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Learning objectives
When you have read this chapter, you should understand: 1 what research is, and the different types of research available 2 the difference between good and poor or unprofessional research 3 that research is embedded in different research philosophies and their basic principles, assumptions and implications 4 how to formulate a solid research hypothesis.
snapshot
availability of company publications via desktop and electronic publishing, have heralded the presence of extensive new arrays of information. Its quality, however, is not always impeccable. Workers, shareholders, customers and the general public are demanding to be included in company decision-making; they are better informed and more sensitive to their own interests than ever before. To succeed in such an environment, we need to know how to identify high-quality information and how to recognize the solid, reliable research on which high-risk decisions can be based. Luckily, while the decision-making environment has become more complicated, business research tools have at the same time become more sophisticated and improvements in information technology have served to streamline the research process. Each of the factors listed below demonstrates how recent developments have affected the business research process.
Organizations are increasingly practising data-mining learning to extract meaningful
required for data warehousing electronic storehouses where vast arrays of collected, integrated data are kept, ready for mining. The power and user-friendliness of todays computers means that data may easily be analysed and used to deal with complex managerial problems. Quantitative analysis techniques take advantage of increasingly powerful computing capabilities. The communication and measurement techniques used in research have been enhanced. As a researcher, you will need to know how to conduct such research. If you are to develop the skills required in this area, you will need to understand the scientific method as it applies to the managerial decision-making environment. Thats why this book addresses your needs as an information processor. Throughout the text we give a slight emphasis to the perspective of an academic researcher or student, as we believe that most users of the text currently belong to these two groups. However, business decisions and research are also often conducted, or at least requested, by managers. By and large, academic researchers, students and managers encounter the same methodological problems while conducting business or management research, although the former often emphasize aspects other than the latter. As many of our users are currently students who will become managers in the near future, we will also address issues that pertain to research in a commercial rather than an academic setting.
Air Swiss
You work for Air Swiss, an aviation company that is searching for new international partners. The senior vice president for development asks you to head a task force to investigate six companies that are potential candidates. You assemble a team composed of representatives from the relevant functional areas. Pertinent data are collected from public sources because of the sensitive nature of the project. You examine all of the following: company annual reports; articles in business journals, trade magazines and newspapers; financial analysts assessments; and company advertisements. Your team members then develop summary profiles of the candidate firms based on the characteristics gleaned from these sources. The final report highlights the opportunities and problems that acquisition of the target firm would bring to all areas of the business.
Akademiska Sjukhuset
You are the commercial manager of Akademiska Sjukhuset, a major academic hospital in Sweden. A prominent manufacturer of medical equipment has contacted you to ask whether you would be willing to purchase a new-generation MRI scanner, which uses magnetism, radio waves and a computer to produce images of body structure. The doctors committee at the hospital, to which you will need to make a recommendation, will have to decide on this question. If they choose to purchase the new scanner, they will also agree to test new applications for it and report back to the manufacturer on their experiences. In exchange for this they will get access to the latest technology at a significantly reduced price, and become a member of the manufacturers network of preferred hospital partners. You begin your investigation by mining data from patient files to learn how your current MRI scanner is used and what kind of diagnoses it can be used for. You then consult other Swedish hospitals to find out how well equipped they are with MRI technology, and how many patients might, potentially, be treated in your hospital if you invest in the technology. You attempt to confirm your data with information from professional and association journals. Based on this information, you develop a profile that details the number of patients that could be treated, and the overheads and potential revenue that would be realized as a result of purchasing the new scanner.
ColorSplash
ColorSplash, a paint manufacturer, is having trouble maintaining profits. The owner believes inventory management is a weak area of the companys operations. In this industry, the many paint colours, types of paint and container sizes make it easy for a firm to accumulate large inventories and still be unable to fulfil customer orders. The owner asks you to make some recommendations. You look into the companys present warehousing and shipping operations, and find excessive sales losses and delivery delays because of out-of-stock conditions. An informal poll of customers confirms your impression.
York College
You work for York Colleges alumni association. It is eager to develop closer ties with its ageing alumni in order to encourage increased donation levels and to persuade older, non-traditional students to return to education and thus supplement enrolment numbers. The presidents office is considering the construction of a retirement community that is geared towards university alumni and asks your firm to assess the attractiveness of the proposal from an alumni viewpoint. Your director asks you to divide the study into four parts, as follows. PHASE 1 First, you are to report on the number of alumni in the appropriate age bracket, the rate of new entries per year and the actuarial statistics for the group. This information will allow your director to assess whether the project is worth pursuing. PHASE 2 Your early results reveal that there are sufficient alumni to make the project feasible. The next step in the study is to describe the social and economic characteristics of the target alumni group. You review gift statistics, analyse job titles, and assess home locations and values. In addition, you review files from the last five years to see how alumni responded when they were asked about their income bracket. When you have finished, you are able to describe the alumni group for your director. PHASE 3 It is evident that the target alumni can easily afford to join a retirement community as proposed. The third phase of the study is to explain the characteristics of the alumni who would be interested in a university-related retirement community. For this phase, you engage the National Pensioners Convention (NPC) and a retirement community developer. In addition, you search for information on senior citizens from federal government sources. From the developer you learn what characteristics of retirement community planning and construction are most attractive to retirees. From the NPC you learn about the main services and features that potential retirees look for in a retirement community. From government publications you become familiar with existing regulations and recommendations for operating retirement communities, and uncover a full range of descriptive information on the typical retirement community dweller. You make an extensive report to both the alumni director and the university president. It covers the number of eligible alumni, their social and economic standing, and the characteristics of those who would be attracted by the retirement community. PHASE 4 The report excites the college president. She asks for one additional phase to be completed. She needs to predict the number of alumni who would be attracted to the project so that she can adequately plan the size of the community. At this point, you call on the college
president, or possibly the board of directors, about which is the preferred international partner with which to join forces. In the Akademiska Sjukhuset case, the doctors in the group must decide whether to purchase the new-generation MRI scanner. In the ColorSplash case, the owner of the paint manufacturer must decide whether to implement a new inventory management system. At York College, the president must propose to the board of directors whether to fund the development of a retirement community. How did you do? If you didnt come to the same conclusions, re-read the cases before proceeding, to find out what you missed. Make sure you have a strong grasp of the process before you read on. In real life, management dilemmas are not always so clearly defined. In the ColorSplash case, rather than pinpointing the problem as a simple one of inventory management, the paint manufacturers owner could have faced several, possibly intertwining, problems:
a strike by employees that had an adverse effect on inventory delivery to retail and wholesale
customers
the development of a new paint formula that offers superior coverage but requires a
As the research process begins with the managers decision-making task, it is of paramount importance to have an accurate definition of the dilemma; this, however, can often prove difficult. We will address this issue in Chapter 2.
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Conflicting conclusions
On 21 May 2001, a century-long industrial relationship was severed when Bridgestone/ Firestone, Inc. announced that it would stop selling tyres to Ford. Firestone CEO John Lampe said that any relationship needed to be built on trust and mutual respect, and that Fords anticipated replacement of 13 million tyres without just cause from Firestones point of view showed an obvious lack of trust. These two automobile industry giants, although party to the same crash data, came to very different conclusions. Firestone claimed its tyres failed at a higher than normal rate only when installed on Ford Explorers. Ford claimed that crashes involving Explorers were far more likely with Firestone tyres. Firestones Lampe stated, Our analysis suggests that there is a significant safety concern with a substantial segment of Ford Explorers. He added that Ford steadfastly refused to acknowledge those concerns. Were the National Highway Traffic Safety Administration (NHTSA) data incorrect? Did the companies examine significantly different insurance data? Were the conflicting conclusions incorrect? The answer to each of these questions is no. Business research is conducted to enable decision-makers to make better decisions. Both companies needed to make decisions that would protect their brand equity and offer a buffer against wrongful death and injury lawsuits. Many believe that Firestone is fighting for its very survival; Fords situation is far less severe. While, initially, GM reaffirmed its relationship with the tyre company (even naming Firestone its 2001 Supplier of the Year) and Nissan Motor expects to continue its relationship with Firestone, if they or other automotive companies choose to follow Fords lead, Firestone could crumble under the effects of such a divorce.
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snapshot
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In applied research, the researcher distinguishes Chapter 2 between symptom of organizations problem, the managers perception of the problem and the research problem; in pure research, it is also wise to clearly separate the research dilemma addressed and the research problem actually investigated Researcher provides complete research proposal Exploratory procedures are outlined with constructs defined Sample unit is clearly described, along with sampling methodology Data collection procedures are selected and designed Chapter 2 Chapters 2, 610
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Characteristics of research
4 High ethical Safeguards are in place to protect study standards applied participants, organizations, clients and researchers Recommendations do not exceed the scope of the study The studys methodology and limitations sections reflect researcher restraint and concern for accuracy 5 Limitations frankly revealed Desired procedure is compared with actual procedure in report Desired sample is compared with actual sample in report Impact on findings and conclusions is detailed 6 Adequate analysis Sufficiently detailed findings are tied to collection for decisioninstruments makers needs 7 Findings presented unambiguously Findings are clearly presented in words, tables and graphs
Chapters 6, 13
Chapters 1418
Chapters 1318
Findings are logically organized to facilitate reaching a decision about the managers problems Executive summary of conclusions is outlined Detailed table of contents is tied to the conclusions and findings presentation 8 Conclusions justified 9 Researchers experience reflected Decision-based conclusions are matched with detailed findings Researcher provides experience/credentials with report Chapters 1318
Chapter 13
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snapshot
Research philosophies
We introduced the importance of thinking about what research is in a rather pragmatic way. However, how research should be conducted is embedded in the broader philosophies of science. Research is based on reasoning (theory) and observations (data or information). How observations and reasoning are related to each other is a still ongoing and old philosophical debate on the development of knowledge. Although many researchers conduct sound research without a thought for underlying philosophical considerations, some knowledge of research philosophies is beneficial for you as a researcher as it helps to clarify the research design and facilitates the choice of an appropriate one. Furthermore, understanding the basic assumptions of research philosophies can enable researchers to reach designs beyond their past experience.7 In the following, we provide an overview of the two most distinguished research philosophies, positivism and interpretivism (also called phenomonology). Between these two positions various other research philosophies exist, relying on some principles of positivism or interpretivism, while relaxing others and incorporating principles of the opposing philosophy. The most notable of these is realism, which will be discussed later. Looking at the often fierce debates between positivists and interpretivists, one might get the impression that research is either conducted on planet positivarium or on planet interpretivarium, and research has to be embedded in one philosophy. Using the survey methodology seems to imply a deductive approach rooted in positivism, and an ethnographic observational study using inductive reasoning seems to follow interpretivism. By and large, such classifications are reasonable, but research practice shows that researchers rarely subscribe consistently to one philosophy and, in management research in particular, a more pragmatic view prevails.
Positivism
Positivism is a research philosophy adopted from the natural sciences. Its three basic principles are: 1 the social world exists externally and is viewed objectively 2 research is value-free 3 the researcher is independent, taking the role of an objective analyst.
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A scientist following this research tradition believes (assumes) that observable facts are objective, because they are external, i.e. we cannot influence them, and research is conducted value-free. This implies that different researchers observing a social phenomenon, such as the takeover battle between two firms, arrive at the same facts describing the social world. As a consequence, concepts need to be operationalized to allow a quantitative measurement of the facts. Further, the social world can be reduced to simple elements. Distilling its elements and reducing them to fundamental laws is the best way to investigate a phenomenon. This explains why studies following the positivism approach often single out one explanation in order to understand a phenomenon and deliberately neglect other aspects, which are often investigated in separate studies.
Interpretivism
Unlike positivists, interpretivists hold the view that the social world cannot be understood by applying research principles adopted from the natural sciences and propose that social sciences require a different research philosophy. The basic principles of interpretivism are:
the social world is constructed and is given meaning subjectively by people the researcher is part of what is observed research is driven by interests.
Interpretivists argue that simple fundamental laws are insufficient to understand the whole complexity of social phenomena. More important, however, they claim that an objective observation of the social world is impossible, as the social world has a meaning for human beings and is constructed by intentional behaviour and actions. Knowledge is developed and theory built through developing ideas inducted from the observed and interpreted social constructions. The researchers emphasis on making sense of what is happening sometimes even generates surprising findings beyond the current common scientific knowledge. Interprevists attempt to understand subjective realities and to offer interpretative explanations, which are meaningful for the participants of the research. The involvement of the researcher in the research is most apparent in action research (see Chapter 8), where the researchers engage in active collaboration with participants to address real-life problems in a specific context, and aim to offer and implement feasible solutions to the problem. Interprevitists also reject the notion that research is value-free. As researchers offer an interpretation of how people interpret the social world, the researchers interpretation is also socially constructed, reflecting their motives and beliefs. As Habermas stated, human interests not only channel our thinking, but also guide how we investigate the world (i.e. which questions we ask),
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Gathering and measuring facts will not disclose the essence of a social phenomenon, rather researchers need to explore why people have different experiences and to understand how these differences result in the different constructions and meanings people give to the social world. Interpretivists research social phenomena by making sense of how people interpret the social world. This requires the researcher to dig into the processes of subjective interpretation, acknowledging the specific motivations and interests of the participants. Compared to natural phenomena, social phenomena are characterized by a high complexity and are often unique, as they result from multiple circumstances constructed by many individuals. This means that interpretivism does not attach a great deal of importance to the generalizability of findings. The world, and especially the business world, is constantly changing and what seemed sensible three years ago may not hold at all now. Hence, in an ever changing world, generalization, even over short periods of time, becomes questionable.
Realism
Realism is a research philosophy sharing principles of positivism and interpretivism. Like positivism, its exponents believe that social sciences can rely on the research approach dominant in the natural sciences. More specifically, it accepts the existence of a reality independent of human beliefs and behaviour. However, it also concedes that understanding people and their behaviour requires acknowledgement of the subjectivity inherent to humans. In the realists view, there are social processes and forces beyond the control of humans, which affect our beliefs and behaviour. These processes and forces operate at the macro level. At the micro level (i.e. at the level of individual human beings), subjective individual interpretations of reality are important for a full understanding of what is happening. Still, most realists would accept that these subjective interpretations are not unique and that people share similar interpretations, partly because the external forces at the macro level influence everyone. Thus, research requires the identification of external factors describing general forces and processes influencing humans, as well as the investigation of how people interpret and give meaning to the setting they are situated in. Critical realism, a branch of realism, recognizes the existence of a gap between the researchers concept of reality and the true but unknown reality. This implies that research is not value-free, and is conducted within a broader framework based on our current knowledge and concept of reality.
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Positivism Basic principles View of the world The world is external and objective Researcher is independent
Interpretivism
The world is socially constructed and subjective Researcher is part of what is observed and sometimes even actively collaborates Research is driven by human interests
Involvement of researcher
Research is value-free
Subjective interpretations of meanings Taking a broad and total view of phenomena to detect explanations beyond the current knowledge
interpretivist is interested in subjective meanings and interpretations of phenomena to detect what is happening in a specific situation. As each observation is subjective he or she relies ideally on multiple sources and different methods to collect information on the phenomena. An example will serve to illustrate this. Assume company performance is an essential aspect of the phenomena investigated. A study following the positivistic philosophy will ideally use a set of quantitative indicators reflecting performance, such as profit, sales, market share, growth or a relative measure such as return on assets. Interpretivists might even use financial key indicators from annual reports, but they would put more emphasis on subjective assessments of performance by management and employees. These subjective assessments can result in a quite different picture of the performance than financial indicators suggest and can even provide hints as to why a firm is or is not doing well. A common study structure in the positivistic tradition is that researchers investigate a research problem by testing whether theoretically derived hypotheses hold for the situations investigated. If the objective facts support the hypothesis, the underlying fundamental laws are applicable and their validity is enforced. The value of the research usually increases with the generalizability of the findings, because a detected relationship, which cannot be linked to other similar circumstances, does not qualify as a fundamental law. This calls for large sample sizes to ensure that the findings based on the sample investigated represent the whole population. Interpretivistic studies follow a different structure. They offer a thick and rich description of the investigated phenomena, which is interpreted to understand what is happening. As they claim that generalization is of minor importance, as discussed above, smaller sample sizes (often just one) are sufficient. A perfect research study would combine the positivistic emphasis on large sample sizes with the thick description of a interpretivistic study. However, a thick description and a large sample size is not feasible and, more importantly taking the arguments above, not necessary. Still this difference in emphasis points to a general prerequisite of good research, as thick description and sample size have a substitutive relation, as shown in Exhibit 1.3. Good research not only
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sample size 1 0 200 400 600 800 thickness of description 1000 2 4 8 16 32 64 128 256 512 1024 2048 4096 8192
exists in extreme forms, but is much more often an intelligent combination of the two. Good research operates on a line between the white and the light blue area: moving too much into the blue area is, even if feasible, not efficient. Using a research design far away from the optimal line and in the white area is not sufficient to gain insight into what is happening. If your study is based on just a few cases and the information you collected on each case does not exceed what is usually obtained in large-scale surveys, your research has nothing of interest to offer. In the next section we will discuss how you decide what position on the optimal line you wish to occupy.
A deduction is valid if it is impossible for the conclusion to be false if the premises are true. Logicians have established rules by which we can judge whether a deduction is valid. Conclusions are not logically justified if one or more premise are untrue or the argument form is invalid. A conclusion may still be a true statement, but for reasons other than those given. Consider, for example, the following simple deduction.
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promotional period.
A strike by the employees at the haulage firm used prevented stock from arriving in time for
during the promotion. This example illustrates the essential nature of inductive reasoning. The inductive conclusion is an inferential jump beyond the evidence presented that is, although one conclusion explains the fact that there was no sales increase, other conclusions can also explain this fact. It may even be the case that none of the conclusions we advanced correctly explains the failure of sales to increase. Lets look at another example. Consider the situation of Tracy Nelson, a salesperson at the Square Box Company. Tracy has one of the poorest sales records in the company. Her unsatisfactory performance prompts us to ask the question, Why is she performing so poorly? From our knowledge of Tracys sales practices, the nature of box selling and the state of the market, we might conclude (hypothesize) that her problem is that she makes too few sales calls per day to build a good sales record. Other hypotheses might also occur to us on the basis of available evidence. These hypotheses include the following.
Tracys territory does not have the market potential of other territories. Tracys sales-generating skills are so poorly developed that she is not able to close sales
effectively.
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Each of the above hypotheses is an induction we might base on the evidence of Tracys poor sales record, plus some assumptions or beliefs we hold about her and about the selling of boxes. All of them have some chance of being true, but we would probably have more confidence in some than in others. All require further confirmation before they gain our confidence. Confirmation comes with more evidence. The task of research is largely to:
determine the nature of the evidence needed to confirm or reject hypotheses, and design methods by which to discover and measure this other evidence.
COMBINING INDUCTION AND DEDUCTION Induction and deduction are used in research reasoning in a sequential manner. John Dewey describes this process as the double movement of reflective thought.11 Induction occurs when we observe a fact and ask, Why is this? In answer to this question, we advance a tentative explanation (hypothesis). The hypothesis is plausible if it explains the event or condition (fact) that prompted the question. Deduction is the process by which we test whether the hypothesis is capable of explaining the fact. 1 You promote a product but sales dont increase. (Fact 1) 2 You ask the question, Why didnt sales increase? (Induction) 3 You infer a conclusion (hypothesis) to answer the question: The promotion was poorly executed. (Hypothesis) 4 You use this hypothesis to conclude (deduce) that the sales will not increase during a poorly executed promotion. You know from experience that ineffective promotion will not increase sales. (Deduction 1) This process is illustrated in Exhibit 1.4. This example, an exercise in circular reasoning, indicates that one must be able to deduce the initiating fact from the hypothesis advanced to explain that fact. A second critical point is also illustrated in this exhibit: to test a hypothesis, one must be able to deduce from it other facts
Induction Fact 1: We promote a product but sales do not increase Deduction: Ineffective promotion will not increase sales
otio prom ctive : Effe ction ales Dedu ase s l incre wil n
Why?
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problem
deduces outcomes or consequences of the hypotheses attempts to discover what happens if
the results are (i) the opposite to those predicted or (ii) support the expectations
formulates several rival hypotheses EXHIBIT 1.5 WHY IS TRACY NELSONS PERFORMANCE SO POOR?
Induction Fact 1: Tracy has a poor performance record Fact 2: Tracy is regularly late to work Fact 3: Tracy makes fewer calls per day than the average salesperson Why?
in excessive tardiness
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hypotheses
feeds information back into the original problem, modifying it according to the strength of
the evidence. Eminent scientists who claim there is no such thing as the scientific method, or do not apply it overtly in their work, caution researchers about using template-type approaches. They are right to do so, and it should be added that the ideas presented in this book are highly interdependent, not sequentially fixed and may be expanded upon or eliminated according to the nature of the problem and the perspective from which it is viewed. Nevertheless, novice researchers should understand that research, when conducted scientifically, is most definitely a process. The research process that explores the relationship between reflective thought and scientific method is described in detail in Chapter 3.
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Concepts
To understand and communicate information about objects and events, there must be some common ground on which to do it. Concepts serve this purpose. A concept is a generally accepted collection of meanings or characteristics associated with certain events, objects, conditions, situations and behaviours. Classifying and categorizing objects or events that have common characteristics beyond any single observation create concepts. When you think of a spreadsheet or a warranty card, what comes to mind is not a single instance but collected memories of all spreadsheets and warranty cards abstracted to a set of specific and definable characteristics. We abstract such meanings from reality and use words as labels to designate them. For example, we see a man go by and acknowledge that he is running, walking, skipping, crawling or hopping. These movements all represent concepts. We have also abstracted certain visual elements by which we identify that the moving object is an adult male, rather than an adult female or a truck or a horse. We use a host of concepts in our everyday thinking, conversing and other activities. SOURCES OF CONCEPTS Concepts that are in frequent and general use have been developed over time through shared usage. We have acquired them through personal experience. If we lived in another society, we would hold many of the same concepts (though in a different language). Some concepts, however, are unique to a particular culture and are not readily translated into another language. Ordinary concepts make up the bulk of communication even in research, but we will often run into difficulties when trying to deal with an uncommon concept or a newly advanced idea. One way to handle this problem is to borrow from other languages or areas (for example, gestalt psychology) or from other fields (for example, impressionism, say, from art). The concept of gravitation, for instance, has been borrowed from physics and used in marketing in an attempt to explain why people shop where they do. The concept of distance is used in attitude measurement to describe the degree of variability between the attitudes of two or more people; the term threshold is used to describe a concept in perception studies; while velocity is a term borrowed by the economist from the physicist. Borrowing is not always practical, though, so we sometimes need to adopt new meanings for words (i.e. make a word cover a different concept) or develop new labels (words) for concepts. The recent broadening of the meaning of the term model is an example of the first instance; the development of concepts such as sibling and status stress are examples of the second. When we adopt new meanings or develop new labels, we begin to develop a specialized jargon or terminology. Researchers in medicine, the physical sciences and related fields frequently use terms that are unintelligible to outsiders. Jargon no doubt contributes to the efficiency of communication among specialists, but it tends to exclude everyone else. THE IMPORTANCE OF CONCEPTS TO RESEARCH Concepts are basic to all thought and communication, yet in everyday use we pay scant attention to the problems encountered in their use. In research, special problems grow out of the need for concept precision and inventiveness. We design hypotheses using concepts. We devise measurement concepts by which to test these
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For example, when we survey people on the question of tax equity, the questions we use need to tap faithfully the attitudes of the respondents. Attitudes are abstract, yet we must attempt to measure them using carefully selected concepts. The challenge is to develop concepts that others will clearly understand. We might, for example, ask respondents for an estimate of their familys total income. This may seem to be a simple, unambiguous concept, but we will receive varying and confusing answers unless we restrict or narrow the concept by specifying, say:
time period (weekly, monthly or annually) fixed or variable income before or after tax head of family only or all family members salary and wages only, or also include dividends, interest and capital gains income in kind, such as living rent-free and employee discounts.
PROBLEMS IN CONCEPT USE The use of concepts presents difficulties that are accentuated in a research setting. First, people differ in the meanings they include under any particular label. This problem is so great in normal human communication that we often see cases where, although people use the same language, they do not understand each other. We may all agree to the meaning of concepts such as dog, table, electric light, money, employee and wife. We might encounter more difficulty, however, when we communicate concepts such as household, retail transaction, dwelling unit, regular user and debit. Still more challenging are concepts that are familiar but not well understood, such as leadership, motivation, personality, social class and fiscal policy. Personality, for example, has been defined in the research literature in more than 400 ways.16 Although this may seem extreme, writers are not able to express the complexity of the determinants of personality and its attributes (e.g. authoritarianism, risk-taking, locus of control, achievement orientation and dogmatism) in a fashion that leads to agreement. The concepts described represent progressive levels of abstraction that is, the degree to which the concept does or does not have objective referents. Table is an objective concept in that we can point to a table and we can conjure up in our minds an image of a table. An abstraction like personality is much more difficult to visualize. Such abstract concepts are often called constructs.
Constructs
As used in research in the social sciences, the term construct refers to an image or idea specifically invented for a given research and/or theory-building purpose. We build constructs by combining the simpler concepts, especially when the idea or image we intend to convey is not directly subject to observation. Concepts and constructs are easily confused. Heres an example to clarify the differences involved. A human resource analyst at CadSoft, an architectural software company that employs technical writers to work on its product manuals, is analysing the task attributes of a job that is in need of a redesign. She knows that the job description for a technical writer consists of three
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Manuscript errors
Syntax
Spelling
Keyboarding speed
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snapshot
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Fresher: fewer than 30 hours credit Second-year student: 3059 hours credit Junior: 6089 hours credit Senior: more than 90 hours credit
The two examples given above deal with relatively concrete concepts, but operational definitions are even more critical in treating abstract ideas. Suppose you want to measure a construct called organizational commitment. You may intuitively understand what this means, but it is difficult to attempt to measure it among workers. You would probably need to develop a commitment scale of your own, or you may be able to use a scale that has already been developed and validated by someone else. This scale then operationally defines the construct. While operational definitions are needed in research, they also present some problems. One ever-present danger is thinking that a concept and its operational definition are the same thing. We forget that our definitions provide only a limited insight into what a concept or construct really is. In fact, the operational definition may be quite narrow and quite dissimilar to that someone else might use when researching the same topic. When measurements by two different definitions correlate well, this correlation supports the view that each definition measures the same concept adequately. The problem of operational definitions is particularly difficult when dealing with constructs. Constructs have few empirical referents by which to confirm that an operational definition really measures what we hope it does. The correlation between two different definition formulations strengthens the belief that we are measuring the same thing. On the other hand, if there is little or no correlation, this may mean that we are tapping several different partial meanings of a construct. It may also mean that one or both of the operational definitions are not true labels. Whether you use a definitional or operational definition, its purpose in research is basically the same: to provide a way of understanding and measuring concepts. You may need to provide operational definitions for only a few critical concepts, but these will almost always be the definitions used to develop the relationships found in hypotheses and theories.
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Independent variable Presumed reason Stimulus Predicted from ... Antecedent Manipulated Predictor
Dependant variable Presumed effect Response Predicted to ... Consequence Measured outcome Criterion
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(a)
DV: productivity
IV: four-day working week CFV: meeting attendance (c) CV: sunshine MV: workers age
DV: productivity
DV: productivity
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Descriptive hypotheses
Both of the above hypotheses are examples of descriptive hypotheses. These are propositions that typically state the existence, size, form or distribution of some variable. For example: In Denmark (case), the October seasonally adjusted unemployment rate (variable) stands at 5.8 per cent of the labour force. The member states of the European Union (case) are experiencing budget difficulties (variable). Eighty per cent of Company Z stockholders (case) favour increasing the companys cash dividend (variable). Researchers often use a research question rather than a descriptive hypothesis. Thus, in place of the above hypotheses, we might use the following questions.
What is the unemployment rate in Denmark? Are European states experiencing budget difficulties? Do stockholders of Company Z favour an increased cash dividend?
Either format is acceptable, but the descriptive hypothesis format has several advantages, as follows.
It encourages researchers to crystallize their thinking about the likely relationships to be
found.
It further encourages them to think about the implications of a supported or rejected finding. It is useful for testing statistical significance.
Relational hypotheses
The research question format is less frequently used with a situation calling for relational hypotheses. These are statements that describe a relationship between two variables with respect to a particular case. For example: Foreign (variable) cars are perceived by Italian consumers (case) to be of better quality (variable) than domestic cars.
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it guides the direction of the study it identifies those facts that are relevant and those that are not it suggests which form of research design is likely to be most appropriate it provides a framework for organizing the conclusions.
A frequent problem in research is a proliferation of interesting information. Unless the researcher curbs their urge to include additional elements, a study can be diluted by trivial concerns that do not answer the basic questions posed by the management dilemma (i.e. the focus of the research). The virtue of a hypothesis is that, if taken seriously and adhered to, it limits what will be studied. To consider the role of the hypothesis in determining the direction of a piece of research, suppose we take this example: Husbands and wives agree in their perceptions of their respective roles in purchase decisions. The hypothesis specifies who will be studied (married couples), in what context they will be studied (their consumer decision-making), and what in particular will be studied (their individual perceptions of their roles). The nature of this hypothesis and the implications of the statement suggest that the best research design would be a communication-based study, probably a survey or interview. We have at this time no other practical means to ascertain perceptions of people except to ask about them in one way or another. In addition, we are interested only in the roles that are assumed in the purchase or consumer decision-making situation. The study should not, therefore, involve itself in seeking information about other types of roles husbands and wives might fulfil. Reflection on this hypothesis might also reveal that husbands and wives disagree on their perceptions of their roles, but these differences may be explained in terms of additional variables, such as age, social class, background, personality differences and other factors not associated with their difference in gender.
For a descriptive hypothesis, adequacy for its purpose means that it clearly states the condition, size or distribution of some variable in terms of values that are meaningful to the research task. If it is an explanatory hypothesis, it must explain the facts that gave rise to the need for explanation. Using the hypothesis, plus other known and accepted generalizations, one should be able to deduce the original problem condition. A hypothesis is testable if it meets the following conditions.
It does not require techniques that are currently unavailable. It does not require an explanation that defies known physical or psychological laws. There are consequences or derivatives that can be deduced for testing purposes.
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has a greater range than its rivals explains more facts than its rivals explains a greater variety of facts than its rivals is simple, requiring few conditions or assumptions.
Theory
Hypotheses play an important role in the development of theory. While theory development has not, historically, been an important aspect of business research, it is gradually becoming more influential. Someone who is unfamiliar with research might use the term theory to mean the opposite of fact. In this sense, theory is viewed as being speculative. You might hear, say, that Professor X is too theoretical, that managers need to be less theoretical, or that some idea will not work because it is too theoretical. For the researcher, this gives a distorted picture of the relationship between fact and theory. When you are too theoretical, this is likely to mean that the basis of your explanation or decision is not sufficiently attuned to specific empirical conditions. Although this may be so, it does not prove that theory and fact are opposites. The truth is that fact and theory are each necessary for the other to be of value. Our ability to make rational decisions, as well as to develop scientific knowledge, is measured by the degree to which we combine fact and theory. We all operate on the basis of the theories we hold. In one sense, theories are the generalizations we make about variables and the relationships among them. We use these generalizations to make decisions and predict outcomes. For example, it is midday and you note that, outside, the natural light is dimming, dark clouds are moving rapidly in from the west, the breeze is freshening and the air temperature is getting cooler. Would your understanding of the relationship between these variables (your weather theory) lead you to predict that something decidedly wet is likely to occur at any minute? Consider a situation where you are called upon to interview two people for possible promotion to the position of department manager. Do you have a theory about the characteristics such a person should have? Suppose you interview Ms A and observe that she answers your questions well, openly and apparently sincerely. She also expresses thoughtful ideas about how to improve departmental functioning and is articulate in stating her views. Ms B, on the other hand, is guarded in her comments and reluctant to advance ideas for improvement. She answers questions by saying what Mr General Manager wants. She is also less articulate and seems less sincere than Ms A. You would probably choose Ms A, based on the way you combine the concepts, definitions and propositions mentioned into a theory of managerial effectiveness. Your theory of managerial effectiveness, while workable, may not necessarily be a good theory because of the variables it has ignored, but it illustrates that we all use theory to guide our decisions, predictions and explanations. A theory is a set of systematically interrelated concepts, definitions and propositions that are advanced to explain and predict phenomena (facts). In this sense, we have many theories and use them continually to explain or predict what goes on around us. To the degree that our theories are sound and fit the situation at hand, we are successful in forming explanations and predictions. Thus, while a given theory and a set of facts may not fit, they are not opposites. Our challenge is to build a better theory and to be more skilful in fitting together theory and fact. The ways in which theory differs from hypothesis may also be a source of confusion. This book makes the general distinction that the difference between theory and hypothesis is one of degree of complexity and abstraction. In general, theories tend to be complex, abstract and
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meaningful way
summarizes what is known about an object of study, and states the uniformities that lie
Models
The term model is used in various fields of business and allied disciplines with little agreement as to its definition. This may be because of the numerous functions, structures and types of model that exist. Most definitions agree, however, that models represent phenomena through the use of analogy. A model may be defined for our purposes as the representation of a system that is constructed to study some aspect of that system or the system as a whole. Models differ from theories in that a theorys role is explanation, whereas a models role is representation: A model is not an explanation; it is only the structure and/or function of a second object or process. A model is the result of taking the structure or function of one object or process and using that as a model for the second. When the substance, either physical or conceptual, of the second object or process has been projected onto the first, a model has been constructed.22 Many ideas about new product adoption, for example, can be traced to rural sociology models. These describe how information and innovations spread throughout communities or cultures, starting with opinion leaders. The behaviour of a respected leader is subsequently embraced by society as a whole to express homage to that leader and retain social acceptance. Models may be used for applied or highly theoretical purposes. Almost everyone is familiar with queuing models of service: banks, post offices, telephone voice-response units and airport security units feed patrons from a single queue to multiple service points. Other models, for assembly lines, transportation and inventory, also attempt to solve immediate practical needs. A model to advance a theory of quality of working life, for example, could target employee behaviour under conditions of flexitime, permanent part-time, job-sharing and compressed working week. Description, explication and simulation are the three major functions of modelling. Each of these functions is appropriate to applied research or theory building.
Descriptive models: describe the behaviour of elements in a system where theory is
inadequate or non-existent.
Explicative models: extend the application of well-developed theories or improve our
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Monte Carlo simulation models are examples of static simulations. They simulate probabilistic processes using random numbers. Redistribution of market share, brand switching and prediction of future values are just some examples of areas that can benefit from dynamic modelling.
SUMMARY
1 Research is any organized inquiry that is carried out in order to provide information that can be used to solve problems. Business research is a systematic inquiry that provides information to guide business decisions. This includes reporting, descriptive, explanatory and predictive studies. This book emphasizes the last three. 2 What characterizes good research? Generally, we expect good research to be purposeful, with a clearly defined focus and plausible goals, with defensible, ethical and replicable procedures, and with evidence of objectivity. The reporting of procedures their strengths and weaknesses should be complete and honest. Appropriate analytical techniques should be used; conclusions drawn should be limited to those clearly justified by the findings; and reports of findings and conclusions should be presented clearly and be professional in tone, language and appearance. Managers should always choose a researcher who has an established reputation for good-quality work. The research objective and its benefits should be weighed against any potentially adverse effects. 3 Research in management and business is rooted in different research philosophies. The most prominent ones are positivism and interpretivism. Positivism is the research philosophy adopted from the natural sciences. Its proponents believe that the social world exists externally and can be viewed objectively. Hence a real truth exists and it can best be understood by reducing it to the simplest possible elements. Moreover, they claim that research is value-free and that researchers should take an independent role as objective analysts. Interpretivism supposes that the social world is constructed and people give subjective meaning to it. Hence, the social world is an individual construction and, to understand it, the researcher needs to look at a total picture. Unlike positivists, interpretivists believe that research is driven by interests and that the researcher is part of what is observed. 4 The demand for information tomorrow will be much greater than it is today. Research will make a major contribution to providing this knowledge. The knowledge of research methods will be of value in many situations for managers, public policy-makers and scientific researchers. They may need to conduct research either for themselves or for others. As users and readers of research results they will need to be able to judge research quality. Finally, they may become research specialists themselves.
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5 Styles of thinking are perspectives, or filters, for determining how we view and understand reality. They affect what we accept as truth and govern how rigorously we test the information we receive before endorsing it. Although the scientific method is the preeminent means by which we secure empirical information, it is not the only source of truth. Other styles of thinking also have an apparent, and often useful, influence on business disciplines, and give their approval to the theory-building and problem-solving approaches of those fields. Scientific inquiry is grounded in the inference process. This process is used for the development and testing of various propositions, largely through the so-called double movement of reflective thinking. Reflective thinking involves sequencing induction and deduction in order to explain inductively (by hypothesis) a puzzling condition/dilemma. In turn, the hypothesis is used in the deduction of further facts that can be sought to confirm or deny the truth of the hypothesis. Researchers think of doing science as an orderly process that combines induction, deduction, observation and hypothesis testing into a set of reflective thinking activities. Although the scientific method consists of neither sequential nor independent stages, the problem-solving process it reveals provides insight into the way research is conducted. 6 Scientific methods and scientific thinking are based on concepts the symbols we attach to bundles of meaning that we hold and share with others. We invent concepts to help us to think about and communicate abstractions. We also use higher-level concepts constructs for specialized scientific explanatory purposes that are not directly observable. Concepts, constructs and variables may be defined descriptively or operationally. Operational definitions, which are essential in research, must specify adequately the empirical information needed and state how it will be collected. In addition, they must have the proper scope or fit for the research problem at hand. Concepts and constructs are used at the theoretical level; variables are used at the empirical level. Variables can be allocated numerals or values for the purpose of testing and measurement. They may be classified as explanatory (independent, dependent or moderating), extraneous or intervening. 7 Propositions are of great interest in research because they may be used to assess the truth or falsity of relationships among observable phenomena. When we advance a proposition for testing, we are hypothesizing. A hypothesis describes the relationships between or among variables. A good hypothesis is one that can explain what it claims to explain, is testable, and has greater range, probability and simplicity than its rivals. Sets of interrelated concepts, definitions and propositions that are advanced to explain and predict phenomena are called theories. Models differ from theories in that models are analogies or representations of some aspect of a system or of the system as a whole. Models are used for description, explication and simulation.
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Examples index
COMPANY Air Swiss* Akademiska Sjukhuset* Bridgestone/Firestone ColorSplash* Ford Motor Co. Marriott International, Inc. Stiftung Warentest Tom Peters Which? York College* SCENARIO An airline assessing different potential cooperation partners A hospital investigating the costs and benefits of investing in new medical equipment Studying secondary data to understand tyre tread separation A paint manufacturer studying inventory control options to improve profitability Studying secondary data to understand Explorer roll-over susceptibility An international hotel chain seeking an understanding of how hotel guests interpret the term concierge service A study of how corporate social responsibillity can be incorporated in assessments of products and services Research process reflected in In Search of Excellence A study of how corporate social responsibility can be incorporated in assessments of products and services A college investigating its alumnis opinion on a retirement community project PAGE 7 7 11 7 11 30 5 17 5 8
* Due to the confidential and proprietary nature of most research, the names of these companies have been changed.
Discussion questions
Terms in review
1 What is research? Why should there be any question about the definition of research? 2 What is the difference between applied and basic or pure research? Use a decision about how a salesperson is to be paid, by commission or salary, and describe the question that would guide applied research versus the question that would guide pure research. 3 Distinguish among the following sets of items, and suggest the significance of each in a research context. (a) (b) (c) (d) (e) (f) (g) concept and construct deduction and induction operational definition and dictionary definition concept and variable hypothesis and proposition theory and model scientific method and scientific attitude
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4 Describe the basic principles and assumptions of positivism and interpretivism. 5 Describe the characteristics of the scientific method. 6 Listed below are some terms commonly found in a management setting. Are they concepts or constructs? Give two different operational definitions for each. (a) (b) (c) (d) (e) (f) (g) (h) (i) first-line supervisor employee morale assembly line overdue account line management leadership priceearnings ratio union democracy ethical standards
7 In your companys management development programme there was a heated discussion between some people who claimed that Theory is impractical and thus no good and others who claimed that Good theory is the most practical approach to problems. What position would you take and why? 8 An automobile manufacturer observes demand for its brand increasing as per capita income increases. Sales increases also follow low interest rates, which ease credit conditions. Buyer purchase behaviour is seen to be dependent on age and gender. Other factors influencing sales appear to fluctuate almost randomly (e.g. competitor advertising, competitor dealer discounts, introductions of new competitive models). (a) If sales and per capita income are positively related, classify all variables as dependent, independent, moderating, extraneous or intervening. (b) Comment on the utility of a model based on the hypothesis.
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(ii) head of an academic department committee charged with selecting a research methods textbook. (b) When the management decision problem has not yet been specified: (i) manager of a restaurant (ii) plant manager at a shoe factory (iii) director of the TV programme Who Wants To Be A Millionaire? in charge of sponsor recruitment (iv) data analyst with ACNielsen (research specialist) (v) human resources manager at a university (vi) product manager for the Mercedes A Class (vii) family services officer for your county (viii) office manager for a paediatrician. 12 The new president of an old, established company is facing a problem. The company is currently unprofitable and is, in the presidents opinion, operating inefficiently. The company sells a wide range of equipment and supplies to the dairy industry. It manufactures some items and sells many wholesale to dairies, creameries and similar plants. Because the industry is changing in several ways, survival will become more difficult in the future. In particular, many equipment companies are bypassing wholesalers and selling direct to dairies. In addition, many independent dairies are being taken over by large food chains. How might research help the new president make the right decisions? In answering this question, consider the areas of marketing and finance as well as the company as a whole. 13 You have received the results of a research report carried out by a consultant on behalf of your firm, a life insurance company. The study is a survey of morale in the home office and covers the opinions of about 500 secretaries and clerks, as well as about 100 executives and actuaries. You are asked to comment on its quality. What will you look for? 14 As area sales manager for a company that manufactures and markets outboard engines, you have been assigned the responsibility of conducting a research study to estimate the sales potential of your products in the Scandinavian market. Discuss the key issues and concerns arising from the fact that you, the manager, are also the researcher. 15 You observe the following condition: Our female sales representatives have lower customer defections than do our male sales representatives. (a) Propose the concepts and constructs you might use to study this phenomenon. (b) How might any of these concepts and/or constructs be related to explanatory hypotheses? 16 You are the office manager of a large firm. Your company prides itself on its high-quality customer service. Lately, complaints have surfaced which reveal that an increasing number of incoming calls are being misrouted or dropped. Yesterday, when passing the main reception area, you noticed the receptionist fiddling with his hearing aid. In the
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process, a call came in and would have gone unanswered if not for your intervention. This particular receptionist had earned an unsatisfactory review three months earlier, for tardiness. Your inclination is to urge this employee who has been with the firm for 20 years to retire, or to fire him if retirement is rejected. However, you know the individual is well liked and seen as a fixture in the company. (a) Suggest several hypotheses that might account for dropped or misrouted incoming calls. (b) Using the double movement of reflective thought, show how you would test these hypotheses.
Class discussion
19 Suppose you are part of an international team of social experts asked to assess the organizational culture within a large life insurance company. All class members born in the months January to June should follow the positivistic research philosophy, while those class members born in the months July to December take the interpretivism route. Discuss how the organizational culture of the company could be assessed. 20 Business decisions are often taken under immense time pressure. Often, there is just not enough time to collect information based on good research. Discuss on which criteria of good research you would compromise if you just did enough not have enough time; or would it be better to abandon the research altogether, if it cannot be conducted well, as the obtained information is likely to be invalid and unreliable?
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A glossary of key terms can be found on the Online Learning Centre for this book.
NOTES
1 See, for example, Murray Levine, Investigative reporting as a research method: analysis of Bernstein and Woodwards All the Presidents Men, American Psychologist 35 (1980), pp. 62638. 2 See, for example, Elizabethann OSullivan and Gary R. Rassel, Research Methods for Public Administrators. New York: Longman, 1999. 3 Fred N. Kerlinger and Howard B. Lee, Foundations of Behavioral Research (4th edn). New York: HBJ College & School Division, 1999, p. 15. 4 A hypothesis is a statement that is advanced for the purpose of testing its truth or falsity. 5 An exploratory study describes an investigation when the final research problem has not yet been clearly fixed. Its aim is to provide the insights needed by the researcher to develop a more formal research design. 6 Reprinted with the permission of Macmillan Publishing Co., Inc. from Robert Dubin, Theory Building (revised edn, 1978). Copyright 1969, The Free Press, a division of Macmillan Co. 7 Mark Easterby-Smith, Richard Thrope and Andy Lowe, Management Research. An Introduction. London: Sage, 1991, p. 20. 8 Auguste Comte, The Positive Philosophy of Auguste Comte. London: Trubner & Co., 1853. 9 Jrgen Habermas, Knowledge and interest, in D. Emmet and A. MacIntyre (eds), Sociological Theory and Philosophical Analysis. London: Macmillan, 1970. 10 Howard Kahane, Logic and Philosophy, 2nd edn. Belmont, CA: Wadsworth, 1973, p. 3.
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key terms
applied research basic research business research concept conceptual scheme construct control deduction descriptive study double movement of reflective thought explanatory study hypothesis correlational descriptive explanatory (causal) relational induction interpretivism management dilemma model
operational definition positivism predictive study proposition pure research realism reporting study research variable scientific method theory variable(s) confounding continuous control dependent dichotomous extraneous independent intervening moderating
7th edn. Upper Saddle River, NJ: Prentice-Hall, 2003. Addresses question-asking skills and the techniques necessary for evaluating different types of evidence. Bryman, Allan and Emma Bell, Business Research Methods. Oxford: Oxford University Press, 2003. Chapter 1 offers a fine philosophical-based introduction to research methods. Churchman, C.W., The Design of Inquiring Systems. New York: Basic Books, 1971. An essential work for understanding the connections between philosophy, science and the nature of inquiry. Haas, Peter J. and J. Fred Springer, Applied Policy Research: Concepts and Cases. New York: Garland Reference Library of Social Science, No. 1051, 1998. Chapter 2 discusses policy research strategies and contributions. Hoover, Kenneth R. and Todd Donovan, The Elements of Social Scientific Thinking (6th edn). New York: Worth Publishers, 1994. A brief but highly readable treatise on the elements of science and scientific thinking. Kaplan, Abraham, The Conduct of Inquiry. San Francisco: Transaction Publications, 1998. A good source of information on the philosophy of science and logical reasoning. Kerlinger, Fred N. and Howard B. Lee, Foundations of Behavioral Research (4th edn). New York: HBJ College & School Division, 1999. Especially Part 1: Introduction to Business Research. Medema, Steven G. and Warren J. Samuels (eds), Foundations of Research in Economics. How do Economists do Economics? Cheltenham: Edward Elgar, 1997. This edited volume offers insights from outstanding economists on how to conduct economic research. Although it focuses on economics, the insights provided are also useful for other social sciences.
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University Press, 1970. A research report detailing the experiences of social scientists employed in industry. Chapter 7 presents a summary of findings. Remenyi, Dan et al., Doing Research in Business and Management: An Introduction to Process and Method. Thousand Oaks, CA: Sage Publishing, 1998. Chapters 1 and 2 establish the business research perspective for management students. Transfield, D. and K. Starkey, The nature, social organization and promotion of management research: towards policy British Management Journal 9, 1998, pp. 34153. An article emphasizing the application side of management research and the significance of crossfertilization between science and business practice.
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