Where does the short term view come from within shareholders ?
Instant gratification or patience ?

Where does the short term view come from within shareholders ?


The assigned reading material from a Coursera specialization course suggests that some companies should be judged on short term (like social media companies) and other on long term results. We say short term since things change very quickly with social media related companies.

Some companies make small incremental changes and so get quick feedback from the market whether the change is successful or not. The small change can be either part of a longer term strategy or could be just an once off small change.

We know that following the Kaizen approach which encourages small incremental changes, can result in obtaining good long term success. The reason being that people tend to run away from big changes but are prepared to take small incremental steps toward a big goal.

Here is an article that mentions the power of small incremental steps. (https://www.theguardian.com/sustainable-business/keen-appalatch-element-small-business-sustainability)

Some companies still use a 12 month cycle to do the employee performance reviews. Yes, there is a lot of talk why that is not ideal. Could we use the same reasons for not judging companies on longer term success ?

The question begs .... should we change short term investors outlook to longer term results ? Why is it that investors tend to look at short term results ? Is my assumption correct that short term changes are mostly related to efficiency improvements ? Should companies look more to radical changes instead of progressive changes ?

Dare I ask, Should a company maybe think of "publishing" the longer term view of what they are trying to achieve ? Does that lead us to conclude that short term are here to stay ?

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