Taejeah

Short-termism refers to when there is a bias towards short-term rather than long-term performance.

The main reason for this is that managers' performance is often based on short-term results.

Examples of the sacrifices of long-tern objectives includes:
Postponing or abandoning capital expenditure projects
Decreasing on research and development costs
Reducing quality control (which can be very critical in the long term)
Reducing the level of customer service
Cutting training costs or recruitment


Methods to encourage a long term-view are:
Make short-term targets realistic
Providing sufficient management information
Evaluating managers performance
Link managers award to share price
Set quality based targets

PS: Answers and analysis should be based on the organisation and the scenario in the exam question.

It was said that we students are generalising too much and we need to get away from that so that we can be successful both in the exams and on the job.