Article by Peter F. Drucker on the necessity of balance between short-term and long-term thinking in American business practices. Drucker begins the article explaining how American businesses have been encouraged to shift from short-term to long-term planning, and how this approach supporting short-term vs. long-term planning for business is problematic. He proceeds to indicate how short-term and long-term planning are two necessary parts of the same process, highlighting the need for both short-term and long-term operating budgets in a firm and emphasizing how American operations contrast with the successful practices of the Japanese. Drucker then identifies promotion and service as the two areas where US companies most neglect long-term budgeting, ultimately recommending that companies should match compensation structure to longer-term planning by basing bonuses on five-year rolling results.
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