How Short-Term Orientation Dominates Western Businesses and the Challenges They Face—An Example Using Germany, the UK, and the USA

Abstract

The current study investigates and establishes the factors that lead to short-term orientation strategies in western organisations. Moreover, this study used questionnaire-based surveys to assess the relationship between these factors and what it would take for the organisation to move to a long-term orientation strategy. At the start of the study, it was evident that the annual bonus system is a key reason for prioritising a short-term orientation strategy. The sample was composed of 300 companies of different sizes from different western countries. Furthermore, the general consensus within these companies was that most managers knew that long-term orientation was necessary; however, either their superiors/shareholders/supervisory board only reward short-term results, or the managers and stakeholders prefer short-term goals for evaluations because it is challenging to transform a long-term strategy into multiple short-term strategies and goals. At the end of the study, a basic framework has been suggested to be used as guidelines for any company moving from short-term to long-term orientation strategies.

Keywords

• short-term orientation
• business development
• bonus system
• change
• long-term orientation
• strategy