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That said, a focus on maximising share value per se is, in the world of real human beings, likely to lead to short-term thinking that produces inferior long-term results.
I know this is popular thinking, but I, and I think many others in business, disagree with it.  There is a book written by a couple of Stanford professors 10 years or so ago, called, I think, "Good to Great".  They had a great line, which was a question and answer: "Should we manage for the short term or the long term?"  the answer is "yes".  To think that you can't do both, is like saying you can't walk and chew gum at the same time.  Of course there are tradeoffs, and at times it's easy to forego the long term for a short term quarter, or year.  But if you're a CEO that wants to be around for 10--20 years, obviously you have to do both.  And there are many companies that accomplish this.

I believe the thinking that I espoused above is now very standard in business, at least US business.  But like so many other things the press writes about, it's the scandals at Enron, etc. etc. that make the headlines--not the consistent progress at Medtronic, GE, etc, etc.

by wchurchill on Fri Dec 22nd, 2006 at 09:31:17 PM EST
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