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Management article
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Reference no. 78406
Published by: Harvard Business Publishing
Published in: "Harvard Business Review", 1978

Abstract

Bonuses and incentive compensation encourage management''s preoccupation with short-term financial results. This emphasis is an important contribution to the United States''s lag behind other countries in research and development investment and capital spending. Federal tax policies have failed to provide incentive for investment to further economic growth. Restructured management incentives would reintroduce entrepreneurial spirit without sacrificing the systematic cost-benefit approach to decision making.

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Abstract

Bonuses and incentive compensation encourage management''s preoccupation with short-term financial results. This emphasis is an important contribution to the United States''s lag behind other countries in research and development investment and capital spending. Federal tax policies have failed to provide incentive for investment to further economic growth. Restructured management incentives would reintroduce entrepreneurial spirit without sacrificing the systematic cost-benefit approach to decision making.

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