Assessing short and long term performance

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…