This paper discusses the role of security analysts in the dissemination of popular management concepts, drawing on neo-institutional and management fashion theory. Focusing on the core competence concept, we investigate whether security analysts swing with the popularity of a management concept or serve as a corrective that secures the rationality of managerial actions. Through our analysis, which uses data for US-based firms spanning the period 1990-2002, we show that during the 1990s analysts systematically overvalued the future earnings of refocusing firms that incorporated principles derived from the core competence concept. Moreover, we present evidence that their valuations were positively influenced by the popularity of the core competence discourse and exhibited a systematic bias. Our results suggest a more nuanced understanding of the dynamics underlying the popularization processes of management concepts. In addition to the classical bandwagoneffects discussed in neo-institutional theory, we argue that the mediating role of security analysts and their impact on stock-market prices promote the diffusion of new management concepts.

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Research Summary: We propose that due to financial market pressures, managers are forward-looking in their search and decision processes and focus on meeting performance targets set by the financial community. Using panel data on S&P 100 companies, we find that pressure felt by management to meet the analyst consensus earnings estimate influences the extent of corporate downsizing. Moreover, our results show that high levels of institutional investor stock ownership and CEO power attenuate managers' sensitivity to financial market pressures, while high levels of analyst coverage increase their sensitivity. Managerial Summary: In this study we examine how financial market pressures influence managers' downsizing decisions. We argue that investment analysts' earnings estimates represent important performance targets to which managers aspire. If firms fail to meet analysts' expectations, the stock price will suffer. This study shows that managers utilize corporate downsizing to address the potential shortfall between a firm's future performance and the analyst consensus earnings estimate.In addition, we find that managers' concerns over meeting analysts' earnings estimates are influenced by various contextual factors such as institutional investor stock ownership, CEO power, and high levels of analyst coverage. K E Y W O R D Sbehavioral theory of the firm, corporate downsizing, earnings estimates, investment analysts, performance feedback

A substantial body of literature discusses the so-called rigor-relevance gap in management science and possible ways of overcoming it. A frequently advocated approach, in line with Gibbons, Limoges, Nowotny, Schwartz, and Trow's "Mode 2" idea of creating "hybrid fora," is the introduction of joint academic-practitioner review processes in management journals. In an empirical case study of one of the oldest management journals in the world, the authors show that the demands of academic and practitioner reviewers are hardly compatible, and, to some extent, inversely correlated. In contrast to other studies, here the authors show that the reason for the tension between academics and practitioners with regard to this issue does not lie in differences in the evaluation criteria of each group. Rather, the different worldviews of academics and practitioners lead to different interpretations of these criteria and a striking incongruence between the two groups' ideas of practical relevance.

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