Day 1.ppt

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 slowselling 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. 2. 3. 4. 5. 6. 7. 8.

Purposiveness Rigor Testability Replicability Precision and Confidence Objectivity Generalizability 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. 2. 3.

Based on few employees Bias and incorrectness 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

Precision and 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.