Attributions in the Board Room: Causal Reasoning in Corporate Annual Reports

Abstract

The authors gratefully acknowledge the invaluable assistance of Harish Sujan and Mita Sujan in conducting the research. This study was supported in part by a grant from the Marketing Study Center at UCLA. The patterns of causal reasoning used to explain corporate performance outcomes were analyzed using data from Letters to Shareholders in 181 annual reports published in 1972 and 1974. These data were used to analyze the nature of self-serving attributions, and other attributional phenomena, and the factors affecting the amount of causal reasoning. The typical self-serving pattern of attributions found in studies of individual performance was also found in this study of corporate performance. Neither a purely informational nor a purely motivational explanation was supported by these attributions. Unfavorable outcomes were attributed more to external, unstable, and uncontrollable causes than were favorable outcomes. Attributions were most prevalent when a corporation did worse than expected and chose to talk mostly about unfavorable outcomes. These findings contribute new insights to several theoretical issues and support the use of annual report data in analyzing organizational phenomena.