What is short-termism in a business context?

A business approach that prioritises immediate results and quick returns, typically focusing on quarterly or annual performance metrics.

Define long-termism as a business approach.

A business approach that prioritises sustainable growth and strategic objectives over extended periods, often spanning several years or decades.

How might short-termism damage a business's long-term competitiveness?

It may lead to decisions that boost immediate profits but harm future performance, such as cutting research and development spending or reducing staff training.

Give an example of a decision a short-termist business might make that could harm its future position.

Cutting research and development spending or reducing investment in staff training to boost immediate profits.

How does long-termism enable sustainable competitive advantage?

It enables investment in innovation, brand building, and employee development that may reduce short-term profits but creates lasting competitive strengths.

What types of investment might a long-termist business prioritise despite reduced short-term profits?

Investment in innovation, brand building, and employee development.

Edexcel A-Level Business 9BS0

Meeting Customer Needs

Topic overview The market Market research Market positioning

The Market

Topic overview Demand Supply Markets Price elasticity of demand Income elasticity of demand

Marketing Mix and Strategy

Topic overview Product/service design Branding and promotion Pricing strategies Distribution Marketing strategy

Managing People

Topic overview Approaches to staffing Recruitment, selection and training Organisational design Motivation in theory and practice Leadership

Entrepreneurs and Leaders

Topic overview Role of an entrepreneur Entrepreneurial motives and characteristics Business objectives Forms of business Business choices Moving from entrepreneur to leader

Raising Finance

Topic overview Internal finance External finance Liability Planning

Financial Planning

Topic overview Sales forecasting Sales, revenue and costs Break-even Budgets

Managing Finance

Topic overview Profit Liquidity Business failure

Resource Management

Topic overview Production, productivity and efficiency Capacity utilisation Stock control Quality management

External Influences

Topic overview Economic influences Legislation The competitive environment

Business Objectives and Strategy

Topic overview Corporate objectives Theories of corporate strategy SWOT analysis Impact of external influences

Business Growth

Topic overview Growth Mergers and takeovers Organic growth Reasons for staying small

Decision-Making Techniques

Topic overview Quantitative sales forecasting Investment appraisal Decision trees Critical Path Analysis

Influences on Business Decisions

Topic overview Corporate influences Corporate culture Shareholders versus stakeholders Business ethics

Assessing Competitiveness

Topic overview Interpretation of financial statements Ratio analysis Human resources

Managing Change

Topic overview Causes and effects of change Key factors in change Scenario planning

Globalisation

Topic overview Growing economies International trade and business growth Factors contributing to increased globalisation Protectionism Trading blocs

Global Markets and Business Expansion

Topic overview Conditions that prompt trade Assessment of a country as a market Assessment of a country as a production location Reasons for global mergers or joint ventures Global competitiveness

Global Marketing

Topic overview Marketing Niche markets Cultural/social factors

Global Industries and Companies

Topic overview The impact of MNCs Ethics Controlling MNCs

Influences on Business Decisions

Corporate influences

4 things to know
Paper 2 and Paper 3

Overview

Short-termism against long-termism and why ownership affects the choice, evidence-based against subjective decision making, and the factors that decide the balance between data and judgement.

What you need to know

Answer each one before you reveal it.

Your recallNot started

Key term

Distinguish short-termism from a long-term perspective.

Key term

Why are listed companies more prone to short-termism than private ones, and what can suffer underinvestment as a result?

Evaluation

What is subjective decision making, and what does it offer?

Evaluation

Which type of decision typically benefits more from evidence-based approaches?

Questions from this subtopic

Each one with the model answer underneath.

1
What is short-termism in a business context?
Model answer
A business approach that prioritises immediate results and quick returns, typically focusing on quarterly or annual performance metrics.
2
Define long-termism as a business approach.
Model answer
A business approach that prioritises sustainable growth and strategic objectives over extended periods, often spanning several years or decades.
3
How might short-termism damage a business's long-term competitiveness?
Model answer
It may lead to decisions that boost immediate profits but harm future performance, such as cutting research and development spending or reducing staff training.
4
Give an example of a decision a short-termist business might make that could harm its future position.
Model answer
Cutting research and development spending or reducing investment in staff training to boost immediate profits.
5
How does long-termism enable sustainable competitive advantage?
Model answer
It enables investment in innovation, brand building, and employee development that may reduce short-term profits but creates lasting competitive strengths.
6
What types of investment might a long-termist business prioritise despite reduced short-term profits?
Model answer
Investment in innovation, brand building, and employee development.

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