In Search of Meaning: Does the zy Fortune Reputation Survey Alter Performance Expectations? W. Glenn Rowe Ira C. Harris zyxwvu University of Western Ontario University of Notre Dame Albert A. Cannella, Jr. Tony Francolini Texas A&M University University of Western Ontario zyxwvu Abstract Our study theoretically and empirically examines per- formance antecedents and consequences of the zyxwvuts Fortune annual Survey of Corporate Reputation. Accounting- and market-based measures of performance are used to predict the ratings, and investor reactions to the publi- cation of the ratings are predicted to be associated with the extent to which the ratings diverge zyxwvut from antecedent predictions. Lower-than-predicted ratings should gener- ate a negative response while higher-than-predicted rat- ings should generate a positive response. Contrary to expectations, we found a negative relationship. In addi- tion, this negative relationship was only for the lower- than-predicted ratings. For higher-than-predicted rat- ings the relationship with investor reaction was insignificant. Rbsumb Notre dude consiste en un examen the'orique et empirique des facteurs influencant le classement annuel du magazine Fortune et des cons&quencesde ce classe- ment sur la performance des firmes fvalukes. Nous utilisons des mesures comptables et financitres pour examiner le lien entre la pegormance et la re'putation de la prme. zyxwv La facon dont les investisseurs re'agissent a ces e'valuations doit en principe Ztre proportionnelle au degre' de divergence par rapport aux predictions ante'rieures. ThPoriquement, les e'valuations qui sont moins fleve'es que pre'vues entrainent une re'action ne'ga- live des investisseurs, tandis que les &valuationsqui sont plus deve'es que pre'vues entrainent une re'ponse positive des investisseurs. Mais dans la re'alitt?, on observe plut6t une relation inverse, en l'occurrence dans le cas des e'valuations qui sont moins fleve'es que pre'vues. Les e'valuations qui sont plus e'levkes que pre'vues n'ont qu'un impact limit6 sur la re'action des investisseurs. Does Fortune's annual corporate reputation survey influence investor behaviour? Certainly, Fortune's annu- al survey coronets "America's Most Admired Compa- nies" and has attained a prominent status among readers of Fortune magazine. It has also attracted the attention of strategic management scholars (Ballen, 1992; Brown zyxwvut & Perry, 1994; Davidson, 1990; Dollinger, Golden, & Sax- ton, 1997; Fombrun & Shanley, 1990; Fryxell & Wang, 1994; Hammond & Slocum, 1996; McGuire, Schnee- weis, & Branch, 1990). The level of research focus on the survey suggests that the results are not only popular, but are also important. zyxwvutsrq Address correspondence to W. Glenn Rowe, Richard Ivey School of Business, University of Western Ontario, London, ON, Canada N6A 3K7. E-mail: growe@ivey.uwo.ca 0 ASAC 2003 187 The research can be divided into two groups. Some research interest focuses on the content of the survey (i.e., what is actually measured). These researchers have evaluated the accuracy and design of the reputation scales. For example, Fryxell and Wang (1994) suggest the survey is one-dimensional (referring to the high intercorreIation of the items in the survey). On the other hand, the importance of the survey may be independent of the question of survey content. Other research has focused on determining whether the reputa- tion survey is beneficial due to its accessibility. Does the survey provide new information? Or, conversely, is the survey simply redundant because it provides previously available information? This prompted us to question whether the business market values the information dis- seminated in the published survey. From a strategic man- agement perspective, this question is important because Canadian Journal of Administrative Sciences Revue canadienne des sciences de I'administration - 20(3), 187-195