Voluntary disclosure of corporate strategy: determinants and outcomes. An empirical study into the risks and payoffs of communicating corporate strategy.

Business leaders increasingly face pressure from stakeholders to be transparent. There appears however little consensus on the risks and payoffs of disclosing vital information such as corporate strategy. To fill this gap, this study analyzes firm-specific determinants and organisational outcomes of voluntary disclosure of corporate strategy. Stakeholder theory and agency theory help to understand whether companies serve their interest to engage with stakeholders and overcome information asymmetries. I connect these theories and propose a comprehensive approach to measure voluntary disclosure of corporate strategy. Hypotheses from the theoretical framework are empirically tested through panel regression of data on identified determinants and outcomes and of disclosed strategy through annual reports, corporate social responsibility reports, corporate websites and corporate press releases by the 70 largest publicly listed companies in the Netherlands from 2003 through 2008. I found that industry, profitability, dual-listing status, national ranking status and listing age have significant effects on voluntary disclosure of corporate strategy. No significant effects are found for size, leverage and ownership concentration. On outcomes, I found that liquidity of stock and corporate reputation are significantly influenced by voluntary disclosure of corporate strategy. No significant effect is found for volatility of stock. My contributions to theory, methodology and empirics offers a stepping-stone for further research into understanding how companies can use transparency to manage stakeholder relations

Can Managers Appraise Performance Too Often?

This paper discusses the relationship between the frequency of performance appraisal and escalation of commitment to a losing course of action. It is commonly thought that the more often employees are appraised, the more effective they become. Contrary to this view, we discuss conditions that cause employees, particularly project managers responsible for capital budgeting decisions, to stick with decisions that have been shown to result in negative consequences for the company. We report the results of a set of work place simulations where the frequency of performance appraisal affected the length of commitment to losing courses of action as well as the managers perceptions about their personal benefits resulting from those decisions. The results suggest that frequent performance appraisals during the course of long-term projects may divert managers from the profit maximization goal sought by the owners of the firm