Module I Nature and scope of Research Methodology; Problem Formulation and Statement of Research Objectives; Values and Cost of Information

Research- what comes to your mind? A lab with scientists at work with Bunsen burners and test

tubes? An Einstien-like character writing dissertations on some complex subject? Someone collecting data to study the impact of revised pay package on employee motivation? All these are different aspects of research Re-search means to search again

So, it is simply the process of finding solutions to a

problem after a thorough study and analysis of the situational factors

When do we say, Yes, a good decision? When managers identify where exactly the problem

lies When they correctly recognise the relevant factors in the situation needing investigation When they know what types of information are to be gathered and how When they know how to make use of information so collected and draw appropriate conclusions to make the right decisions When they know how to implement the results of this process to solve the problem

So, what is business research? A systematic, organised, data-based, critical, objective

scientific enquiry or investigation into a specific problem undertaken with the purpose of finding answers or solutions

to it

It is the systematic and objective process of gathering,

recording and analysing data for making business decisions Data can be first-hand data or already available data Data can be quantitative or qualitative We do business research to solve issues in the areas of accounting, finance, management and marketing

Some commonly researched areas in business Employee behaviours- performance, absenteeism etc. Employee attitudes- satisfaction, loyalty, commitment Brand loyalty, PLC and product innovation

Consumer complaints and redressal mechanisms JIT systems, production efficiencies etc. Cost of capital, valuation of firms, dividend policies

and investment decisions Development of effective cost accounting procedures Installation of effective MIS

Types of researchI. Descriptive vs. analytical Descriptive research includes surveys and fact-finding

enquiries of different kinds Also known as ex post facto research- the researcher has no control over the variables- he can only report what has happened or what is happening Eg: frequency of shopping, preferences of people etc.

Analytical research The researcher has to use facts or information already

available and analyse these to make a critical evaluation of the data

II.Applied vs. fundamental research Applied R: aims at finding a solution for an immediate

problem facing a business Fundamental/ Basic/ Pure R: concerned with

generalisations, expanding knowl and with the formulation of a theory

III. Quantitative vs. qualitative Quantitative R- based on the measurement of quantity

or amount Qualitative R- concerned with phenomena Eg: investigating the reasons for human behaviour-

why people do certain things Or motivation research-discovering the underlying

motives and desires, using in-depth interviews

IV. Conceptual vs. empirical Conceptual R- related to some abstract ideas or theory Used by thinkers to develop new concepts or to

reinterpret existing ones Empirical R- based on data and coming up with

conclusions- depends on experience or observation alone

V. One-time research vs. longitudinal Research One-time R- research is confined to a single time-

period Longitudinal R- the research is carried on over several time-periods Clinical or diagnostic R- the researcher goes deep into

the causes of things or events using small samples and in-depth studies

VI. Field setting research vs. laboratory R Depending upon the environment in which it is to be

carried out Data collected from the field or market Data obtained from experiments in the lab Historical R- uses historical sources like documents to

study events or ideas of the past

VII. Case studies In-depth, contextual analyses of similar situations in other

organisations,

where the nature and definition of the problem happen to be

the same as experienced in the current situation

Determine and define the research questions Select the cases and determine data gathering and analysis techniques 3. Prepare to collect the data 4. Collect data in the field 5. Evaluate and analyze the data 6. Prepare the report1. 2.

VIII. Action Research

Undertaken by consultants who want to initiate change process in organisations Most appropriate while effecting planned changes Researcher begins with a problem that is already

identified Gathers relevant data to provide a tentative problem solution Solution is then implemented Effects are then evaluated, defined and diagnosed The research continues on an ongoing basis until the problem is fully resolved

Eg: Seeking a solution to the problem of employee resistance while trying to introduce a change in the department/orgn.

Research methods and research methodology- are they different? Yes Research methods are all those methods/techniques

that are used for conducting the research Eg: methods for data collection, statistical techniques Research methodology is a way to systematically solve the research problem

Research methodology Methodology is the system of methods followed RM is the way we conduct our research RM may be defined as the procedures used in making

systematic observations or otherwise obtaining data, evidence, or information as part of a research project or study In RM, we study the various steps that are generally adopted by a researcher in studying his research problem along with the logic behind them It is necessary for the researcher to know not only the research methods/techniques but also the methodology

Nature and scope of RM

Increasing competition and business risk A tool for decision making rather than just data collection Related to marketing, HR, finance and manufacturing It is the basis for many of the important decisions When we talk of RM, we discuss: why a research study has been undertaken, how the research problem has been defined, in what way and why the hypothesis has been formulated,

what data have been collected and what particular method

has been adopted, why particular technique of analysing data has been used etc.

Scope A business researcher conducting research in an

organisation is called a: Marketing researcher Organizational researcher Director of financial and economic research

Scientific Research Process Planning: Problem identification to sampling

procedure selection Execution: Collection and evaluation of data Report Preparation

SCIENTIFIC RESEARCH PROCESS

Steps in Research ProcessFind and formulate the problem or opportunity Step 1: Broad Problem area: The entire situation where one sees a possible need for research and problem solving A problem currently existing that needs to be solved A situation requiring improvement Some research questions that the researcher wants to answer empirically

Examples of broad problem area Sales volume of product A is not picking up Inventory control is not effective Training programs are not effective as anticipated

The daily balancing of accounting ledgers is becoming

a continuing concern The recent merger is not showing the expected results

How much of the problem is visible?

Step 2: How do we narrow down from the broad problem area? Narrowing down to specific issues for investigation Collect preliminary data through: Interviews

Structured Unstructured

Literature research

What is the nature of information needed by the researcher? Background information of the organisation- the

contextual factors Managerial philosophy, company policies and other structural aspects Perceptions, attitudes and behavioural responses of organisational members

Background information Origin and history of the company- when it came into

being, business it is in, rate of growth, ownership and control Size in terms of employees and assets Purpose Location Resources External environment Financial position

Structural factors and management philosophyManagement philosophy Product quality Short and long-term goals Playing safe vs. calculated

Structural factors Roles and positions Number of employees at each

risks People-oriented vs. profitsoriented

job level Communication channels Span of control Reward systems

Perceptions, attitudes and behavioural responses Nature of work Superiors Participation in decision making

Co-workers Opportunities for advancement

Literature survey The documentation of a comprehensive review of the published and unpublished work from secondary sources of data in the areas of specific interest to the researcher Library is a rich storage Books Journals Newspapers Magazines Conference proceedings Doctoral dissertations Masters course theses Government publications Financial/ marketing reports

Why should we do literature survey?Literature survey ensures: Important variables that are likely to influence the problem are not left out A clearer idea emerges- which are the most important variables in the study? Helps the development of a theoretical framework and hypotheses Clear and precise problem statement Saves time of trying to rediscover something that is already known

Conducting the literature surveythree steps Identifying the relevant sources Computerised data bases: bibliographies, abstracts and full texts of articles Databases for statistics, trade/industry directories Extracting the relevant information Glancing through the titles of articles or books helps to decide which are pertinent and which are not Go through the problem, design and findings Writing up the literature review Documentation of the relevant studies citing the author and the year of the study is called lit. review or lit. survey (contd..)

A good literature survey leads logically to a good problem statement (contd..) Identify and highlight the important variables document the significant findings from earlier research this will serve as the foundation on which the theoretical

framework of the current study can be built and hypotheses developed Documentation is important to convince the reader that: The researcher is knowledgeable about the problem area and

has done the preliminary homework that is necessary to conduct the research The theoretical framework will be structured on work already done and will add to the solid foundation of existing knowledge

Step 3. Problem definition or problem statement Narrow down the problem from its original broad base and

define the issues of concern more clearly A clear, precise and brief statement of the question or issue that is to be investigated with the goal of finding an answer or solution It could pertain to: Existing business problems where a manager is looking for a

solution Situations that may not pose any current problems but which the manager feels have scope for improvement Areas where some conceptual clarity is needed for better theory building Situations in which a researcher is trying to answer a research question empirically because of interest in the topic

Steps in problem definition1. 2. 3. 4.

Ascertain the decision makers objectives Understand the background of the problem Isolate and identify the problem rather that its symptoms Determine the unit of analysis:Whether data is to be collected about the entire organisation, departments, work groups, individuals or objects

5. Determine the relevant variables Anything that may assume different numerical or categorical values Categorical variable: Any variable that has a limited number of distinct values eg: sex - F/M Continuous variable: Any variable that has an infinite number of possible values eg: sales volume 6. State the research questions and research objectives

A research question is the researchers translation of

the business problem into a specific need for inquiry It makes it easier to understand what is confusing the managers and indicates the issues to be resolved Eg: of a research on comfort foods: Comfort foods are those foods that provide comfort under different situations in peoples lives RQ1: What foods are considered to be comfort foods?

H1: Potato chips are considered comfort food. H2: Ice cream is considered comfort food.

RQ2: When do people eat comfort foods? H3: People eat comfort foods when they are in a good

mood. H4: People eat comfort foods when they are in a bad mood. RQ3: How do people become attached to comfort foods? H5: People are attached to comfort foods that are

consistent with their personality. H6: People are attached to comfort foods because of past associations.

Research objectives Researchers version of the business problem It is the purpose of research Expressed in measurable terms What researcher should accomplish Derived from the problem definition after have stated

the research questions and hypotheses Should specify the information needed to make a decision The number of RO should be limited to a manageable quantity

Business problem translated into Research ObjectivesProblem/ Questions Research questions Are the authorities aware of placement services? Should the institute offer placement services for UG students? How concerned are they about placement services? Research objectives To determine authorities awareness To measure their satisfaction with student performance To rate the different corporates to be invited to the campus

Examples of well-defined problems Has the new packaging affected the sales of the

product? Has the new advertising message resulted in enhanced recall? Does the expansion of international operations result in an enhancement of the firms image and value? What are the effects of downsizing on the long-range growth patterns of companies?

Exercise 1 Below is the gist of an article from Business Week.

After reading it, a) Identify the broad problem area b) Define the problem c) Explain how you would proceed further While Chryslers minivans, pickups and sport utility vehicles take a big share of the truck market, its cars trail behind those of GM, Ford, Honda and Toyota. Quality problems include, among other things, water leaks and defective parts.

Step 4: Theoretical Framework A conceptual model of how one theorizes or makes logical

sense of the relationships among the several factors that have been identified as important to the problem Theoretical framework offers the conceptual foundation to proceed with the research It also identifies the network of relationships among the variables considered important to the study of any given problem situation

Anything that can take on differing or varying values

Values can differ at various times for the same object or

person, or at the same time, different objects or persons Eg: sales, advertisement, motivation, absenteeism

Types of variables Dependent variable DV (criterion variable): variable of

primary interest to the researcher Eg: the impact of advertisement on sales Independent variable IV (predictor variable): one that influences the DV in either a +ve or ve way Eg: the impact of advertisement on sales Moderating variable: one that has a strong contingent effect on the IV-DV relationship; a 3rd variable that modifies the relationship b/w IV and DV Intervening variable: one that surfaces b/w the time IV starts operating to influence the DV and the time their impact is felt on it. Helps to conceptualise the relation b/w IV and DV Eg: effects of televisions advertising on childrens consumption behavior- cognition comes into the way and might totally change the DV. Here, the moderating variable would be parental influence and peer pressure as they both would increase or decrease the DV

IV ---> DV cause ---> effect IV ----> mediating variable ----> DV

Eg: girls are more likely than boys to become secretaries, the IV is gender and the DV is type of career, as below: Gender ----> Type of Career Eg: girls are more likely to be socialized into "feminine" careers (while boys are socialized into more "masculine" careers) and that makes them more likely to become secretaries, the IV is gender, the mediating variable is type of socialization, and the DV is type of career. Gender ----> Level of Socialization ---> Type of Career

Step 5: Generation of Hypothesis A preliminary or tentative explanation or postulate by the

researcher of what the researcher considers the outcome of an investigation will be. A statement based on some presumptions about the existence of a relationship between 2 or more variables that can be tested through empirical data Makes the research question clearer to the researcher An informed/educated guess Guides the direction of the study Identifies the facts that are relevant and those that are not Suggests which is the most appropriate research design Provides a framework for organizing the conclusions of the study.

Hypothesis So it can be defined as A logically conjectured relationship between two or more variables expressed in the form of a testable statement Conjectured Relationship: formed on the basis of the

network of associations established in the theoretical framework Hypothesis development: formulating such testable statements Gives probable answers to research questions Eg: salespersons who show the highest job satisfaction will be the most productive There is a positive relationship between internet shopping and presence of infants at home

Formats of hypotheses If-then statements Directional And Nondirectional hypotheses Null and alternate hypotheses

Research proposal A written statement of the research design that includes a statement The RP must be original and should have a length of about 1000-1500 words. The proposal should essentially contain the following sections: Project title Executive summary Background of the study Relevant literature Statement of key research questions Research objectives Research hypotheses if any Statement of proposed benefits of the study Research design Sampling design Data collection Analytical tools and techniques Time schedule of the work Budget Requirements of special resources Researcher credentials Project administration Bibliography Appendices

explaining the purpose of the study and a detailed, systematic outline of a particular research methodology

Values and cost of information To run a business, we need data which is: Timely Useful Accurate Reliable and Valid Data is in the raw form When it is evaluated, analysed and synthesised, it

becomes useful information to managers It helps them make good business decisions

Why gather data? To assess market trends To assess competitive practices To assess new products

To review effectiveness of internal policies and

procedures To assess their own product performance To gather information related to accounting, administration, budget, finance, sales, marketing, human resources accounting, employee surveys etc.

Sources of information The Internet Electronic mail or e-mail

the Intranet Browsers like MS explorer or Netscape Web sites Some softwares used in business research: CAM/CAD ERP

Importance of research in managerial decision making Decision making: the process of resolving a problem or

choosing among alternative opportunities Keys to decision making: Recognising the nature of the problem/opportunity Identifying how much information is available Determining what information is needed

Every business problem or decision-making situation

can be classified on a continuum ranging from

Complete certainty to Absolute ambiguity

According to decision theory framework, there are 3

levels of uncertainty:

Certainty Uncertainty Ambiguity / risk

Research reduces risk by reducing uncertainty

Decisions are not all the same: a continuum of decision making

COMPLETELY CERTAIN

Uncertainty

ABSOLUTE AMBIGUITY

Certainty Decision maker has all the information that he or she

needs He knows the exact nature of the business problem/opportunity Eg: an airline needs to know the demographic characteristics of its pilots A situation of perfect certainty is very rare and does not demand the scope for research

Uncertainty Managers grasp the general nature of the objectives

they wish to achieve, but the information about alternatives is incomplete Predictions about the forces that will shape future events are educated guesses. They spend additional time gathering information to clarify the nature of the decision

Factors influencing uncertainty inmanagement decisionsInternal Knowledge Skills Human resources Funds External Competition Market growth Unfamiliarity with the market Government policies

Examples of queries during uncertaintyEstablished products: Has the recent advt campaign for my brand of hair oil had any impact on consumer awareness of the brand? New products : Should we extend our brand of suitings, currently positioned as premium office wear for the male executive, as Western office wear for the female executive as well?

Ambiguity The most difficult decision situation The nature of the problem to be solved is unclear The objectives are vague and the alternatives are

difficult to define

References: Uma Sekharan- Business research methods William G. Zikmund- Business research methods Naresh Malhotra- Marketing research Cooper and Schindler- Business Research Methods