Stakeholders' perceptions of organizational decline

Prior research has raised questions about the ability of key organizational stakeholders, especially accountants, to correctly assess an organization's likelihood to grow or decline. It appears that these stakeholders often view the decision from a highly narrow and predominantly financial perspective. Meanwhile the root causes of decline, which often feature as non‐financial and non‐quantifiable information, are overlooked. The present study was conceived and conducted with a view to testing the generalizability of these previous findings. Using a quasi‐experimental design that incorporated the methodological improvements suggested in these earlier studies, the perceptions of accountants, stock analysts, and directors of company boards toward organizational decline were examined. The data provide mixed support for the conclusions reached in previous studies. In particular, the information stakeholders rely upon is not as clear‐cut as past research would suggest.