An attention-based view of short-termism: The effects of organizational structure

Robert Kleinknecht*, Hammad Ul Haq, Alan R. Muller, Karolus O. Kraan

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

6 Citations (Scopus)
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Abstract

Debates about short-termism in business tend to center around the role of shareholder pressures and managers’ incentives, while the role of organizational structure remains understudied. In our paper, we adopt an attention-based lens to elucidate the role of organizational structure in directing the attention of management towards pressures for short-term results at the expense of the long term. Specifically, we argue that greater scale of operations, hierarchy, bureaucracy, and workforce flexibility reduce slack resources available to senior managers and increase the complexity of information presented to them in different ways. As a result, the senior managers shift their attention to short-term pressures, which are more easily understood, at the expense of attention for long-term considerations. Analysis based on a survey of senior managers in 3221 private firms in the Netherlands provides support for our arguments.
Original languageEnglish
Pages (from-to)244-254
Number of pages11
JournalEuropean Management Journal
Volume38
Issue number2
Early online date14-Sep-2019
DOIs
Publication statusPublished - Apr-2020

Keywords

  • Attention-based view
  • Organizational structure
  • Short-termism
  • CORPORATE GOVERNANCE
  • FLEXIBLE LABOR
  • SELECTIVE PERCEPTION
  • EARNINGS PRESSURE
  • FIRM
  • INNOVATION
  • KNOWLEDGE
  • HORIZON
  • ORIENTATION
  • PERFORMANCE

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