Research Methods for Business

A Skill Building Approach

Day 1

Uma Sekaran and Roger Bougie

Donald R. Cooper & Pamela S. Schindler

1
 What is Research?
• Research is the process of finding solutions to
a problem after a thorough study and analysis
of the situational factors.

2
 What is Research?
• Managers in organizations constantly engage
themselves in studying and analyzing issues
and hence are involved in some form of
research activity as they make decisions at the
workplace.

3
 The Excitement of Research
• Modern technology has made research an
exciting and a relatively smooth process.
• Personal computer with any means to an
Internet connection places one within easy
reach of knowledge of what is happening in
the global markets and how the world
economy is impacting on business.

4
 The Excitement of Research
• Decision making is merely a process of choosing from among
alternative solutions to resolve a problem and research helps
to generate viable alternatives for effective decision making.

• You can differentiate between good and bad studies published

in professional journals – after all its about choosing between
different alternatives

5
 Business Research
• Business research can be described as a systematic and
organized effort to investigate a specific problem encountered
in the work setting, that needs a solution.

• Business research comprises a series of steps designed and

executed, with the goal of finding answers to the issues that
are of concern to the manager in the work environment.

6
 Business Research
• Steps of business research:
 To know where the problem areas exist in the
organization.
 To identify as clearly and specifically as possible the
problems that need to be studied and resolved.
 Gather information, analyze the data, and determine
the factors that are associated with the problem and
solve it by taking the necessary corrective measures.

7
 Research and the Manager
• The managers encounter big and small
problems on a daily basis, which they have to
solve by making the right decisions.
• In business, research is usually conducted to
resolve problematic issues in the areas of
accounting, finance, management, and
marketing.

8
 Research and the Manager
• Problems in Accounting:
- Budget control systems
- Inventory costing methods
- Depreciation
- Time-series behavior of quarterly earnings
- Transfer pricing
- Taxation methods

9
 Research and the Manager
• Problems in Finance:
- The operations of financial institutions
- Optimum financial ratios
- Mergers and acquisitions
- Leveraged buyouts
- Intercorporate financing
- Yields on mortgages
- The behavior of the stock exchange

10
 Research and the Manager
• Problems in Management:
- Employee attitudes and behaviors
- Human resources management
- The impact of changing demographics on
management practices
- Production operations management
- Strategy formulation
- Information systems

11
 Research and the Manager
• Problems in Marketing:
- Product image
- Advertising
- Sales promotion
- Product distribution
- Product packaging
- Product pricing
- After-sales service
- Consumer preferences
- New product development

12
 Types of Business Research
• Research can be undertaken for two different
purposes:

1. To solve a current problem faced by the manager in the

work setting. Such research is called applied research.

2. To generate a body of knowledge about how to solve

problems that could be occurred in organizations. This is
called basic research or fundamental research. It is also
known as pure research.

13
 Examples of Applied Research
• Apple’s iPod sales increased by 200% from 2001 to
2008. but the sales decreased by 6% in 2009. What is
the reason for this decrease?
• The question is: what will apple do about this
problem?

14
 Examples of Applied Research
• Xerox is insular and isn’t ready for the
increasingly competitive, high-tech world.
Xerox still relies on old-fashioned and slow-
selling analog copiers for more than half its
revenue and despite its double-digit growth in
digital products and services, its sales rose just
4%.

15
 Examples of Applied Research
• In the Xerox situation, it needs to look into the
efficacy of the analog technology used in
copiers and examine what should be done to
increase efficiency and promote its sales.

16
 Examples of Basic Research
• University professors engage in basic research in an effort to
understand and generate more knowledge about various
aspects of businesses, such as:
- How to improve the effectiveness of information systems.
- How to integrate technology into the overall strategic
objectives of an organization.
- How to increase the productivity of the employees.
- How to increase the effectiveness of small businesses.

17
 Examples of Basic Research
• These findings later become useful for
application in business situations.

18
 Distinction Between Applied and Basic
Research
• The main distinction between applied and basic business
research is:

- Applied research is specifically aimed at solving a currently

experienced problem.

- Basic research has a broader objective of generating

knowledge and understanding of phenomena and problems
that occur in various organizational settings.

- Both types of research follow the same steps of systematic

inquiry to arrive at solutions to problems.

19
 Ethics and Business Research
• Ethics in business research refers to a code of
conduct of behavior while conducting research.
• Ethical conduct applies to the organization and the
members that sponsor the research, the researchers
who undertake the research, and the respondents
who provide them with the necessary data.

20
 Ethics and Business Research
• The members that sponsor the research should do it in good
faith, pay attention to what the results indicate, and pursue
organizational rather than self-interest.

• Ethical conduct should also be reflected in the behavior of

the researchers who conduct the investigation, the
participants who provide the data, the analysts who provide
the results, and the entire research team that presents the
interpretation of the results and suggests alternative
solutions.

21
 Definition of Scientific
Research

Scientific Research focusing on

solving problems and pursues a
step by step logical, organized and
rigorous method to identify the
problems, gather data, analyze
them and draw valid conclusions
t h e r e f r o m .
 Why Scientific Research?
• This research is not based on hunches,
experience and intuition.
• It is purposive and rigorous.
• Enables all those who are interested in
researching and knowing about the same or
similar issues to come up with comparable
findings when data are analyzed.
• Findings are accurate and confident.
• Apply solutions to similar problems.
• It is more objective.
 Cont.
• Highlights the most critical factors at the work place
that need specific attention to solve or minimize
problems.
• Scientific Investigation and Managerial Decision
Making are integral part of effective problem
solving.
• It can be applied to both basic and applied research.
The Hallmarks of Scientific Research
The hallmarks or main distinguishing
characteristics of scientific research may
be listed as follows:
1. Purposiveness
2. Rigor
3. Testability
4. Replicability
5. Precision and Confidence
6. Objectivity
7. Generalizability
8. Parsimony
 Hallmarks of Scientific Research
1. Purposiveness

 It has to start with a definite aim or purpose.

 The focus is on increasing employee
commitment.
 Increase employee commitment will translate
into less turnover, less absenteeism and
increased performance levels.
 Thus it has a purposive focus.
2. Rigor
• A good theoretical base and sound methodological design
would add rigor to the purposive study.
• Rigor adds carefulness, scrupulousness and the degree of
exactitude in research.
Example:
A manager asks 10-12 employees how to increase the level
of commitment. If solely on the basis of their responses the
manager reaches several conclusions on how employee
commitment can be increases, the whole approach to the
investigation would be unscientific. It would lack rigor for
the following reasons:
1. Based on few employees
2. Bias and incorrectness
3. There might be other influences on commitment
which are ignored and are important for a researcher
to know
Thus, Rigorous involves good theoretical base and
thought out methodology.
• These factors enable the researcher to collect the
right kind of information from an appropriate sample
with the minimum degree of bias and facilitate
suitable analysis of the data gathered.
• This supports the other six too.
3. Testability
After random selection manager and
researcher develops certain hypothesis on
how manager employee commitment can be
enhanced, then these can be tested by
applying certain statistical tests to the data
collected for the purpose.
The researcher might hypothesize
that those employees who perceive
greater opportunities for
participation in decision making
would have a higher level of
commitment.
4. Replicability
It means that it can be used again if similar
circumstances prevails.
Example:
The study concludes that participation in
decision making is one of the most
important factors that influences the
commitment, we will place more faith and
credence in these finding and apply in
similar situations. To the extent that this
does happen, we will gain confidence in
the scientific nature of our research.
 5. Precision and
Precision Confidence
– Precision refers to the closeness of the findings
to “reality” based on a sample.
– It reflects the degree of accuracy and exactitude
of the results of the sample.
Example: If a supervisor estimated the number
of production days lost during the year due to
absenteeism at between 30 and 40, as against
the actual of 35, the precision of my
estimation more favorably than if he has
indicated that the loss of production days was
somewhere between 20 and 50.
Confidence
– Confidence refers to the probability that our
estimations are correct.
– That is, it is not merely enough to be precise,
but it is also important that we can
confidently claim that 95% of the time our
results would be true and there is only a 5%
chance of our being wrong.
– This is also known as confidence level.
 6. Objectivity
The conclusions drawn through the interpretation of
the results of data analysis should be objective; that is,
they should be based on the facts of the findings
derived from actual data, and not on our subjective or
emotional values.

Example: If we had a hypothesis that stated that greater

participation in decision making will increase
organizational commitment and this was not supported
by the results, it makes no sense if the researcher
continues to argue that increased opportunities for
employee participation would still help!
7. Generalizability
It refers to the scope of applicability of the research
findings in one organization setting to other
settings.

Example: If a researcher’s findings that participation

in decision making enhances organizational
commitment are found to be true in a variety of
manufacturing, industrial and service organizations,
and not merely in the particular organization
studied by the researcher, then the generalizability
of the findings to other organizational settings in
enhanced. The more generalizable the research, the
greater its usefulness and value.
8. Parsimony
Simplicity in explaining the phenomenon or problems that
occur, and in generating solutions for the problems, is always
preferred to complex research frameworks that consider an
unmanageable number of factors.

For instance, if 2-3 specific variables in the work situation are

identified, which when changed would raise the
organizational commitment of the employees by 45%, that
would be more useful be more useful and valuable to the
manager than if it were recommended that he should change
10 different variables to increase organizational commitment
by 48%.
The Building Blocks of Science in Research

Deduction and Inductions

Answers to issues can be
found either by the process of
deduction or the process of
induction, or by a combination
of the two.
 Deduction
• Deduction is the process by which we arrive at a
reasoned conclusion by logical generalization of a
known fact.

Example: we know that all high performers are

highly proficient in their jobs.
If John is a high performer, we then conclude
that he is highly proficient in his job
 Induction
• Induction is a process where we observe certain
phenomena and on this basis arrive at conclusions.

In other words, in induction we

logically establish a general
proposition based on observed facts.
The Hypothetico-Deductive Method
Observation
–Observation is the first stage, in which
one senses that certain changes are
occurring or that some new behaviors,
attitudes and feelings are surfacing in
one’s environment (i.e., the work
place).
–How does one observe phenomena
and changes in the environment?
Preliminary Information Gathering:
– It involves the seeking of information in depth, of
what is observed.
– This could be done by talking informally to several
people in the work setting or to clients or to other
relevant sources, thereby gathering information
on what is happening and why. (Unstructured
interviews)
– Then it is followed by structured interviews.
– Additionally by doing library research or obtaining
information through other sources, the
investigator would identify how such issues have
been tackled in other situations.
 Theory Formulation
– It is an attempt to integrate all the information
in a logical manners, so that the factors
responsible for the problem can be on
conceptualized and tested.
– The theoretical framework formulated is often
guided by experience and intuition.
– In this step the critical variables are identified
and examined as to their contribution or
influence in explaining why the problem occurs
and how it can be solved.
 Hypothesizing
– It is the next logical step after theory formulation.
– From the theorized network of associations
among the variables, certain testable hypotheses
or educated conjectures can be generated.

– Hypothesis testing is called deductive research.

Sometimes, hypotheses that were not originally
formulated do get generated through the process
of induction.
Further Specific Data Collection
–After the development of the
hypotheses, data with respect
to each variable in the
hypotheses need to be
obtained.
–Further data are collected to
test the hypotheses that are
generated in the study.
 Data Analysis
–Data gathered are statistically analyzed
to see if the hypotheses that were
generated have been supported.
–Co relational method will be used to
analyze and determine the relation
ship of two or more factors in the
hypotheses for example: stock
availability and customer satisfaction.
 Deduction
–Deduction is the process of
arriving at conclusions by
interpreting the meaning of
results of the data analysis.
 Other Types of Research
• Case studies and action research
are sometimes used to study
certain types of issues.
1. Case Studies
2. Action Research
 Case Studies
• Case studies involve in depth, contextual analyses of
similar situations in the other organizations, where
the nature and definition of the problem happen to
be the same as experienced in the current situation.
• Case study, as a problem solving technique, is not
often undertaken in organizations because such
studies dealing with problems similar to the one
experienced by a particular organization of a
particular size and in a particular type of setting are
difficult to come by.
 Action Research
• The researcher begins with a problem that is already
identified and gathers relevant data to provide a
tentative problem solution.
• This solution is then implemented, with the
knowledge that there may be unintended
consequences following such implementation.
• The effects are then evaluated, defined and
diagnosed and the research continues on an ongoing
basis until the problem is fully resolved.