Building the healthy corporation (organizational growth)

Building the healthy corporation (organizational growth)

Dobbs R., Leslie K., Mendonca L.T.The McKinsey Quarterly (USA), 2005 Vol. 3 No. 3, Start page: 63, No. of pages: 9

Purpose – To discuss the importance of balancing short term and long-term perspectives in the management of a successful company. Design/methodology/approach – States that management teams need to demonstrate to their board of directors and to the capital markets that they are focusing on long-term growth as well as the improvement of short-term corporate performance. Points out that some companies are focusing exclusively on short-term results and quarterly performance targets at the expense of long-term value creation. Shows that stock market returns and the market value of shares are primarily driven by cash flow expectations beyond the next three years and dismisses claims that financial markets are only interested in the short-term. Observes that there is a growing awareness among companies of the need to manage for long-term profitability and identifies five aspects of organizational health and performance that can build the resilience and capacity to achieve and sustain growth. Discusses strategy, organizational metrics, the nature of dialogue with stakeholders, leadership behavior and corporate governance. Originality/value – Explains that whilst a focus on short-term corporate performance is understandable, companies need to achieve a dual focus on the immediate and future creation of value.Style: General reviewISSN:0047-5394Reference: 34AT202

Keywords: Economic growth, Investors, Organizational performance,Performance management