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RESEARCH PRODUCT

Short-Termism: A Step Forward Toward Long-Term Performance or a Dead End

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description

The debate around short-termism and its effects on the economic life, rather negative than positive, is far from ending, having academics, practitioners, and pundits arguing on this topic. The purpose of this paper is to determine if short-termism is part of the process of creating long-term performance (value) in an organization or it is harmful for harnessing performance, by presenting the definitions of the concept, who are the main promoters of short-termism, opinions of both academics and practitioners, and studies and examples that sustain on the one side the fact that short-termism encourages the manipulation of numbers in order to meet quarterly earnings, by cutting investments from R&D and innovations, and on the other side the fact that short-term approach is the cornerstone of the future and, without short-term performance, there is no long-term future for an organization.