood of positive surprises and a lower likelihood of negative surprises respectively. In addition, results of post-hoc paired t-tests among six firm categories that group firms according to varying combinations of intangible assets show that reputation and visibility enhanced the returns of firms' announcing positive earnings surprises, but only reputation provided a buffer for negative surprises. Tests also showed that firms high in both reputation and visibility performed worst among the six groups. Thus, certain levels of reputation or visibility may enhance investor perceptions of the firm amid deviant behavior, but high levels of both may not.Item Reputation Building by New Ventures: Three Essays on Processes and Performance(2006-05-24) Petkova, Antoaneta Petkova; Gupta, Anil K.; Rindova, Violina P.; Management and Organization; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Management scholars have established the importance of reputation for firm performance but the mechanisms through which reputation can be accumulated are still to be explored. While some researchers have proposed that reputation accumulates through causally ambiguous social processes and can be built through continuous investments over time, there is little evidence regarding the nature of firm activities that may serve as strategic investments in reputation building. Prior research has focused primarily on studying reputation in large established firms that have both their prior performance, which can guide public perceptions and opinions, and substantial resources to make costly investments in product quality and advertising, which serve to increase their reputation. The tendency to study reputation among firms that already have accumulated some reputation does not allow for examining how this critical intangible asset comes into being and what factors account for the variance in the levels of reputation among young firms in an industry. This gap in the literature can be addressed by studying the process of reputation building in the context of new ventures (NVs), because such a context allows for examining the processes and different paths that may evolve from day one in the life of a firm. Specifically, my dissertation addresses these gaps in the current state of knowledge by examining the critical factors that determine the variations among NVs in their reputation building efforts, the factors that account for the relative efficiency of these efforts, and the performance implications of reputation building activities and reputational capital at different stages of the life of NVs. The dissertation is composed of three essays. The first essay describes the exploratory stage of this dissertation and provides initial insights regarding the activities that help NVs develop reputation early in their lives. The second essay provides a theoretical framework to understand the process of reputation building by NVs. I propose that NVs can build their initial reputations by investing in symbolic activities and critical resources that serve as signals of NVs' underlying quality and potential. The patterns and efficiency of such investments are likely to vary systematically depending on the founders' entrepreneurial experience and the technology and market uncertainty faced by NVs and their stakeholders. The third essay tests and provides empirical supports to the hypothesized model of reputation building in a sample of 415 information technology NVs.