Time horizons and technology investments / Committee on Time Horizons and Technology Investments, National Academy of Engineering.

Format:

Book

Author/Creator:

National Academy of Engineering. Committee on Time Horizons and Technology Investments.

Language:

English

Subjects (All):

Business planning--United States.

Business planning.

Capital investments--United States.

Capital investments.

Technological innovations--Economic aspects--United States.

Technological innovations.

Competition--United States.

Competition.

Physical Description:

1 online resource (118 p.)

Edition:

1st ed.

Place of Publication:

Washington, D.C. : National Academy Press, 1992.

Language Note:

English

Summary:

It is frequently argued that U.S. corporations have shorter time horizons for planning and investment than their Japanese and German competitors. This argument, though widely accepted in studies of U.S. competitiveness, has rarely been examined in depth. Time Horizons and Technology Investments explores the evidence that some U.S. corporations consistently select projects biased toward short-term return and addresses factors influencing the time-related preferences of U.S. corporate managers in selecting projects for investment. It makes recommendations to policymakers and managers about policies to mitigate negative external influences and about strategies to remove internal biases toward noncompetitive decisions.

Contents:

TIME HORIZONS AND TECHNOLOGY INVESTMENTS

Copyright

Preface

Contents

Executive Summary

1 The Issue and the Approach

THE APPROACH AND METHOD OF THE STUDY

DO U.S. CORPORATE EXECUTIVES HAVE SHORT TIME HORIZONS?

MACROECONOMIC EVIDENCE: RELATIVE RATES OF INVESTMENT IN FIXED CAPITAL AND R&amp

D

SUMMARY AND CONCLUSION

2 Explaining Time Horizons and Technology Investments

WHAT IS "NEAR-TERM ORIENTED" MANAGEMENT AND GOVERNANCE?

THE MECHANICS OF CAPITAL COSTS, RISK, AND THE SPECIAL CHARACTERISTICS OF INVESTMENTS IN TECHNOLOGY DEVELOPMENTS

Perspectives on the Cost of Capital

Financial Markets and Technology Investments

Investment Hurdle Rates and Technology Investments

DETERMINANTS OF COMPANY INVESTMENT TIME HORIZONS

3 Company Time Horizons and Technology Investments: The Roles of Corporate Governance and Management

THE IMPORTANCE OF GOVERNANCE: THE ROLES OF BOARDS OF DIRECTORS

Boards of Directors' Choices and Time Horizons

Compensation and Selection of Board Members

THE PREROGATIVES OF MANAGEMENT AND CORPORATE TIME HORIZONS

The Development and Execution of Corporate Strategy

Design and Implementation of Career Development Systems and Compensation Schemes

Decision-Making Methods and Performance Measurement

SUMMARY AND RECOMMENDATIONS

4 Time Horizons and Cost of Capital

FINANCIAL MARKETS AND TIME HORIZONS IN THE 1990S

A COMPANY'S CONTROL OVER ITS COST OF CAPITAL

Financial Markets, Technology, and Company Valuation

Time Horizons, Technology Investments, and Ownership Structures

THE ECONOMIC COST OF CAPITAL: NATIONAL DIFFERENCES AS A CRUCIAL ISSUE

5 The Influences of Government Investments and Regulatory Policies on Corporate Time Horizons

GOVERNMENT POLICIES AND A STABLE ENVIRONMENT FOR INVESTMENT.

The Mixed Impact of Regulation and the Legal Environment

The Government's Role in the Creation of Stable Markets

GOVERNMENT INVESTMENTS, COMPLEMENTARY ASSETS, AND PRIVATE-SECTOR TIME HORIZONS FOR INNOVATION

Infrastructure

Research and Development

Time Horizons and the Public-Sector Investment Portfolio

6 Summary Argument: Understanding Time Horizons and Technology Investments

References

Appendix A Cost of Capital-The Managerial Perspective

ABSTRACT

APPROACH

THE INTERVIEWS

Question 1: Is the Cost of Capital an Important Source of Competitive Disadvantage?

Group 1: Cost of Capital is a Critical Competitive Factor

Group 2: The Cost of Capital Is Not a Major Competitive Factor

Group 3: The Mixed View

Question 2: How Do the Firms that Emphasize the Competitive Impact of the Cost of Capital Manage the Problem?

Question 3: What Accounts for the Differences in Views on the Cost of Capital?

Industry Type

Size

Capital Intensity

Financial Health and Capital Availability

Market Leadership

Conclusion

NOTES

REFERENCES

Appendix B Biographical Information on Committee Members.

Notes:

Includes bibliographical references (p. 74-77).

ISBN:

9786610211517

9781280211515

1280211512

9780309584104

0309584108

9780585119809

0585119805

OCLC:

44963862