Exploring the Debate of Short-Termism: a Theoritical and Empirical Analysis
Strategic Administration Journal
Strat. Mgmt. T., 29: 273вЂ“292 (2008)
Published online 15 October 3 years ago in Wiley InterScience (www.interscience.wiley.com) DOI: 15. 1002/smj. 657 Received 2 September 2003; Final modification received several September 2007 EXPLORING THE CONTROVERSY ON SHORT-TERMISM:
A ASSUMPTIVE AND SCIENTIFIC ANALYSIS
DAVID MARGINSON1* and LAURIE MCAULAY2
1 Cardiff Business Institution, Cardiff College or university, Cardiff, U. K. two Business Institution, Loughborough University or college, Loughborough, U. K. The debate about short-termism features focused on the economic elements of capital markets and gratification measurement systems. Laverty (1996) has recommended the add-on of person and company dimensions to extend the argument. We reorient Laverty's prolonged debate by drawing upon a broad management and accounting literature and thereby develop testable assumptive explanations of short-termism. The resulting ideas are analyzed in a telecommunications company. Our findings give support pertaining to Laverty's (1996) argument that each and company factors are very important determinants of short-termism. Copyright п›™ 3 years ago John Wiley & Sons, Ltd.
Time can be significant as a reference point intended for the
tactical decision machine (Mosakowski and Earley,
2000). This fundamental point features significant outcomes,
among which is the intricate issue of
short-termism. Short-termism is asserted to be associated
with restricted investment in tangible and
intangible possessions; this employs the argument that
a preference to get short-term efficiency leads to
unintentional consequences to get the long lasting valueadding
capacity for the company (Hayes and Abernathy,
1980; Kaplan, 1984; Johnson and Kaplan,
1987; Porter, 1992). The beginnings of this desire
for the short term have been completely debated; quarrels
center on demands to meet targets expressed
by simply capital marketplaces (Bushee, 1998) and the discursive
detachment associated with performance measurement
systems (Hayes and Abernathy, 1980).
Keywords: short-termism; part ambiguity; social influence;
capital markets; overall performance measurement
*Correspondence to: David Marginson, Cardiff Business College, Cardiff University, Aberconway Building, Column Drive, Cardiff CF10 3EU, U. K. Email: [email protected] ac. uk
Inspite of considerable controversy, however , there is surprisingly
tiny research that answers the questions
raised by these types of arguments (Porter, 1992). Research
is particularly lacking at the intrafirm level and
вЂfew attempts have been made to link individual
temporal alignment and the person's preferences
during an organizational setting' (Laverty,
Each of our aim from this paper is definitely the study of shorttermism.
The approach is first to bring up Giddens'
(1984) insight that social techniques presume
reflexivity. This leads us should be expected that managers
are capable of revealing their factors behind acting
in accordance with short-termism. Requests
into these kinds of reasons may be conducted applying qualitative
exploration and study instruments. The second
strategy is to reorient the disputes that
encompass short-termism simply by drawing upon a broad
literature for which there are established empirical
bases pertaining to inquiry within just business contexts.
The ensuing theoretical expansion provides the
initial contribution with the paper which is shown
in the next section. We review arguments
linking each of four areas to short-termism, and
Copyright п›™ 2007 Ruben Wiley & Sons, Limited.
274 Deb. Marginson and L. McAulay
develop hypotheses that have the potential to
addresses the concerns raised. The other contribution
is always to report disovery empirical study
at the intrafirm level. We all present sections that
identify a research system that we executed
and we present the studies. The final section
presents a conclusion, implications, restrictions, and
tips for future exploration. Our conclusions
support Laverty's (1996) argument that a limited
focus on monetary causes, since represented by simply capital...
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Copyright п›™ 2007 John Wiley & Daughters, Ltd. Strat. Mgmt. M., 29: 273вЂ“292 (2008)
DOI: 10. 1002/smj