September 2018
Intermediate to advanced
392 pages
10h 16m
English
Example
The organizational data of a global entertainment company show that the annual profit over 2015 was US $986 million. This number was calculated by subtracting the annual costs from the total sales. Both sales and costs were measured quite reliably. Sales and costs, however, are highly correlated. Thus, although little measurement error exists in the sales and costs data, there may be a large measurement error in the profit metric. As a result, the reported profit could be substantially lower (or higher) than the actual profit.8
You should always be aware of measurement error in using organizational evidence. Error can seriously distort ...
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