A major difficulty in selecting performance targets for a firm is that performance goals tend to be long term,but effective monitoring must be short term.

Question

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Performance targets often involve achieving a certain level of success over a longer period of time, such as increasing revenue by 10% over the next 5 years. However, effective monitoring and evaluation of progress towards these targets needs to be done on a more regular basis, such as monthly or quarterly reviews. This can create a mismatch between the long-term goals and the short-term monitoring, making it difficult to select appropriate performance targets.

A Major Difficulty in Selecting Performance Targets for a Firm