Home » Long Term Orientation Vs Short Term Orientation, and How To Be a Long-termist

Long Term Orientation Vs Short Term Orientation, and How To Be a Long-termist

by Fosburit
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According to Geert Hofstede‘s fifth cultural dimension, long term orientation or short term orientation can also be called confucian dynamism, which refers to social members’ acceptance of a certain culture to delay meeting their demand of material, emotional, and social success. 

Hofstede’s model expresses the extent to which people’s behavior is driven by long-term goals. This reflects society’s attitude towards time, they tend to schedule things for long-term or short-term time horizons.

Long term orientation is focused on the future, respect values of the future, with the belief that the future will be more prosperous than the present, and social members with the cultural perspective of stronger perseverance and thrift to wait for the future rewards.    

Short term orientation is just the opposite, concentrating on the present, place values on the past and present, emphasis on quick results, respect for tradition, preservation of ‘face’ and pursuing timely pleasure rather than inner peace. 

How to Be Long Term Orientation?

During the time of black swans flying randomly, everyone hopes to find inner peace and the way against uncertainty. The pursuit of long term and the continuous exploration of value may provide some answers.

The only constant is the change. You may think: How can keep soul peaceful? As a stock investor, how can you find a compass through cycles and fog? As an entrepreneur, how can you continue to create value?

When these questions are put together, there is a very clear answer that shines there, that is “Long Term Orientation”: invest time and belief in things that can produce long-term value. 

1. Long-term is the foundation, while persistence and focus are required.

Long Term Orientation, in simple words, long term is the basis. Your previous understanding of the long term maybe 100 days, half a year or 1 year. The actual long term could be 5 to 10 years, or even your lifetime. 

When the goal cannot be achieved in a short period of time, most people will give up. The basis of a long-termist is that you can maintain a long-term process, without paying attention to results or benefits immediately. 

Regarding the process and the result, most long-termists may have a common understanding, that is, the process is often more important than the result, and the result is only a point in the long-term line of the process. Goals are important, but goals are based on the results of long-term efforts.

To achieve a long cycle, you need to know how to persist in doing things, not to give up easily, and of course, you can’t be stubborn. 

Persistence and concentration are required. In this process, when you encounter problems, you should know how to find a way to solve them. 

Your time and energy are limited. Persistence is very important, but the concentration is even more important. Focus your energy on the things you most want to last in the long term. 

2. Continuous improvement

All long-term cycles are composed of multiple short-term cycles. The understanding of long-term cycles may be short-cycle iterations and continuous improvement. 

It is important to understand that true long-termism is definitely not a simple cycle and repetition like the movement of the hour and minute hands of your watch. Such long-termism itself does not have much meaning. 

We graduated from school and entered into society. We may not retire until we have worked for 40 years or more. Then, are we long-termists if we work for such a long period of time? 

I always don’t think long-term work is long-termism, but the work you are engaged in enables you to continue to study, research and practice in a certain professional field, and improve work experience and ability continuously. Only this can be said to be long-termism. 

We don’t want quick success, but it doesn’t mean that we don’t want continuous improvement. 

Long-termism is self-improvement and realization of value, rather than simple repetition. To do this, you must realize that the long cycle is divided into multiple short cycles, and suggested to check and review end of each short cycle. 

Let us think and review, and constantly correct and adjust ourselves. Occasionally pauses are important, but pauses do not mean stop, pauses are for better progress. Knowing self-reflection and review at all times is the key to your spiraling upward and continuous growth.

3. Get out of the comfort zone

The law of entropy increases or the second law of thermodynamics, meaning that everyone tends to adapt to the law of entropy increase and develop in the direction of chaos and disorder, and this direction is comfortable for most people. 

For example, telling you that you don’t need to work, you can eat, drink, play and make money every day. It is estimated that most people want this kind of lifestyle. 

The law of negative entropy and resistance to increase in entropy is to get out of your comfort zone, and you must take the initiative to find something that makes you uncomfortable to do it for a long time. 

And only this kind of negative entropy can make you continue to learn and grow. Our desires are often infinite, and many times you may need to control desires and postpone satisfaction.

Long term orientation needs someone to control the desire and do what needed.

4. Inner Peace 

A long-termist is a person with strong inner strength and self-driving force. Only in this way can you plan and act in accordance with your values ​​and goals. 

On your way to persistence and action, you may be lonely, with no partners, and no applause. Just fulfill an agreement between you and yourself, and your audience is yourself. 

You have to believe that a thing you can really persist in doing for a long time will let you become a powerful person in the future, rather than let yourself become the person others admire. 

The original intention of insisting on one thing is often to achieve a goal, and the real lasting motivation is to listen to the inner voice. No audience, no applause, is often the best state for you to stick to one thing for a long time.

Long Term Orientation Examples

Long Term Orientation Countries

It is believed that the long-term orientation has a strong relationship with the economic growth of East Asian countries in the late 20th century, while the United States is recognized as a short term orientation country with a score of 26 by Hofstede.

  1. South Korea: scores 100.
  2. Taiwan: scores 93.
  3. Japan: With a score 88, Hofstede said Japan is one of the most long term orientation societies and Japanese see their life as a very short moment in a long history of mankind. 
  4. China: China scores 87 in the dimension of long-term orientation, which means with a very pragmatic culture. Social members have a strong propensity to save, thriftiness, and perseverance in achieving future results.
  5. Singapore: scores 72.

Long Term Orientation Example in Investment

Zhang Lei (the outstanding student of Mr. David Swensen), the author of the book “Value” said “In many years of investment practice, I gradually understand that the victory of long-termism is not only related to the good result of the investment, but more importantly, is to discover the way to create value during the investment journey, to meet a group of like-minded people, and work together with outstanding entrepreneurs to overcome obstacles and create the most beneficial value for the society and others.”

As long as you maintain rational curiosity, honesty and independence, insist on being positive, and choose investment methods that make you happy, you will be able to understand the meaning of value investment from a longer-term and more sustainable perspective.

There may be one criterion for investment, which is whether it is creating real value and whether this value is beneficial to the overall prosperity of society. Adhering to this standard, time will definitely give rewards to you.

Covid-19 has affected countless families and all walks of life. The uncertainty of the world economy makes it difficult for people to judge the future.

Difficulties are a mirror, and the deepest reflections often come from this. Whenever a crisis occurs, it provides a rare opportunity for stress testing and investment review, and in the end it is values ​​that determine how you respond and deal with yourself.

In such a special period, as a long term investor, it is not suggested to pay more attention to the short term profit and cash flow of the company, but believe in the future. The short term revenues of many companies must have been reduced due to the Covid-19. But you can imagine when the companies, which the stocks you invest in, get rid of the temporary difficulties, what’s the price they will be.

Long Term Orientation Example in Company

“Rome wasn’t built in a day” For example, in the competition of companies, when you are based in the short-term, your core competitiveness, organizational capabilities, and everything that involves capabilities is difficult to build in the short-term, and they are all built up by time.

Why can companies form their core competitiveness? It is because as long as it is the ability that takes time to establish, it is difficult for others to acquire in a short period of time. If others can easily obtain it in a short period of time, together with capital, they will have core competitiveness, and you will be squeezed out of the track.

Final Thought

In fact, every choice in life is an important value judgment, and every judgment comes from people’s underlying beliefs. Long term orientation is not only a culture, but also a value. What streams compete for lies in perseverance rather than speed.

No matter what kind of work you are engaged in, as long as you focus on the long-term and focus on value, you will be able to withstand the test of time and find your way to success.

Everyone can become their own value investor. Time, energy, pursuit and beliefs. These countless choices are all about investing in their own life. In the journey of long term orientation, you’re the friends of time.

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