Making the Numbers? “Short Termism” and the Puzzle of Only Occasional Disaster

References

• Aspara J, Pajunen K, Tikkanen H, Tainio R (2014) Explaining corporate short-termism: Self-reinforcing processes and biases among investors, the media and corporate managers. Socio-Econom. Rev. 12(4):667–693.Crossref, Google Scholar
• Azoulay P, Repenning NP, Zuckerman EW (2010) Nasty, brutish, and short: Embeddedness failure in the pharmaceutical industry. Admin. Sci. Quart. 55(3):472–507.Crossref, Google Scholar
• Baker G, Gibbons R, Murphy KJ (2002) Relational contracts and the theory of the firm. Quart. J. Econom. 117(1):39–84.Crossref, Google Scholar
• Bartov E (1993) The timing of asset sales and earnings manipulation. Accounting Rev. 68(4):840–855.Crossref, Google Scholar
• Bartov E, Givoly D, Hayn C (2002) The rewards to meeting or beating earnings expectations. J. Accounting Econom. 33(2):173–204.Crossref, Google Scholar
• Benner MJ (2007) The incumbent discount: Stock market categories and response to radical technological change. Acad. Management Rev. 32(3):703–720.Crossref, Google Scholar
• Benner MJ (2010) Securities analysts and incumbent response to radical technological change: Evidence from digital photography and Internet telephony. Organ. Sci. 21(1):42–62.Link, Google Scholar
• Bhojraj S, Hribar P, Picconi M, Mcinnis J (2009) Making sense of cents: An examination of firms that marginally miss or beat analyst forecasts. J. Finance 64(5):2361–2388.Crossref, Google Scholar
• Bowen RM, DuCharme L, Shores D (1995) Stakeholders’ implicit claims and accounting method choice. J. Accounting Econom. 20(3):255–295.Crossref, Google Scholar
• Brav A, Graham JR, Harvey CR, Michaely R (2005) Payout policy in the 21st century. J. Finance Econom. 77(3):483–527.Crossref, Google Scholar
• Brehmer B (1992a) Dynamic decision-making—Human control of complex-systems. Acta Psych. 81(3):211–241.Crossref, Google Scholar
• Brehmer B (1992b) Dynamic decision making: Human control of complex systems. Acta Psych. 8(1):83–90.Google Scholar
• Bull C (1987) The existence of self-enforcing implicit contracts. Quart. J. Econom. 102(1):147–159.Crossref, Google Scholar
• Burgstahler D, Dichev I (1997) Earnings management to avoid earnings decreases and losses. J. Accounting Econom. 24(1):99–126.Crossref, Google Scholar
• Christensen C (1997) The Innovator’s Dilemma (Harvard Business School Press, Boston).Google Scholar
• Columbia Accident Investigation Board (2003) Columbia Accident Investigation Report (Apogee Books, Burlington, Ontario).Google Scholar
• CSB (2007) Refinery explosion and fire. Report 2005-04-I-TX, U.S. Chemical Safety and Hazard Investigation Board, Washington, DC.Google Scholar
• Dallas L (2012) Short-termism, the financial crisis, and corporate governance. J. Corporation Law 37(2):265–364.Google Scholar
• Denrell J, Fang C (2010) Predicting the next big thing: Success as a signal of poor judgment. Management Sci. 56(10):1653–1667.Link, Google Scholar
• Dierickx I, Cool K (1989) Asset stock accumulation and sustainability of competitive advantage. Management Sci. 35(12):1504–1511.Link, Google Scholar
• Drucker PF (2016) Managing for the Future (Routledge, Abingdon, UK).Google Scholar
• Dustmann C, Fitzenberger B, Schonberg U, Spitz-Oener A (2014) From sick man of Europe to economic superstar: Germany’s resurgent economy. J. Econom. Perspect. 28(1):167–188.Crossref, Google Scholar
• Easton GS, Jarrell SL (1998) The effects of total quality management on corporate performance: An empirical investigation. J. Bus. 71(2):253–307.Crossref, Google Scholar
• Einhorn HJ, Hogarth RM (1985) Ambiguity and uncertainty in probabilistic inference. Psych. Rev. 92(4):433–461.Crossref, Google Scholar
• Einhorn HJ, Hogarth RM (1986) Judging probable cause. Psych. Bull. 99(1):3–19.Crossref, Google Scholar
• Farrell KA, Whidbee DA (2003) Impact of firm performance expectations on CEO turnover and replacement decisions. J. Accounting Econom. 36(1–3):165–196.Crossref, Google Scholar
• Gibbons R, Henderson R (2010) What do managers do? Exploring persistent performance differences among seemingly similar enterprises. Gibbons R, Roberts J, eds. The Handbook of Organizational Economics (Princeton University Press, Princeton, NJ), 680–731.Google Scholar
• Graham JR, Harvey CR, Rajgopal S (2005) The economic implications of corporate financial reporting. J. Accounting Econom. 40(1–3):3–73.Crossref, Google Scholar
• Gunny KA (2010) The relation between earnings management using real activities manipulation and future performance: Evidence from meeting earnings benchmarks. Contemporary Accounting Res. 27(3):855–888.Crossref, Google Scholar
• Haldane AG (2010) Patience and finance. Presented at the Oxford China Business Forum, Beijing, Septembe 2, http://www.bankofengland.co.uk/archive/Documents/historicpubs/speeches/2010/speech445.pdf.Google Scholar
• Hall RI (1976) A system pathololgy of an organization: The rise and fall of the old Saturday Evening Post. Admin. Sci. Quart. 21(2):185–211.Crossref, Google Scholar
• Healy PM, Wahlen JM (1999) A review of the earnings management literature and its implications for standard setting. Accounting Horizons 13(4):365–383.Crossref, Google Scholar
• Helfat CE (2007) Dynamic Capabilities: Understanding Strategic Change in Organizations (Blackwell Publishers, Malden, MA).Google Scholar
• Helper S, Henderson R (2014) Management practices, relational contracts, and the decline of general motors. J. Econom. Perspect. 28(1):49–72.Crossref, Google Scholar
• Holmstrom B, Milgrom P (1991) Multitask principal–agent analyses—Incentive contracts, asset ownership, and job design. J. Law, Econom., Organ. 7(Special Issue):24–52.Crossref, Google Scholar
• Ingrassia P (2010) Crash Course: The American Automobile Industry’s Road to Bankruptcy and Bailout—And Beyond (Random House, New York).Google Scholar
• Laverty KJ (1996) Economic ”short-termism”: The debate, the unresolved issues, and the implications for management practice and research. Acad. Management Rev. 21(3):825–860.Google Scholar
• Peek J, Rosengren ES (2005) Unnatural selection: Perverse incentives and the misallocation of credit in Japan. Amer. Econom. Rev. 95(4):1144–1166.Crossref, Google Scholar
• Pfeffer J, Sutton RI (2000) The Knowing-Doing Gap: How Smart Companies Turn Knowledge into Action (Harvard Business School Press, Boston).Google Scholar
• Rahmandad H (2012) Impact of growth opportunities and competition on firm-level capability development trade-offs. Organ. Sci. 23(1):138–154.Link, Google Scholar
• Rahmandad H, Repenning N (2016) Capability erosion dynamics. Strategic Management J. 37(4):649–672.Crossref, Google Scholar
• Repenning NP (2001) Understanding fire fighting in new product development. J. Product Innovation Management 18(5):285–300.Crossref, Google Scholar
• Repenning NP, Sterman JD (2001) Nobody ever gets credit for fixing problems that never happened: Creating and sustaining process improvement. Calif. Management Rev. 43(4):64–88.Crossref, Google Scholar
• Repenning NP, Sterman JD (2002) Capability traps and self-confirming attribution errors in the dynamics of process improvement. Admin. Sci. Quart. 47(2):265–295.Crossref, Google Scholar
• Rudolph JW, Repenning NP (2002) Disaster dynamics: Understanding the role of quantity in organizational collapse. Admin. Sci. Quart. 47(1):1–30.Crossref, Google Scholar
• Rummel N (2008) Donaldson: Short-term earnings led to woes. Investment News (September 18), http://www.investmentnews.com/article/20080918/REG/809189995/donaldson-short-term-earnings-led-to-woes.Google Scholar
• Staw BM (1976) Knee-deep in the big muddy: A study of escalating commitment to a chosen course of action. Organ. Behav. Human Performance 16(1):27–44.Crossref, Google Scholar
• Staw BM (1981) The escalation of commitment to a course of action. Acad. Management Rev. 6(4):577–587.Crossref, Google Scholar
• Stein JC (1989) Efficient capital-markets, inefficient firms—A model of myopic corporate-behavior. Quart. J. Econom. 104(4):655–669.Crossref, Google Scholar
• Sterman JD (1989) Modeling managerial behavior: Misperceptions of feedback in a dynamic decision making experiment. Management Sci. 35(3):321–339.Link, Google Scholar
• Sterman JD (1994) Learning in and about complex systems. System Dynam. Rev. 10(2–3):291–330.Crossref, Google Scholar
• Sterman JD (2000) Business Dynamics: Systems Thinking and Modeling for a Complex World, 1st ed. (McGraw-Hill/Irwin, Boston).Google Scholar
• Strogatz SH (1994) Nonlinear Dynamics and Chaos: With Applications to Physics, Biology, Chemistry, and Engineering (Addison-Wesley Publishing, Reading, MA).Google Scholar
• Sull D, Eisenhardt KM (2015) Simple Rules: How to Thrive in a Complex World (Houghton Mifflin Harcourt, New York).Google Scholar
• The Aspen Institute (2009) Overcoming Short-termism: A Call for a More Responsible Approach to Investment and Business Management. The Aspen Institute Business and Society Program, September 9, 2009.Google Scholar
• Welch J (2007) Unpublished personal interview with N. Repenning, September 2007.Google Scholar
• Welch J, Welch S (2005) Winning, 1st ed. (Harper Business Publishers, New York).Google Scholar
• Winter SG (2003) Understanding dynamic capabilities. Strategic Management J. 24(10):991–995.Crossref, Google Scholar
• Zuashkiani A, Rahmandad H, Jardine AKS (2011) Mapping the dynamics of overall equipment effectiveness to enhance asset management practices. J. Quality Maintenance Engrg. 17(1):74–92.Crossref, Google Scholar