Can firms deceive their stakeholders, by failing to deliver on their commitments to undertake sustainability practices without being detected? Extant theory posits that, due to information asymmetry, stakeholders struggle to comprehend the actual change in firms’ practices. In contrast, we advance a cognitive-linguistic perspective to explain why stakeholders are sometimes misled. Accordingly, we propose that firms’ deception does not appear in the content of their communication, but in its linguistic properties, which derive from how managers cognitively construe the sustainability challenge. Thus, firms cover the same points of content in their reports, but firms that practice what they preach use more complex styles of language than do firms that decouple their action from their statements. Moreover, we theorize that generalist stakeholders and stakeholders with conflicts of interest are unable to detect these linguistic nuances, whereas specialist stakeholders can. We find evidence for this cognitive-linguistic perspective in a textual analysis of grammatical structure in 261 interviews conducted in a large field study of 12 multinational corporations and their stakeholders. This lens advances our understanding of how firms deceive and how stakeholders can detect such deception and opens a new and promising avenue for research on firm–stakeholder relations.
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