Managerial Myopia and Sustainable Firm Performance

Managerial myopia, characterised by an excessive focus on short-term financial metrics at the expense of long-term strategic goals, has emerged as a critical barrier to sustainable firm performance. When executives prioritise immediate earnings or quarterly targets, investments in research and development, environmental innovation and capacity building can be deferred or abandoned. Over time, this tendency erodes competitive advantage, stunts green innovation and undermines stakeholder trust. The phenomenon is shaped by internal corporate governance structures, external investor pressure and the broader regulatory environment. As global attention shifts towards climate resilience and sustainable development, understanding and managing myopic behaviour becomes central to firm resilience. Practical countermeasures—ranging from incentive alignment and enhanced disclosure to digital transformation and stakeholder engagement—are increasingly advocated to redirect managerial time horizons. The interplay between behavioural drivers and institutional reforms has become a focus for scholars and practitioners seeking to reconcile short-term performance demands with the imperative of long-term value creation.

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Managerial Myopia and Sustainable Firm Performance publication trend

The graph below shows the total number of articles in managerial myopia and sustainable firm performance across all publications each year (not limited to Nature Index journals).

Technical terms

Managerial myopia: The tendency of executives to prioritise short-term financial targets over long-term strategic investments and growth.

Green innovation: The development and implementation of products, processes or practices that reduce environmental impact and enhance resource efficiency.

Asset financialisation: The shift of corporate resources from productive investment towards financial assets and instruments.

Earnings guidance: Forecasts or forward-looking statements issued by management to signal expected financial performance.

Digital transformation: The integration of digital technologies into business processes to improve information processing, decision-making and governance.

Corporate governance: The system of rules, practices and processes by which a firm is directed and controlled, including mechanisms to align managerial incentives with stakeholder interests.

References

1. The association between managerial short-termism and green innovation: the moderating role of firms’ digital transformation. Asia Pacific Journal of Innovation and Entrepreneurship (2023).
2. Managerial Myopia, Earnings Guidance, and Investment*. Contemporary Accounting Research (2022).
3. The Influencing Mechanism of Managerial Myopic Behavior on Enterprise Sustainable Development Performance: Evidence Based on Listed Companies in China. Sustainability (2024).