US Business Failures 11-23-25

Examples of US business short-term thinking often involve sacrificing long-term value and sustainability for immediate financial gains. These practices are frequently driven by pressure from investors focused on short-term metrics like quarterly earnings.  

Specific Business Examples

Boeing 737 Max: Corner-cutting and prioritizing speed to market over safety had disastrous long-term consequences in the form of fatal crashes, reputational damage, and financial losses.

Wells Fargo: The creation of fraudulent customer accounts to meet aggressive short-term sales targets led to major scandals, legal issues, and a significant blow to the company's reputation.

Johnson & Johnson: Aggressive marketing of opioids, which prioritized immediate profits, resulted in significant legal liabilities and public health crises.

Blockbuster and Toys R' Us: These companies failed to adapt to changing markets and invest in long-term innovation (like digital streaming or e-commerce) because their focus was on maintaining existing business models and short-term returns, ultimately leading to their demise.

General Electric, AT&T, and Apple: These firms, in some cases, moved jobs overseas to chase cheap labor for immediate cost savings, only to find that the initial wage savings were outweighed by long-term costs in transportation, quality control issues, and difficulties coordinating product development with manufacturing. 

General Examples of Short-Term Practices

Underinvestment in R&D and Capital Equipment: Companies might cut spending on research and development or new equipment to boost short-term earnings, which inhibits future innovation and growth.

Large Share Repurchases (Buybacks): Using capital to buy back stock can temporarily increase the share price and meet short-term earnings targets, but it often comes at the expense of investing in areas that fuel future economic growth.

Hiring Decisions: Prioritizing hiring candidates with specific experience immediately, rather than nurturing young talent internally, may save on initial training costs but can hinder long-term employee development and retention.

Sacrificing Quality for Cost: Choosing the cheapest suppliers or materials to maximize immediate margins, without considering potential issues like late deliveries or poor quality, can damage customer relationships and lead to lost repeat sales in the long run.

Meeting Quarterly Targets via Expense Cuts: Executives may defer valuable investments in areas like marketing, R&D, or employee training to meet specific quarterly earnings goals, thus sacrificing long-term value creation.

Ignoring Sustainability: Failing to preempt environmental regulations or invest in sustainable practices to avoid short-term costs can lead to greater financial and reputational risks down the road. 

For more information on the impact of short-term thinking and potential solutions, resources like the Harvard Business Review and McKinsey & Company provide extensive analysis. 

Examples of US business short-term thinking often involve sacrificing long-term value for immediate gains, driven by pressure to meet quarterly earnings targets. This approach can lead to significant long-term negative consequences, as demonstrated by the following examples: 

Specific Corporate Examples and Associated Issues

Boeing: The corner-cutting measures on the 737 Max program, aimed at quick production and profit, resulted in significant safety issues and disastrous long-term consequences for the company's reputation and finances.

Wells Fargo: The creation of millions of fraudulent customer accounts to meet aggressive short-term sales goals is a prime example of prioritizing immediate targets over ethical conduct and customer trust, leading to major scandals and regulatory penalties.

Johnson & Johnson: The company's involvement in the opioid crisis, driven by a focus on short-term profits from the drugs, led to a public health crisis and severe legal and financial repercussions. 

General Business Practices

Cutting R&D and Capital Investment: Companies under pressure to show immediate profits may reduce spending on research and development (R&D) or capital equipment, which are crucial for future innovation and growth, but don't offer immediate returns.

Prioritizing Immediate Marketing Tactics: Focusing solely on marketing channels that drive immediate sales (e.g., Google ads for low-ticket items) while ignoring long-term brand building or large-ticket channels with longer sales cycles (e.g., trade shows) can limit future growth opportunities.

Share Buybacks at the Expense of Investment: Using cash for large share repurchases to boost short-term stock prices and meet earnings per share targets, rather than investing that money back into the business for long-term projects, is a common short-term practice.

Outsourcing for Fleeting Labor Cost Savings: Moving jobs overseas to chase cheaper labor without fully considering the long-term costs associated with transportation, quality control issues, supply chain coordination difficulties, and potential loss of intellectual property.

Failure to Invest in Employee Training and Development: Neglecting workforce development programs to save money in the near term can result in an ill-equipped workforce, high employee turnover, and difficulty adapting to future industry changes.

Choosing the Cheapest Vendor over Quality: Selecting the lowest-cost option for services like shipping without evaluating crucial data points such as reliability (e.g., delivery success rates) can lead to customer complaints, lost repeat sales, and a damaged brand reputation in the long run.

Setting Unreasonable Deadlines: Accepting unrealistic workloads and deadlines to please clients or superiors in the short term, which can lead to employee burnout, low team morale, and compromised work quality over time.

Aggressive Discounting to Meet Quarterly Revenue Goals: Offering deep, aggressive discounts to hit a quarterly revenue target can erode brand value and condition customers to wait for sales, harming long-term profitability. 

These examples highlight how an excessive focus on immediate financial metrics and appeasing short-term investor demands can undermine a company's sustained success and stability. 

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Comments

The US Auto Industry destroyed itself in the 1970s by failing to focus on fuel efficiency. All other US Manufacturing Companies destroyed themselves in the 1990s by failing to focus on automation to lower their costs.

Norb Leahy, Dunwoody GA Tea Party Leader