Research Methods for Business

Lecture 01: Introduction to

Research Methods:
Basic Concepts
Dr. Ghulam Dastgeer
0333-5111469
hellodastgeer@gmail.com
Air University, Islamabad

Why do we need
Research?

 Whereas a calculator on ENIAC is

equipped with 18,000 vacuum tubes
and weighs 30 tons, computers in the
future may have only 1,000 vacuum
tubes and perhaps only 1.5 tons.
- The Popular Mechanics
- March 1949

 I can think of no conceivable reason

why an individual should wish to
have a computer in his own home
- Kenneth Olsen, Chairman, Digital
Equipment Corporation, 1977

Duration taken to double

knowledge

Year

Duration taken to double knowledge

1500
1500 years
1800
300 years
1900
100 years
1940
20 years
1970 7 years
2020 72 days

American Society of Training and Development

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

 Over 90% of the relevant literature in many

technical fields, such as biotechnology,
astronomy, computers and software, and
environmental sciences, produced from 1985 2000.

J B Quinn (2001)

Why Study Research?

The primary purpose is advancement
of human knowledge
Research provides you with the
knowledge and skills needed for the
fast-paced decision-making
environment

What is RESEARCH
Research is the process of finding
solutions to a problem after a thorough
study and analysis of the situational
factors.
Enquiry is aimed at understanding a
thing or phenomenon or solving a
problem
Research is an art of scientific
investigation.

What is Business Research

Business research method is a systematic and
scientific procedure of data collection, compilation,
analysis, interpretation, and implication pertaining
to any business problem.
Business research is an organized systematic, databased, critical, objective, scientific inquiry or
investigation into a specific problem, undertaken
with the purpose of finding answers or solutions to
it.
Research provides the needed information that
guides managers to make decisions to successfully
deal with problems.

Business Researchers
Business researchers systematically
collect, compile, analyze, and
interpret data to provide quality
information based on which a
decision maker will be able to take a
decision in an optimum manner.

Fields Where Business Research is Often Used

(1)
General Business Conditions and
Corporate Research

Short- & Long-Range Forecasting,

Business and Industry Trends
Global Environments
Inflation and Pricing
Plant and Warehouse Location
Acquisitions

Financial and Accounting

Research

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

Forecasts of financial interest rate

trends,
Stock,bond and commodity value
predictions
capital formation alternatives
mergers and acquisitions
risk-return trade-offs
portfolio analysis
impact of taxes
research on financial institutions
expected rate of return
capital asset pricing models
credit risk
cost analysis

Fields Where Business Research is Often Used (2)

Information Systems Research

Sales and Marketing Research

Market Potentials
Market Share
Market segmentation
Market characteristics
Sales Analysis
Establishment of sales quotas
Distribution channels
New product concepts
Test markets
Advertising research
Buyer behaviour
Customer satisfaction
Website visitation rates

Knowledge and information needs

assessment
Computer information system use and
evaluation
Technical suppot satisfaction
Database analysis
Data mining
Enterprise resource planning systems
Customer relationship management
systems
Corporate Responsibility Research

Ecological Impact
Legal Constraints on advertising and
promotion
Sex, age and racial discrimination /
worker equity
Social values and ethics

Types of Business Research

Classification # 1
Descriptive Research
Explanatory research
Exploratory Research

Classification # 2
Basic
Applied

Classification # 3
Qualitative
Quantitative

Classification # 4
Cross-sectional studies
Longitudinal studies

Exploratory Research
An exploratory study is undertaken when not much is know
about the situation at hand, or no information is available on
how similar problem or research issues have been solved in the
past.
An exploratory study is a valuable means of finding out what is
happening; to seek new insights; to ask questions and to assess
phenomena in a new light (Robson 2002:59).
In such cases, extensive preliminary work needs to be done to
gain familiarity with the phenomena in the situation.
Some qualitative studies where data are collected through
observation or interviews, are exploratory in nature. When data
reveal some pattern regarding the phenomenon of interest,
theories are developed and hypotheses formulated for
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subsequent testing.

In exploratory studies, the researcher is basically interested in

exploring the situational factors so as to get a grip on the
characteristics of the phenomena of interest.
Doing a study for the first time in a particular organization
does not make the research exploratory in nature
There are three principal ways of conducting exploratory research:
a search of the literature;
interviewing experts in the subject;
conducting focus group interviews.

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Descriptive
A descriptive study is undertaken in order to ascertain and be able to
describe the characteristics of the variable of interest in the situation.
The object of descriptive research is to portray an accurate profile
of persons, events or situations (Robson 2002:59).
It is necessary to have a clear picture of the phenomena on which
you wish to collect data prior to the collection of the data.

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 Examples:
What is incidence of project failure in Pakistan?
Describe what is going on or exists.
Description of characteristics of a group of employees, like, the
age, educational level, job status, and length of service, nationality
etc.
A study of a class in terms of the percentage of members who are
in their senior or junior years, sex composition, age groupings,
number of semesters left until graduation etc.
Descriptive studies are undertaken when the characteristics or the
phenomena to be tapped in a situation are known to exist, and one
wants to be able to describe them better by offering a profile of
the factors.

Explanatory Research
Studies that establish causal relationships between variables may be
termed explanatory research. The emphasis here is on studying a
situation or a problem in order to explain the relationships between
variables.
Explanatory research answers why and how of the phenomenon through
hypotheses and theories
Uses theory
Much of the research published in journals is explanatory
.

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 Example:
Impact of job satisfaction on performance of projects
You may find, for example, that a cursory analysis of
quantitative data on manufacturing scrap rates shows a
relationship between scrap rates and the age of the
machine being operated. You could go ahead and subject
the data to statistical tests such as correlation in order to
get a clearer view of the relationship. Alternatively, or in
addition to, you might collect qualitative data to explain
the reasons why customers of your company rarely pay
their bills according to the prescribed payment terms

Applied research
Is to solve a current problem faced by the manager in the work setting,
demanding a timely solution.
This research is done with the intention of applying the results of the
findings to solve specific problem currently being experienced in an
organization.
Example:
Should a corporation adopt a paperless office environment?
Should McDonalds add Italian pasta dinners to its menu?
Should Procter & Gamble add a high-priced home teeth bleaching kit to
its product line?
Research showed Crest Whitestrips would sell well at a retail price of $44

Basic research (fundamental, pure)

Is to generate a body of knowledge by trying to comprehend how certain
problems that occur in organizations can be solved.
The findings of such research contribute to the building of knowledge in
the various functional areas of business.
Generally not related to a specific problem and its findings cannot be
immediately applied.
Purpose is to generate more knowledge and understanding of the
phenomena of interest and to build theories based on the research
results.
Mostly performed by academics
Example:
A MS/PhD student research
How does motivation affect employee performance?
Is executive success correlated with high need for achievement?

Quantitative Vs
Qualitative
Quantitative

Qualitative

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

 Cross-sectional studies are carried

out once and represent a snapshot of
one point in time
Longitudinal studies are repeated
over an extended period

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.

Manager and Research

Why is it important for managers to
know about research?
Solve problems
Decision making tool
Competition
Risk
Investment
Hire researchers and consultants more
effectively

The 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 there
from.
It can be applied to both basic
and applied research.

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.

What is Good Research?

The main distinguishing characteristics
of scientific research are:
1. Purposiveness
2. Rigor
3. Testability
4. Replicability
5. Precision and Confidence
6. Objectivity
7. Generalizability
8. Parsimony

 Purposiveness
The manager has started research with a definite aim
or purpose.
Example: The focus is on increasing the commitment
of employees to the organization.

2. Rigor
A good theoretical base and sound methodological design would add
rigor to the purposive study.
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.

3. Testability:
Scientific research lends itself to testing
logically developed hypotheses to see whether
or not the data support the hypotheses that are
developed after a careful study of the problem
situation.

4. Replicability
It means that it can be used again if similar circumstances
prevails.
Our hypotheses have not been supported merely by chance,
but are reflective of the true state of affairs in the population.

5. Precision and Confidence

Precision
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 researchers 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 or 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 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

Deductive Reasoning
Theory

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

(Is our theory valid or not?)

Hypotheses

Observation

Confirmation

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.

Inductive Reasoning
Observation

Pattern

Tentative Hypothesis

Theory

Using inductive
reasoning, one starts
with a specific
observation as the
basis for which we
develop a general
pattern and tentative
hypothesis as the
foundation of a theory

Major Steps in Research Process