Financial analyst sensemaking following strategic announcements: Implications for the investor relations activities of firms

This dissertation focuses on situations where firms communicate with sell-side financial analysts about strategic issues. Analysts are important because their actions (i.e., changing earnings estimates and making recommendations) can impact on a firm's future performance. These actions change market valuations, impact a firm's reputation within the business community, and influence the decision-making processes of both the firm's board and its management.;Consistent with a cognitive sensegiving-sensemaking perspective, this study views firms as sensegivers attempting to influence the meaning construction of sensemakers such as analysts when they provide them with information. The purpose of this research is to create theory that helps us to better understand how analysts interpret information in strategic issue announcements and to use that theory in drawing implications for the investor relations activities of firms.;This dissertation, focusing on the specific case of acquisitions, incorporates both literature review and field interviews in developing theory. It develops a typology of analyst schemas to represent some of the information structures potentially used by analysts in assessing acquisition announcements. From this dissertation's perspective, attempts by firms to influence sensemaking through sensegiving activities are attempts to influence the content of analyst schemas and/or which schemas are used by analysts. In essence, firms are targeting different analyst schemas when communicating different types of information. The final chapter of this dissertation discusses how firms can change the sensegiving effect of their communications by varying message content, framing the information differently and/or altering the delivery method based on the schema type(s) they are targeting.;This study was done using the very specific context of acquisition announcements and focused solely on analyst responses to those announcements. At the conclusion of this dissertation, I believe that this dissertation has implications that extend beyond the specific context of acquisition announcements and analyst reactions. Many schemas identified in the schema typology are likely to be relevant in other announcement situations as well. In addition, the cognitive perspective used here and the discussion of implications for how firms communicate with analysts are likely to be relevant as firms communicate with other stakeholder groups in their investor relations activities.