Management researchers in most cases consider performance as dependent variable. However they do not explain whether they consider it as a stock variable (measured at one specific time) or flow variable (measured over an interval of time). E.g. In brand management studies some prefer to equate brand equity with brand performance. To my knowledge brand equity is a stock variable while brand performance is a flow variable. Thus equating them brings ambiguity in brand research. How we can resolve this ambiguity?
I agree with your statement, "brand equity is a stock variable while brand performance is a flow variable". We can resolve this ambiguity with make a clear operational definition for each variable. I think, we must place both variables in the same level of time. If we can not brings both variables in the same level of time, that is mean we brings an ambiguity.
@Yohanes. Thanks for your reply. I think we can not place both variables at the same level of time. Because they are different. However most writers don't care and use them interchangeably.
@Babak. thanks for your answer. but as i mentioned a stock variable is measured at one specific time, say t0. flow variables are measured over time, say between t0 and t1 regardless of the duration of time. I mean it doesn't make difference whether the variable is measured over short or long duration of time. in both cases it is still a flow variable. I used branding concepts as an example but other examples in management literature are available.
Dear Jalal,
Performance is a flow variation and it is measured in a determined period of time, but it is true whether it is capable to increase the stock of strategic resources (brand equity) according to some performance drivers. An example: for assessing the brand equity are more relevant performance drivers like sales and consumers' loyalty, not the expenses for advertisements; then the first two variable will be flows, not the third one.
For further analysis about the performance concept, read the paper: Carmine Bianchi, Enhancing performance management and sustainable organizational growth through system-dynamics modeling.
I think the unit of measurement in specific instance will determine what is or what is flow. In most cases performance is usually measured as a function of time, which makes it a classical example of flow variable. Whereas Band equity as mentioned by Pietro can be conveniently classified as a strategic assest; its level; appreciate or declines thus it is a stock variable.
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