Measuring What Matters: Assessing how Executives Reference Firm Performance in Corporate Filings

IF 8.9 2区 管理学 Q1 MANAGEMENT
S. Certo, Chunhu Jeon, Kristen A. Raney, Wookyung Lee
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引用次数: 3

Abstract

We know very little about the performance measures executives use to make decisions. To fill this void, we investigate the performance variables that executives reference in corporate filings with the SEC. Our analyses suggest that executives refer to monetary variables (i.e., revenue, profit, and cash flow) in over 98% of filings. In contrast, executives refer to the unitless performance measures scaled by size (i.e., return on assets, return on equity), which are favored by organizational scholars, in less than 15% of filings. We find that this preference for unscaled measures remains across market capitalization and actual firm performance. In other words, even observations with the highest levels of ROA and ROE are more likely to include monetary measures as opposed to ratios. In fact, we find that almost every observation that references ratios also includes monetary measures of firm performance. Stated differently, our findings suggest executives use ratios in addition to—and not instead of—monetary measures. We discuss research opportunities for scholars to further align with the practitioner perspective and to revisit conceptualizations of firm performance.
衡量重要因素:评估高管在公司文件中如何参考公司业绩
我们对高管们用于决策的绩效指标知之甚少。为了填补这一空白,我们调查了高管在向美国证券交易委员会提交的公司文件中提到的绩效变量。我们的分析表明,高管在98%以上的文件中提到了货币变量(即收入、利润和现金流)。相比之下,高管们在不到15%的文件中提到了按规模衡量的无单位绩效指标(即资产回报率、股本回报率),这受到了组织学者的青睐。我们发现,这种对未分级指标的偏好在整个市值和实际公司业绩中仍然存在。换言之,即使ROA和ROE水平最高的观察结果也更有可能包括货币措施,而不是比率。事实上,我们发现几乎每一个引用比率的观察结果都包括对公司业绩的货币衡量。换句话说,我们的研究结果表明,高管们除了使用货币指标之外,还使用比率,而不是代替货币指标。我们讨论了学者进一步与从业者观点保持一致并重新审视企业绩效概念的研究机会。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
CiteScore
23.20
自引率
3.20%
发文量
17
期刊介绍: Organizational Research Methods (ORM) was founded with the aim of introducing pertinent methodological advancements to researchers in organizational sciences. The objective of ORM is to promote the application of current and emerging methodologies to advance both theory and research practices. Articles are expected to be comprehensible to readers with a background consistent with the methodological and statistical training provided in contemporary organizational sciences doctoral programs. The text should be presented in a manner that facilitates accessibility. For instance, highly technical content should be placed in appendices, and authors are encouraged to include example data and computer code when relevant. Additionally, authors should explicitly outline how their contribution has the potential to advance organizational theory and research practice.
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