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IACM 2023

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How Leaders Build Relationships In High-Stakes Conversations

Organizational leaders have to engage in difficult conversations with their stakeholders in highly scrutinized corporate contexts, whereby question askers (e.g., analysts) try to extract private information from question answerers (e.g., executives). Scholars in this stream of research typically assume that analysts’ evaluation of the executives is predominantly shaped by the level of accuracy of information provided in those conversations (e.g., Barth et al., 2022; Bushee et al., 2017). We argue that in addition to pursuing informational goals, executives can leverage their relational goals by signaling benevolence when answering difficult questions (Levine et al., 2020; Yeomans et al., 2022). We test this theory in a dataset of 174,149 pairs of question and answer turns between executives and analysts during the Q&A section in quarterly earnings calls of major companies from 2010-2015. Verbal strategies signaling benevolence (e.g., “that’s a great question”) and especially gratitude (e.g., “I appreciate the question”) reduce the likelihood of difficult follow-up questions. However, strategies signaling honesty, such as admitting unknowns (e.g., “I don’t know”), or unwillingness to answer (e.g., “I would rather not comment”), are associated with higher rates of difficult follow-ups. These effects are strongest when the content of the earnings disclosure, and the asker’s initial question, are negative.

Evita Huai-ching Liu
Bocconi University

Michael Yeomans
Imperial College Business School
United Kingdom


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