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Experiences of Embedding Long-Term Thinking in an Environment of Short-Termism and Sub-par Business Performance: Investing in Intangibles for Sustainable Growth

Kosheek Sewchurran (), Johan Dekker () and Jennifer McDonogh ()
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Kosheek Sewchurran: University of Cape Town
Johan Dekker: University of Cape Town
Jennifer McDonogh: University of Cape Town

Journal of Business Ethics, 2019, vol. 157, issue 4, 997-1041

Abstract: Abstract This paper presents a case study of the South African operation of a logistics company, operating in a context of short-termism and under-performance. Frustration with managing in this context, and concern that this environment might erode the customer value proposition, prompted an exploration of the question: “How can the business prioritise its investment in intangibles to support sustainable growth in an environment of short-termism and sub-par business performance?” The study followed an inductive grounded theory approach and began with an exploration of the system of short-termism as it was being experienced by the management team. This evolved in an iterative process to include an exploration of the customer value proposition, the organisation’s capabilities and the system of investment in intangibles. Data were collected over a period of 6 months, across a series of four stages as the management team grappled with the short-term financial objectives imposed on them. The data categories were used to develop 214 propositions across all stages. Through the four stages, four artefacts were developed from the propositions (1) a causal loop diagram of the system of short-termism; (2) a documented value proposition; (3) an assessment of the health of the business’ capitals; and (4) a multi-year intangibles investment programme. The findings indicate that a focus on investment in intangible assets can play a vital role in stimulating sustainable value creation in an environment of historically poor returns on investment and pressure for short-term financial results. It is suggested that investment in intangibles can be introduced as a multi-year capabilities investment plan. The study succeeded in getting investment in intangibles approved and the implication is that long-term decision-making can co-exist in an environment of short-termism and low growth.

Keywords: Capabilities; Customer value proposition; Intangible assets; Short-termism; Systems; Value creation; Strategic management (search for similar items in EconPapers)
Date: 2019
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