The Effect of Presentation Form on the Use of Information in Annual Reports
Information for management decisions is typically presented in both numeric and nonnumeric forms. This paper tests whether the choice of presentation form affects the use of such information by decision makers. Selected information from corporate annual reports was provided to a group of practicing financial analysts in a quasi-experimental setting. The analysts were asked to evaluate two companies (one R&D company and one manufacturing company) using selected financial data and excerpts from the president's letter. Some versions of the letter contained numeric information while other versions contained nonnumeric information. The study tested several hypotheses which specified the conditions under which information in one presentation form would receive higher weight in a decision than the other form. Relative weights placed on different information forms were determined by an averaging model from information integration theory. The appendix contains a presentation of that model. The study's results suggest that when the link between organizational actions and future performance is not well established and understood, financial analysts may give more weight to nonnumeric information in evaluating a company. This study has important implications because it shows that in certain situations managers can influence financial analysts' use of information by varying presentation form.
Volume (Year): 30 (1984)
Issue (Month): 2 (February)
|Contact details of provider:|| Postal: 7240 Parkway Drive, Suite 300, Hanover, MD 21076 USA|
Web page: http://www.informs.org/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:30:y:1984:i:2:p:169-185. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.