tautology

Posted on | September 27, 2008 | 2 Comments

what ever who-so-ever may say,i will never agree with the statement that a metric/performance measure can be driver.a performance driver drives a growth in the performance,while a metric measures it.so if a metric could be a driver, or a driver a metric, then a performance measure would drive the performance, and then the same measure would measure it;which is perfect circular logic.

another type of analysis i hate is one in which people arrive at conclusions based on interactions between dependent variables only.these arguments may be all right for deciding upon trade offs, but can/should never be applied to state definitive conclusions.for instance, if we say that this product sales less and discounts we have to give on this product are less/profit margins are more, we can may be define a trade off on the levels of inventory to be kept for that product, by studying the interactions between these variables; but since levels of sales might be dependent on the discounts we offer (and conversely,the level of discounts we are willing to offer may be dependent on the sales volume we achieve), the trade-off, and only the trade-off is something we should base on this decision, and that too after much analysis, because we dont have any independent variables/drivers predicting the behaviour of these factors.a for instance might be seasonality,which is an independent variable.so in diwali time,sales of a particular product might go up,and we would do fine without discounting,may be or may be we might drive up sales in off-season by offering discounts. but we can not comment on the basis of a single interaction between sales and discount levels on the causality of sales or discounts.that argument would be a farrago of logical fallacies the least of which is the assumption that something can be its own cause.

unfortunately, in b-schools,we are very prone to this.

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