A conceptual framework of impression management: new insights from psychology, sociology and critical perspectives

Abstract

In this paper we develop a conceptual framework, based on the concepts of rationality and motivation, which uses theories and empirical research from psychology/behavioural finance, sociology and critical accounting to systematise, advance and challenge research on impression management. The paper focuses on research that departs from economic concepts of impression management as opportunistic managerial discretionary disclosure behaviour resulting in reporting bias or ‘cheap talk’. Using alternative rationality assumptions, such as bounded rationality, irrationality, substantive rationality and the notion of rationality as a social construct, we conceptualise impression management in alternative ways as (1) self-serving bias, (2) symbolic management and (3) accounting rhetoric. This contributes to an enhanced understanding of impression management in a corporate reporting context.

Keywords:

• discretionary narrative disclosures
• impression management
• rationality

Acknowledgements

We are grateful to two anonymous reviewers for constructive comments on the paper.

Notes

The dichotomy between cognitive and emotional factors can be traced back to the Cartesian model of the mind. Descartes regarded rationality and emotions to be distinct spheres (Lakoff and Johnson 1999). However, emotions, which are associated with the realm of the body, can influence the mind.

The predominant economics-based perspective on impression management is based on a closed-system concept of the organisation as ‘separate from its environment and encompassing a set of stable and easily identifiable participants’ (Scott and Davis 2007, p. 31). By contrast, the alternative perspectives (particularly the sociological and critical perspectives) introduced in this paper are based on an open-system concept of the organisation as being shaped, supported and infiltrated by its environment (Scott and Davis 2007).

Another strand of research does not deny the existence of impression management, but regards reporting bias as ‘cheap talk’ (Benabou and Laroque 1992) that is ignored by investors (see Figure 2).

The reporting bias may either be the result of impression management or managerial hubris.