Final answer:
Businesses set themselves specific, measurable, and time-bound targets known as objectives to help them achieve their aims. Objectives are created with the SMART criteria in mind - Specific, Measurable, Attainable, Realistic, and Timely - to ensure they are effective and guiding toward success.
Step-by-step explanation:
The targets that businesses set themselves to help them achieve their aims or goals are called objectives. Objectives are essential as they are specific, measurable, and time-bound, which means they have a clear definition, can be tracked, and have a deadline for achievement. Setting objectives involves defining your goals and breaking them into achievable action steps with a target date for completion, ensuring that they are realistic and attainable. An objective that supports other goals is considered relevant and should make sense within the larger context of the business's strategy.
For example, a business objective might be to increase sales by 10% within the next quarter. This objective is specific and measurable through sales data, realistic if the business understands its market and has the right strategies in place, and time-bound by the quarterly deadline.
Effective objectives can lead to making profitable decisions and provide motivation and clarity for individuals within the company, as they work towards the company's larger goals. Following the SMART criteria can facilitate the financial decision-making process and help in setting a clear pathway for future success.