Talking about Strategy: Leaders' Use of Adaptation Frames

Abstract

Strategic leaders package information in ways to elicit external audiences’ positive assessment of the firm. Focusing on the simplification and condensation function in the framing perspective, we offer a new model to explain why and how leaders construct coherent adaptation frames for corporate growth and corporate restructuring that resonate with investors. Using 36,077 quarterly conference call transcripts across 2,034 firms, we demonstrate that strategic leaders selectively emphasize and de-emphasize different categories of information to invoke either an exploration or exploitation frame. More importantly, the invoking of these frames is consequential on investor reactions. Our findings contribute to the impression management and framing literature by offering a new framing model that articulates why and how coherence in framing in strategy discourse matters to trigger investor reactions.