Types of indicators
| Types of indicators |
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The indicator confirms or denies the presence of the concept under examination.
The indicator is an observation that reflects the variable we study. It is often described as events, incidents, facts, states of events, phenomena and given processes. It is very easy to observe and whose very existence or emergence is the cause that in certain events with certainty or such with a given probability, a definite mistake or property occurred.
By examining the data of the indicators, most easily correspond to easily accessible events or behaviors, states of things and phenomena[1].
The indicator has the ceche indicated, so it must be observable, but it does not have to be noticeable the event that causes it. One more condition must be met by the indicator, namely the overlap between the property indicated by this index and the property set by the indicator.
Such a relationship, that occurs between the indicated property and the indicator, we are able to distinguish due to:
- contractual character - based mainly on the meaning of the term, means the relationship between the indicated property and the indicator. In summary, defining the concept that determines the property indicated is based to a large extent on the selection of the indicator for a given phenomenon.
- material character - both the indicator and the property indicated are observable, because the correlation between the indicated property and the indicator can be subjected to empirical experiments, i.e. it can be controlled.
Types of indicators
Various types of indicators is used in management in decision making processes. There are:
- Definitional indicators- the relationship between the indicator and the indicator is conventional. The meaning range of the indicator coincides with the semantic scope of the indicated phenomenon or concept. Therefore, the choice of the indicator consists only in an attempt to define the situation being examined, indicating the indicated property. The definition indicator, in contrast to inferential indicators as well as empirical indicators, is based on terminology. This indicator shows to us to a large extent the contractual character which has a connection between the index and the aindicatum. The meaning range of the indicated concept or phenomenon largely depends on the meaning range of the indicator. In applying, choosing the appropriate indicator, specifying the indicated value, we rely mainly on the attempt of a specific situation which is examined[2].
- Empirical indicators - the indicator and the indicated characteristics are observable. There is a statistical or non-unique, universal or historical empirical relationship between the pointer and the indicator. This relationship can be easily seen at the time of observation. On the path of observation is the possibility of resolving the application, where there is an empirical relationship between the inicatum and the empirical indicator. The empirical index is much more reliable and more objective, despite the fact that both empirical and indicatum indicators are observable.
- Inferential indicators - in the case of indication of a phenomenon or characteristic are difficult to define, and the unobservable relationship between the indicator and the indicator is indirectly justified by inference based on various symptoms, inference from the observed correlations and theoretical assumptions. The feature of this phenomenon is quite difficult to observe or recognize, so it allows you to draw conclusions. The index is not included in the definition of indicatum because it is an observable phenomenon. We can deduce this from the conclusions of the correlation that we observe.
- Physical indicators - the relations between the indicator and the indicatum are subject to empirical control.
Examples of indicators
Examples of indicators:
- Quality of life indicator,
- Indicator of social development,
- Inflation rate,
- Poverty indicator,
- Unemployment rate,
- Profitability ratio,
- Financial liquidity ratio,
- World price index,
- Performance indicators,
- Productivity indicators,
- Employment rates,
- Indicators of economic growth.
- etc.
Advantages of Types of indicators
The advantages of types of indicators include the ability to quickly and accurately measure the concept under examination. Indicators provide an objective measure of a concept, without being influenced by personal opinion or bias. They can provide a baseline for comparison to other similar concepts, as well as help to identify trends over time. In addition, indicators can help to identify correlations between concepts, provide an efficient way to summarize complex data, and help to identify areas for improvement. Furthermore, indicators can be used to benchmark performance against industry standards, and help to identify potential opportunities for improvement. Finally, indicators can help to facilitate the decision-making process by providing a clear and concise understanding of the concept under examination.
Limitations of Types of indicators
The indicator can be a useful tool for confirming or denying the presence of a concept, but it does have some limitations. These limitations include:
- Limited accuracy - Indicators may not be accurate in all cases, as they may not always detect the presence of a concept. This can lead to incorrect results and conclusions.
- Limited scope - Indicators may not be able to detect all aspects of a concept, as they are limited to specific parameters or criteria. This can lead to a lack of comprehensive understanding of the concept.
- Limited context - Indicators may not take into account the context in which the concept is being examined, which can lead to misinterpretations or oversimplifications.
- Limited reliability - Indicators may be unreliable due to the potential for changes in the data over time, or due to the potential for bias or errors in the data.
The indicator can confirm or deny the presence of the concept under examination, but there are other approaches related to types of indicators that can be used to measure a concept. These include:
- Frequency counts, which are used to measure the number of times a concept appears in a given context.
- Ratio analysis, which measures the proportion of one concept to another.
- Descriptive statistics, which summarize a concept or set of data.
- Correlation analysis, which measures the relationship between two or more concepts.
- Regression analysis, which is used to determine the relationship between one or more independent variables and a dependent variable.
These approaches can provide further information on the concept under examination, beyond the binary confirmation or denial of its presence. In summary, indicators can confirm or deny the presence of a concept, but there are other approaches related to types of indicators that can be used to measure it.
References
- Roca, L. C., & Searcy, C. (2012). An analysis of indicators disclosed in corporate sustainability reports. Journal of Cleaner Production, 20(1), 103-118.
- Roos, G., & Roos, J. (1997). Measuring your company's intellectual performance. Long range planning, 30(3), 413-426.
- Smeets E., & Weterings R.,(1999). Typology and overviewEnvironmental indicators
Footnotes
Author: Magdalena Worłowska
