Assessing short and long term performance
- Created by: Nathan From Bristol
- Created on: 23-05-17 18:31
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Cause and effects of short-termism
Short-termism is when the actions of managers show an obsession with immediate issues rather than long term ones. Here are some symptoms of short-termism.
- inadequate expenditure on research and development
- accounting adjustments that inflate current earnings
- a bias towards high dividends and share buybacks at the expense of investment
- adoption of executive pay schemes that reward short-term financial goals *cough - RBS - *cough
- overly zelous cuts to employment
- a disregard for longer-term risks in the companys products, services or strategy
- an excessive focus on acquisitions rather than organic growth
the main cause of short-termism said to be the relationship with financial markets. For plc's…
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