Buy the rumor, shape the news: how firms use rumor reactions to anticipate and manage impressions

I develop and test theory about the tactics and antecedents of organizational anticipatory impression management. For some types of events, organizations can anticipate negative audience perceptions and proactively plan to manage those perceptions. Prior anticipatory impression management research has examined tactics that affect the informational environment of an event, rather than the focal behavior, and assumed that organizations anticipate controversies without explaining the mechanism. I argue that organizations will also change characteristics of the focal behavior of an event in anticipation of negative audience perceptions. Further, I argue that organizations exhibit feedback-seeking behavior, such that they both monitor their environment and seek preliminary event-specific information, in order to anticipate potentially negative audience perceptions. I find that organizations are more likely to announce an acquisition as market reactions to rumors of that acquisition are more positive. I also find limited support for price changes from rumor to acquisition and moderators of those relationships.