We theorize down-scoping as a strategic change shaped by three types of powerful actors: securities analysts as assessors of corporate strategies, corporate executives as decision makers of corporate strategies, and board directors and institutional investors as monitors of corporate strategies. We argue that earnings pressures from securities analysts can spur managers to reduce the scope of corporate business in order to bridge the earnings gap and improve stock market valuation. From a balanced-power perspective, we further argue that the impact of earnings pressures on firms' down-scoping decisions can be modified by the decision makers and monitors because the various power actors may compete to control the strategic direction of the firm. Using a sample of S&P 1,500 companies from 1998 to 2009, we found that CEO duality, outside director ownership, and mutual fund ownership with a long-term orientation reduce the effects of earnings pressures on down-scoping. In contrast, mutual fund ownership with a short-term orientation enhances the impact of earnings pressures on down-scoping. These findings have important implications for both organization theory and down-scoping research.