| I add to the literature in organizational theory by introducing an interdisciplinary conceptual framework about the relationship between firms and the financial media. I conduct two studies that focus on the quarterly earnings report, an important indicator for firms and a key source of news for the financial media. My quantitative study tests hypotheses that aim to clarify how firms give sense about their earnings and how the financial media make sense of these earnings. The study gives rise to three main findings. The volume of sensemaking (news stories) by the financial news media is triggered by sensegiving from the firms' press releases, but surprisingly, remains steady for positive and negative earnings deviations from analyst expectations. Firms issue more press releases when they have more analysts following them, but the financial media do not write additional stories. Finally, by testing the interrelated impact of the New York Times and the Wall Street Journal, I find that news coverage from one news organization can trigger coverage by another. I use qualitative methods to conduct a case study of one news organization to explain how financial reporters craft stories about firms' quarterly earnings reports. I detail the intricacies of the reporter-source interface in financial news and explain how reporters view the "quote-o-matics" in their industry. I also explicate how reporters work to create unique stories about the potentially mundane quarterly earnings reports. Finally, I illuminate the individual and organizational infrastructure in place to ensure accuracy in stories, and I conceptualize financial news organizations as high-reliability organizations. In combining the results of my studies, I introduce a label for the relationship between firms and the financial media: the mindful pipeline. The mindful pipeline acknowledges that information flows from firms to the financial media. The concept goes further to account for how reporters rely on financial analysts to understand changes in the firms' stock prices, how they monitor the financial news competition on an ongoing basis, and how they work to craft distinctive stories. I conclude by highlighting the relevance of this research to managers and by detailing a plan for future research. |
