Short term or long term view
q.Managers should not focus on the current stock value because doing so will lead to overemphasis on short-term profits at the expense of long-term profits.
In your post, explain what is meant by this statement. Describe how management might decide whether to focus on short term or long term goals and how that decision impacts the organization. Next, using the financial balance sheet as displayed in the text, compute an example of how focusing on short term profits can be detrimental to long term profits. Share your opinion regarding whether you feel it’s a better option to focus on short term or long term goals. Use evidence from the text or external sources to support your position. Your post should be 200-250 words in length.
……………….Answer Preview………………….
Many business organizations aim at maximizing profits rather than maximizing the value of their products. This often leads to these businesses focusing on the current stock rather than on the future stock. This leads to these businesses accruing a lot of short term profits, which ends up leaving the management team obsessed with making maximum profits. Many businesses have been able to achieve this with some of them recording the highest profits in their history. However, these enormous profits are often short lived (Henderson & Hooper, 2006). As the businesses aim to make maximum profits, they end up neglecting…………………
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