Final answer:
The statement is True. Objectives are broad outcomes like 'increased profitability,' whereas goals are specific, such as 'increase profitability by 15% in 2010 over 2009.' Goals are part of effective business planning, derived from objectives.
Step-by-step explanation:
The statement that an example of an objective is "increased profitability," while an example of a goal is "to increase the firm's profitability in 2010 by 15% over 2009" is True. Objectives are broad, general outcomes that a business aims to achieve, such as improved profitability or market share. In contrast, goals are more specific and detailed, often including measurable targets and time frames, which in the given example is a 15% increase in profitability compared to the prior year. Setting goals is part of effective business planning and relates to the concept of SMART goals, where 'S' stands for Specific and 'M' stands for Measurable, and so on.
Privately owned firms are motivated to earn profits, which can be defined as the difference between total revenue and total cost. To attain higher profits, businesses must make decisions that are not only aimed at increasing revenues but also at managing costs appropriately. Economic profit considers both explicit and implicit costs, while accounting profit looks only at explicit costs. Businesses establish objectives and goals to navigate the trade-offs and decision-making processes inherent in seeking profitability.
In short, objectives set the direction for a business, while goals are the specific steps taken to fulfill those objectives, often articulated in a measurable and time-bound manner.