Few companies these days are willing to slug it out long term. This can be evidenced though this study conducted by management consulting market leader McKinsey. In this study, more than half the professionals surveyed, have confirmed that they would be willing to forego long-term value in order to meet quarterly targets. An even higher percentage states that this pressure has increased over the past five years. An even higher figure maintains, that pressure to financially succeed is highest at the two-year point. Companies that have a corporate strategy geared towards long-term growth have outperformed that short-termist peers by thirty-eight percent in earnings, forty-seven in revenues and fifty-six percent in market capitalization. The Economist publication however, does not agree claiming that investment in research and development is actually proportionately quite high. To prioritize long-term strategies, companies need to pursue alliances with sophisticated investors. Investors need be educated towards changing priorities and quarterly calls need be revisited. Artificial moves to meet earning targets need be avoided, especially discretionary spending.

Source:https://www.mckinsey.com/global-themes/long-term-capitalism/five-fifty-going-long

Uploaded Date:13 December 2017