Strategy Disclosure in the Annual Reports of Brazilian Companies

In this study we describe how listed Brazilian companies disclose information about their strategy in annual reports. From the literature on operations strategy, we developed eight proxies and their respective keywords for strategy disclosure. Keyword frequencies were measured using an automatic procedure. We used cluster analysis to identify strategic groups and multinomial logistic regression to discriminate the groups using economic performance variables. From a sample of 450 annual reports, we obtained four groups of companies. Only two of them have clearly defined strategic positioning. We concluded that the quality of strategy disclosure offered by Brazilian companies is low.