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Definition of Goal setting in business Business goal A common goal is a goal is a target, a purpose, a worthy ideal that you are trying to realize. In business term, it is an objective or target to be achieved, generally by a specific date. . For example, corporate management may set a goal of doubling revenues in five years Goals are among of the most written and talked about tools of business management. Goals and objectives provide organizations with a blueprint that determines a course of action and aids them in preparing for future changes. A goal can be defined as a future state that an organization or individual strives to achieve. For each goal that an organization sets, it also sets objectives. An objective is a short-term target with measurable results. Without clearly-defined goals and objectives, organizations will have trouble coordinating activities and forecasting future events. Setting a business goal Goal-setting is a set of skills that involves using goals in particular ways to achieve a variety of effects. Goal-setting theory has become a popular and effective tool for management in applying organizational psychology and motivating a workforce. Management can also employ goal setting to focus employees on matters of importance to the success of the entire organization, and how they can personally contribute to accomplishing these goals. Setting goals is a key part of any manager's job. Through goal setting, you define business outcomes that you and your team will accomplish collectively and individually. Managed effectively, the goal-setting process creates a longterm vision that motivates you and your employees to reach even the most challenging objectives. Setting business goals provides your business with a structured framework. It is a skill that assists the company to understand whether the firm is successful or not. A business is likely to meet failure without clearly constructed business goals. Well-defined business goals provide a detailed guideline to everyone involved with the company. Acknowledgement & basis of the theories The Importance of Setting Business Goals Effective goal-setting strategies can provide an organization and its employees with objectives that unite them, drive them and keep them on track. In most businesses, the efforts of employees must be coordinated. Shared goals can help keep multiple projects on the same track. Goal-setting strategies also can push employees to perform at their highest ability if objectives that challenge but don’t overwhelm are set. They also can help to ensure that work is completed within specific time frames, which helps the organization meet

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deadlines, take advantage of market opportunities and provide effective customer service. - The importance of motivation and goal setting in business cannot be overstated. The setting of goals is important to guide the company and employees toward defined objectives. Motivation is important because it is the psychological catalyst employees and owners require reaching the goal. Without goal setting and the necessary motivation for goal attainment, businesses are without purpose or direction. - Business goal setting is important because it turns aspirations into tangible objects which require commitment and action. Used for measuring performance, increasing revenue and meeting business challenges, goals ideally include specific guidelines, details and outline resources necessary for attainment. The act and practice of goal setting allows the business and its employees to gauge the direction the business wishes to go, and can give credence to established business models, mission statements and overall objectives. Theoretical background According to Barney and Griffin, organizational goals serve four basic functions; they provide guidance and direction, facilitate planning, motivate and inspire employees, and help organizations evaluate and control performance. The theory of goal setting has been used in management since the early 1800s. Not until the early 1900s, however, were the first extensive studies conducted about the effects of goal setting on employee motivation and performance. Napoleon Hill's groundbreaking research served as the basis for multiple influential books, including "Think and Grow Rich" and "The Laws of Success." Goal-setting theory in management gained more momentum in the 1960s with Edwin A. Locke's research and publications. Locke focused his research on motivating employees through setting "S.M.A.R.T." goals and providing helpful feedback. Goal setting is a way of motivating people. In an article in the Graziado Business Report, motivation expert Charles Kearns, PhD, discusses findings by psychologist Dr. Edwin Locke in which Locke found that employees were motivated to improve performance by having clear goals and appropriate feedback. Having goals keeps people focused and provides the assurance that everyone is working towards a common future. Goals are also motivational, as working towards a goal can give everyone in an organization a sense of purpose and help to energize them. III. Analysis Goal setting is as psychologically important in business as it is in personal life. By setting goals, business managers are more in control of outcomes and the processes used to achieve those outcomes. Because goal setting involves planning for the

future, managers and employees with clear goals become motivationally oriented towards the longer term success of the business. How to set a business goal effectively Goal setting involves five pre-requisites that determine their effectiveness: - Specific - Goals should be specific and not use vague terms. They should be clearly understood and interpreted. The mode of action that needs to be approached should be evident from the goals. - Measurable - Goals should always be measurable. You should be able to track and measure the performance in achieving these goals. - Attainable - The goals should be within the reach of your company and should be achievable. They should also be realistic. It makes sense to start off with smaller targets and then work on improving them - Relevant - The objectives and goals should be relevant to the functioning and nature of work carried out by the company. You cannot have goals that do not complement the nature of your business. - Timely - Goals should have a fixed time-frame for your goals. This prevents any sort of lethargy and provides an internal deadline to the entire organization. Time bound goals will also keep you motivated. - Business goals are crucial to the success of any company, and they must be clearly constructed before a business opens its doors.

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