Strategic short termism as an issue of top-teams' temporal orientation

Short-termism among firms, the tendency to excessively discount long-term benefits and favour less valuable short-term benefits, has been a prominent issue in business and public policy debates but research to date has been inconclusive. We study how managers frame, interpret, and resolve problems of intertemporal choice in actual decisions by using computer aided text analysis to measure the frequency of top-team temporal references in 1653 listed Australian firms between 1992-2005. Contrary to short-termism arguments we find evidence of a significant general increase in Future orientation and a significant decrease in Current/Past orientation. We also show top-teams’ temporal orientation is related to their strategic orientation, specifically the extent to which they focus on Innovation-Expansion and Capacity Building

Studying Strategic Cognition by Content Analysis of Annual Reports: A Validation Involving Firm Innovation

We test the psychometric validity of a new measure of managerial cognitive focus on innovation described in Kabanoff and Brown (in press). The new measure and six other cognitive strategic dimensions are derived using machine learning and content analysis of top management messages in annual reports of Australian Stock Exchange listed firms (1992-04). A pre-existing, independently-derived economic measure of successful value adding innovation (the Intellectual Property Research Institute of Australia’s annually calculated enterprise-level Innovation Index Score (IIS) (2002-04)) is used to test for convergent and discriminant validity as well as compare temporal stability. Additional examination shows the association between the measure of cognitive focus on innovation and IIS is consistent with expectations derived from analysis of then derivation and calculation of IIS. Demonstration of associations between the cognitive and economic measures of innovation partly addresses three of McGee’s (2005) ‘make-or-break’ issues that face cognitive approaches to theories of firmlevel strategising

Managerial cognition and reputation: does communication about firms' intangibles affect performance?

Corporate reputation is viewed as fundamental to firm performance, growth and survival and the maintenance and enhancement of that reputation is a key responsibility of senior executives. However, relatively little is known about the main dimensions of corporate reputation and the amount of attention given to them by senior executives. Based on the corporate reputation and intangible resources literatures, thirteen reputational elements were identified and the amount of attention given to those elements in a large, longitudinal sample of annual reports from Australian firms was measured using computer aided text analysis. This identified five, main reputational dimensions that were both stable over time and related to firms’ future financial performance

Star performers: task and contextual performance are components, but are they enough?

Identifying outstanding performers or ‘stars’ is a critical component of managing talent. However, organizational effectiveness in this area is limited by the current lack of guidance about the behaviour and characteristics of stars. We address this gap by combining a conceptual analysis with an empirical study involving 174 managers. Conceptually we examine the alignment of managers’ perceptions of outstanding performance with the well established task and contextual performance model and find this framework accounts for a core element in managers’ judgments about outstanding performers. However, a second, more qualitative approach finds that other dimensions including being self-directed, and a willingness to lead are also important. Our findings are consistent with a long-term trend toward identifying work effectiveness with highly discretionary, psychological and behavioural elements, and we consider the implications of this for the study and management of high level, individual effectiveness

Doing what they say or saying what they do?:Australian organisations' signals of performance and attitudes

This paper investigates the role of words, i.e. text content, in annual reports. Using word counts of references to different geographic regions over seven years as an indicator of the level of attention companies are giving to regions, we investigate three issues. (1) is level of attention related to firms' level of investment and profitability in a region; (2) is level of attention related to future investment and profitability in a region, and (3) what are some of the environmental drivers of the level of attention firms give to a regions? Although this research asks a very limited set of questions-how does a firm's attention to a region (reflected in the number of references to a region) relate to its investment decisions and performance in that region-it utilises a methodology-content analysis-that provides us with a straightforward way of quantifying qualitative strategic information Future research should help us understand the value of words as indicators of attitudes and intentions and ultimately, performance.</p