What managers do in that situation, Jensen argued, is to make decisions that “will at least appear to generate the market’s expected performance in the short run.” In other words they start to make investments that encourage markets to believe the firm still has value-creating potential, even if they know that those investments will ultimately fall short. By doing this, managers can postpone the day of reckoning until they have left the company and can escape the consequences.
Typically, they adopt one or both of two strategies: Investing in fashionable technologies...Making glamorous acquisitions."
If overvalued equity were a periodic problem associated with bubbles, we would be concerned but not alarmed. But we’re coming to believe that this phenomenon is more commonplace and more serious than we initially suspected, and that it affects many important, capital-consuming sectors in the so-called real economy.
...is precisely when executives feel on top of the world that they need to consider the possibility that their strategies have run out of steam. To avoid the inevitable crash, they need to look for good reasons why their seemingly triumphant approach might fail and figure out fresher and more-realistic narratives for value creation."
Trecho do artigo "The Overvaluation Trap"do Roger L. Martin e Alison Kemper