7.3c Assessing Short and Long Term Performance Flashcards Preview

Business Studies A2 > 7.3c Assessing Short and Long Term Performance > Flashcards

Flashcards in 7.3c Assessing Short and Long Term Performance Deck (7)
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1
Q

Short-termism definition

A

When businesses focus on the creation of short-term profits at the probable expense of the long-term interests.

2
Q

Why might a business take a short-term approach?

A

Pressure from shareholders

3
Q

How does short-termism affect the business positively?

A
  • Happy shareholders
  • Motivated workforce
  • Can adapt to changes in market
4
Q

How does short-termism affect the business negatively?

A
  • Shortened tenure of leaders
  • Businesses are less likely to invest
  • Less investment in human capital
5
Q

Long-termism definition

A

Making decisions with a view of meeting long-term objectives

6
Q

How does long-termism affect the business positively?

A
  • More open and flexible to change

- Can adapt to key factors in the external environment

7
Q

How does long-termism affect the business negatively?

A
  • Can’t neglect the needs of shareholders

- Looking too far into future may mean fine tuning of business is ignored

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