Final answer:
A focus on the short run, characterized by fixed inputs, may conflict with long-run goals where firms can adjust all factors of production. Concentrating solely on immediate profits can divert attention from essential investments that secure future success, potentially incurring substantial long-term costs.
Step-by-step explanation:
It is indeed true that a focus solely on the short run may conflict with a long-run goal. In the field of business and economics, the short run is characterized by fixed inputs where firms cannot modify certain aspects of production, such as capital and plant size. On the other hand, the long run is a period sufficient for a firm to adjust all factors of production, including fixed resources. This longer perspective is where the company can make comprehensive changes to its operations to achieve sustainability and growth.
Therefore, if a business concentrates only on short-term objectives—like maximizing immediate profits—it may neglect investment in technology, workforce skills, or R&D that could lead to significant advantages in the future. In contrast, adopting a balanced approach that keeps sight of long-term objectives can ensure that short-term actions do not undermine future success, despite the absence of a precise temporal demarcation between the two periods.
Smaller economies may particularly suffer from a short-sighted approach because they are more susceptible to the international movements of capital and goods, which can lead to volatile inflation and disrupt the balance of trade. Thus, the short-run focus potentially incurs substantial long-term costs if it diverts attention from essential productivity gains that are vital for enduring competitiveness.