Managerial myopia or systemic short‐termism?

Kevin J. Laverty (University of Washington, Bothell, Washington, USA)

Management Decision

ISSN: 0025-1747

Publication date: 1 September 2004

Abstract

For more than two decades both the business press and research in several academic disciplines have seen an extended debate over what has been called “myopia” or “short‐termism”. These terms have been used to describe decisions in which firms pursue short‐term gains ( for example, seeking to maximize quarterly profits) at the expense of long term strategies ( for example, investing in basic research or laying the groundwork for new core competencies). Despite the attention to this subject, there remain conflicting positions in the business press and inconclusive evidence from research regarding causes and proposed solutions. This paper proposes that progress may be possible by looking inside firms – addressing how managerial systems and decision‐making processes affect the development of long term strategies. Survey results suggest that systemic elements – organizational culture, processes, and routines – have promised in understanding why firms may undervalue the long term and pay too much attention to the short‐term. This study finds that firms are less likely to undervalue the long term when they are able to manage tradeoffs between short‐term and long term results, and create a climate of trust that allows individuals to weather the short‐term setbacks necessary to achieve long term results.

Keywords

Citation

Kevin J. Laverty (2004) "Managerial myopia or systemic short‐termism?", Management Decision, Vol. 42 No. 8, pp. 949-962

Download as .RIS

DOI

: https://doi.org/10.1108/00251740410555443

Publisher

:

Emerald Group Publishing Limited

Copyright © 2004, Emerald Group Publishing Limited

Please note you might not have access to this content

You may be able to access this content by login via Shibboleth, Open Athens or with your Emerald account.
If you would like to contact us about accessing this content, click the button and fill out the form.
To rent this content from Deepdyve, please click the button.