Evaluate the environmental factors that contribute to corporate management’s need to manage corporate earnings to align with market expectations, indicating the potential long- term risks to financial performance and sustainability.  

Environmental factors such as economic conditions, consumer demand, government regulations and competition can all contribute to corporate management’s need to manage corporate earnings to align with market expectations. In order to remain competitive in today’s dynamic business environment, companies must focus on managing their financial performance in a way that meets the expectations of investors. This often involves short-term strategies that increase profitability by reducing costs or increasing revenues but may not be sustainable long-term. Such strategies can include cutting expenses, reducing employee benefits and bonuses, and delaying investments or research projects which could affect product innovation or customer satisfaction.

In the long-term, this kind of focus on meeting near term expectations can lead to adverse outcomes for the company. It does not foster an environment of innovation or growth which is necessary for continued success; instead it creates a cycle of cost cutting and decreased investment resulting in slower rates of growth over time. Additionally, artificially managing earnings might also lead to potential legal issues due to misleading statements made about the company’s financial position in order to maintain stock prices at desired levels. Furthermore, focusing solely on near term results without considering potential risks associated with them may hinder sound decision making when it comes to strategic investment decisions leading ultimately lead further delays in reaching desired goals.