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Research Methods for Business

Lecture 01: Introduction to

Research Methods:

Basic Concepts

Dr. Ghulam Dastgeer

0333-5111469

hellodastgeer@gmail.comInternational Islamic University, Islamabad

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Why do we need

Research?

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O Whereas a calculator on ENIAC isequipped with 18,000 vacuum tubes and

weighs 30 tons, computers in the futuremay have only 1,000 vacuum tubes andperhaps only 1.5 tons.

- The Popular Mechanics- March 1949

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O I can think of no conceivable reason whyan individual should wish to have a

computer in his own home

- Kenneth Olsen, Chairman, DigitalEquipment Corporation, 1977

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Duration taken to double

knowledgeYear Duration taken to double knowledge

O 1500 1500 years

O 1800 300 yearsO 1900 100 years

O 1940 20 years

O 1970 7 years

O 2020 72 days

American Society of Training and Developmenthttp://astd2007.astd.org/PDFs/Handouts%20for%20Web/SU402.pdf

http://astd2007.astd.org/PDFs/Handouts%20for%20Web/SU402.pdfhttp://astd2007.astd.org/PDFs/Handouts%20for%20Web/SU402.pdfhttp://astd2007.astd.org/PDFs/Handouts%20for%20Web/SU402.pdfhttp://astd2007.astd.org/PDFs/Handouts%20for%20Web/SU402.pdf

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O Over 90% of the relevant literature in many

technical fields, such as biotechnology,

astronomy, computers and software, andenvironmental sciences, produced from 1985 -

2000.

O J B Quinn (2001)

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Why Study Research?O The primary purpose is advancement of

human knowledge

O Research provides you with theknowledge and skills needed for the fast-paced decision-making environment

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What is RESEARCHO Research is the process of finding

solutions to a problem after a thorough

study and analysis of thesituationalfactors.

O Enquiry is aimed at understanding athing orphenomenon orsolving aproblem

O Research is an art of scientificinvestigation.

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What is Business ResearchO Business research method is a systematic and

scientific procedure of data collection, compilation,analysis, interpretation, and implication pertaining

to any business problem.O Business research is an organized systematic,

data-based, critical, objective, scientific inquiry orinvestigation into a specific problem, undertakenwith the purpose of finding answers or solutions toit.

O Research provides the needed information thatguides managers to make decisions tosuccessfully deal with problems.

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Business ResearchersO Business researchers systematically

collect, compile, analyze, and interpret

data to provide quality information basedon which a decision maker will be able totake a decision in an optimum manner.

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General Business Conditions and

Corporate Research

O Short- & Long-Range Forecasting,O Business and Industry TrendsO Global EnvironmentsO Inflation and PricingO Plant and Warehouse Location

O Acquisitions

Financial and Accounting Research

O Forecasts of financial interest ratetrends,

O Stock,bond and commodity valuepredictions

O capital formation alternativesO mergers and acquisitionsO

risk-return trade-offsO portfolio analysisO impact of taxesO research on financial institutionsO expected rate of returnO capital asset pricing modelsO credit risk

O cost analysis

Fields Where Business Research is Often Used (1)

Management and Organizational

Behaviour Research

Total Quality Management Morale and Job Satisfaction

Leadership Style Employee Productivity Organizational Effectiveness Structural ssues Absenteeism and turnover Organizational Climate

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Sales and Marketing Research

O Market PotentialsO Market ShareO Market segmentationO Market characteristicsO Sales AnalysisO

Establishment of sales quotasO Distribution channelsO New product conceptsO Test marketsO Advertising researchO Buyer behaviourO Customer satisfaction

O Website visitation rates

Information Systems Research

O Knowledge and information needsassessment

O Computer information system use andevaluation

O Technical suppot satisfactionO Database analysisO Data miningO Enterprise resource planning systemsO Customer relationship management

systems

Corporate Responsibility Research

O Ecological Impact

O Legal Constraints on advertising andpromotionO Sex, age and racial discrimination /

worker equityO Social values and ethics

Fields Where Business Research is Often Used (2)

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Types of Business ResearchO Classification # 1

O Descriptive ResearchO Explanatory researchO

Causal researchO Classification # 2

O BasicO Applied

O Classification # 3O QualitativeO Quantitative

O Classification # 4O Cross-sectional studiesO Longitudinal studies

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Descriptive ResearchO Undertaken in order to ascertain and be able to

describe the characteristics of the variables ofinterest in a situation.

O Descriptive research describes a single event orcharacteristic or relates a few events or variablesthrough statistical analysis

O Examples:O What is incidence of project failure in Pakistan?O Describe what is going on or exists.

O Description of characteristics of a group of employees,like, the age, educational level, job status, and length ofservice, nationality etc.

O Estimate how groups of project managers might behave

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Explanatory Research

O Explanatory research answers why and howof the phenomenon through hypotheses and

theoriesO Uses theory

O Much of the research published in journals isexplanatory

O

Example:Impact of job satisfaction on performance ofprojects

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Causal Research

O Causal study is how one variable

produces changes in another

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Applied research

O Is to solve a current problem faced by the manager in thework setting, demanding a timely solution.

O This research is done with the intention of applying the

results of the findings to solve specific problem currentlybeing experienced in an organization.

Example:

O Should a corporation adopt a paperless office environment?O Should McDonalds add Italian pasta dinners to its menu?O Should Procter & Gamble add a high-priced home teeth

bleaching kit to its product line?O Research showed Crest Whitestrips would sell well at a

retail price of $44

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Basic research (fundamental, pure)O Is to generate a body of knowledge by trying to comprehend how

certain problems that occur in organizations can be solved.O The findings of such research contribute to the building of

knowledge in the various functional areas of business.O Generally not related to a specific problem and its findings cannot

be immediately applied.

O Purpose is to generate more knowledge and understanding of thephenomena of interest and to build theories based on the researchresults.

O Mostly performed by academics

Example:O A MS/PhD student research

O How does motivation affect employee performance?O Is executive success correlated with high need for achievement?

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Quantitative Vs QualitativeQuantitative Qualitative

Objective Subjective

Research questions: How many? When?Where? Strength of association?

Research questions: What? Why? How

Test theory Develop theory

Hypothesis Research questions

Measurable Interpretive

Report statistical analysis.Basic element of analysis is numbers

Report rich narrative, individual; interpretation.Basic element of analysis is words/ideas.

Reasoning is deductive Reasoning is inductive

Uses instruments Uses communications and observation

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O Cross-sectional studies are carried outonce and represent a snapshot of one

point in time

O Longitudinal studies are repeated over anextended period

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Other Types of ResearchCase Studies:

O Case studies involve in depth, contextual analysesof similar situations in the other organizations,

where the nature and definition of the problemhappen to be the same as experienced in thecurrent situation.

O Case study, as a problem solving technique, is notoften undertaken in organizations because suchstudies dealing with problems similar to the one

experienced by a particular organization of aparticular size and in a particular type of setting aredifficult to come by.

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Statistical studies:

O Attempt to capture a populations

characteristics by making inferences froma samples characteristics

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Manager and ResearchWhy is it important for managers to knowabout research?

O Solve problems

O Decision making tool

O Competition

O Risk

O Investment

O Hire researchers and consultants moreeffectively

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The Scientific ResearchO Scientific Research focusing on solving

problems and pursues a step by step

logical, organized and rigorous method toidentify the problems, gather data,analyze them and draw valid conclusionsthere from.

O It can be applied to both basic

and applied research.

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Why Scientific Research?O This research is not based on hunches,

experience and intuition.

O It is purposive and rigorous.

O Enables all those who are interested inresearching and knowing about the same orsimilar issues to come up with comparablefindings when data are analyzed.

O Findings are accurate and confident.

O Apply solutions to similar problems.

O It is more objective.

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What is Good Research?O The main distinguishing characteristics of

scientific research are:1. Purposiveness2. Rigor3. Testability4. Replicability5. Precision and Confidence6. Objectivity7. Generalizability8. Parsimony

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O Purposiveness

The manager has started research with a

definite aim or purpose.

Example: The focus is on increasing thecommitment of employees to theorganization.

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2. Rigor

O A good theoretical base and soundmethodological design would add rigor to thepurposive study.

O Rigorous involves good theoretical base andthought out methodology. These factorsenable the researcher to collect the right kindof information from an appropriate samplewith the minimum degree of bias and facilitatesuitable analysis of the data gathered.

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3. Testability:

O Scientific research lends itself to testing

logically developed hypotheses to seewhether or not the data support thehypotheses that are developed after acareful study of the problem situation.

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4. Replicability

O It means that it can be used again if

similar circumstances prevails.O Our hypotheses have not been supported

merely by chance, but are reflective of thetrue state of affairs in the population.

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5. Precision and Confidence

Precision

O Precision refers to the closeness of the findings to

reality based on a sample.O It reflects the degree of accuracy and exactitudeof the results of the sample.

Example: If a supervisor estimated the number ofproduction days lost during the year due toabsenteeism at between 30 and 40, as against theactual of 35, the precision of my estimation more

favorably than if he has indicated that the loss ofproduction days was somewhere between 20 and 50.

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Confidence

O Confidence refers to the probabilitythat our estimations are correct.

O That is, it is not merely enough tobe precise, but it is also importantthat we can confidently claim that95% of the time our results wouldbe true and there is only a 5%chance of our being wrong.

O This is also known as confidencelevel

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6. Objectivity:

The conclusions drawn through the interpretation ofthe 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 oursubjective or emotional values.

Example: If we had a hypothesis that stated thatgreater participation in decision making willincrease organizational commitment and this was

not supported by the results, it makes no sense ifthe researcher continues to argue that increasedopportunities for employee participation would stillhelp!

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7. GeneralizabilityO It refers to the scope of applicability of the research

findings in one organization setting to othersettings.

O Example: If a researchers findings thatparticipation in decision making enhancesorganizational commitment are found to be true ina variety of manufacturing, industrial and serviceorganizations, and not merely in the particular

organization studied by the researcher, then thegeneralizability of the findings to otherorganizational settings in enhanced. The moregeneralizable the research, the greater itsusefulness and value.

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8. Parsimony

O Simplicity in explaining the phenomenon orproblems that occur, and in generatingsolutions for the problems, is always preferred

to complex research frameworks that consideran unmanageable number of factors.

O For instance, if 2 or 3 specific variables in thework situation are identified, which whenchanged would raise the organizational

commitment of the employees by 45%, thatwould be more useful and valuable to themanager than if it were recommended that heshould change 10 different variables toincrease organizational commitment by 48%.

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The Building Blocks of Science

in ResearchDeduction and Inductions

Answers to issues can be found either by the process ofdeduction or the process of induction, or by a combination ofthe two.

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DeductionO Deduction is the process by which we arrive at a

reasoned conclusion by logical generalization of a knownfact.

Example: we know that all high performers are

highly proficient in their jobs.If John is a high performer, we then concludethat he is highly proficient in his job

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Deductive ReasoningO Using deductive reasoning,

one starts with a given theory

as the basis for which we

develop hypotheses and then

confirm these with specific

data acquired using

observation or

experimentation

O (Is our theory valid or not?)

Theory

Hypotheses

Observation

Confirmation

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Induction

O

Induction is a process where we observecertain phenomena and on this basis arriveat conclusions.

In other words, in induction welogically establish a generalproposition based on observed facts.

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Inductive Reasoning

Using inductive reasoning,

one starts with a specificobservation as the basis

for which we develop a

general pattern and

tentative hypothesis as the

foundation of a theory

Observation

Pattern

Tentative Hypothesis

Theory

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Major Steps in Research Process