01-10-2016, 11:55 PM
(01-10-2016, 11:24 PM)JustWinBaby Wrote: And you're falling for the left-wing meme that companies only care about the short-term. That usually hammered home by people who've never spent time in a Board meeting and have no real concept of how and why decisions are made.
Not true at all. For example......
https://hbr.org/2014/01/focusing-capital-on-the-long-term
a McKinsey Quarterly survey of more than 1,000 board members and C-suite executives around the world to assess their progress in taking a longer-term approach to running their companies. The results are stark:
- 63% of respondents said the pressure to generate strong short-term results had increased over the previous five years.
- 79% felt especially pressured to demonstrate strong financial performance over a period of just two years or less.
- 44% said they use a time horizon of less than three years in setting strategy.
- 73% said they should use a time horizon of more than three years.
- 86% declared that using a longer time horizon to make business decisions would positively affect corporate performance in a number of ways, including strengthening financial returns and increasing innovation.
http://hbswk.hbs.edu/item/the-high-risks-of-short-term-management
leading up the financial crisis, companies like New Century Financial or Countrywide Financial built their success by incentivizing their employees on volume--to sell as many mortgages as possible with little regard for quality—and the stock market rewarded them handsomely for their spectacular growth. In that case, short-termism manifested itself through the myopic underweighting of the long-term adverse consequences associated with the high credit risk of many mortgage holders and the possibility of a halt to rising home prices.
