Defining The Research Problem: FINA262 Financial Data Analysis

DEFINING THE RESEARCH
PROBLEM
FINA262
Financial Data Analysis
1. WHAT IS A RESEARCH PROBLEM?
 A research problem, in general, refers to some difficulty

which a researcher experiences in the context of either a
theoretical or practical situation and wants to obtain a
solution for the same.
 Usually we say that a research problem does exist if the
following conditions are met with:
 (i) There must be an individual (or a group or an organisation), let
us call it ‘I,’ to whom the problem can be attributed. The
individual or the organisation, as the case may be, occupies an
environment, say ‘N’, which is defined by values of the
uncontrolled variables, Yj.
 (ii) There must be at least two courses of action, say C1 and C2, to
be pursued. A course of action is defined by one or more values of
the controlled variables. For example, the number of items
purchased at a specified time is said to be one course of action.
 (iii) There must be at least two possible outcomes, say O1 and O2,
of the course of action, of which one should be preferable to the
other. In other words, this means that there must be at least one
outcome that the researcher wants, i.e., an objective.
 (iv) The courses of action available must provides some chance of
obtaining the objective, but they cannot provide the same chance,
otherwise the choice would not matter.
COMPONENTS OF A RESEARCH PROBLEM
(i) There must be an individual or a group which has some difficulty or the
problem.
(ii) There must be some objective(s) to be attained at. If one wants nothing,
one cannot have a problem.
(iii) There must be alternative means (or the courses of action) for obtaining
the objective(s) one wishes to attain. This means that there must be at least
two means available to a researcher for if he has no choice of means, he
cannot have a problem.
(iv) There must remain some doubt in the mind of a researcher with regard to
the selection of alternatives. This means that research must answer the
question concerning the relative
efficiency of the possible alternatives.
(v) There must be some environment(s) to which the difficulty pertains.

SELECTING THE PROBLEM
 the following points may be observed by a researcher in

selecting a research problem or a subject for research:
 (i) Subject which is overdone should not be normally
chosen, for it will be a difficult task to throw any new
light in such a case.
 (ii) Controversial subject should not become the choice
of an average researcher.
 (iii) Too narrow or too vague problems should be
avoided.
 (iv) The subject selected for research should be familiar
and feasible so that the related research material or
sources of research are within one’s reach.
 (v) The importance of the subject, the qualifications and
the training of a researcher, the costs involved, the time
factor are few other criteria that must also be considered
in selecting a problem.
 (vi) The selection of a problem must be preceded by a
preliminary study. This may not be necessary when the
problem requires the conduct of a research closely
similar to one that has already been done. But when the
field of inquiry is relatively new and does not have
available a set of well developed techniques, a brief
feasibility study must always be undertaken.
NECESSITY OF DEFINING THE PROBLEM
 Quite often we all hear that a problem clearly stated is a
problem half solved. This statement signifies the need for
defining a research problem. The problem to be
investigated must be defined unambiguously for that will
help to discriminate relevant data from the irrelevant ones.
A proper definition of research problem will enable the
researcher to be on the track whereas an ill-defined
problem may create hurdles. Questions like: What data are
to be collected? What characteristics of data are relevant
and need to be studied? What relations are to be explored.
What techniques are to be used for the purpose? and
similar other questions crop up in the mind of the
researcher who can well plan his strategy and find answers
to all such questions only when the research problem has
been well defined.
TECHNIQUES INVOLVED IN DEFINING A
PROBLEM
 the research problem should be defined in a systematic
manner, giving due weightage to all relating points. The
technique for the purpose involves the undertaking of the
following steps generally one after the other:
 (i) statement of the problem in a general way;
 (ii) understanding the nature of the problem;
 (iii) surveying the available literature
 (iv) developing the ideas through discussions; and (v)

rephrasing the research problem into a working
proposition.
 (i) Statement of the problem in a general way: First of
all the problem should be stated in a broad general way,
keeping in view either some practical concern or some
scientific or intellectual interest.
 (ii) Understanding the nature of the problem: The
next step in defining the problem is to understand its
origin and nature clearly. The best way of understanding
the problem is to discuss it with those who first raised it
in order to find out how the problem originally came
about and with what objectives in view. If the researcher
has stated the problem himself, he should consider once
again all those points that induced him to make a general
statement concerning the problem.
 (iii) Surveying the available literature: All available
literature concerning the problem at hand must necessarily
be surveyed and examined before a definition of the research
problem is given. This means that the researcher must be
well-conversant with relevant theories in the field, reports
and records as also all other relevant literature.
 (iv) Developing the ideas through discussions: Discussion
concerning a problem often produces useful information.
Various new ideas can be developed through such an
exercise. Hence, a researcher must discuss his problem with
his colleagues and others who have enough experience in the
same area or in working on similar problems. This is quite
often known as an experience survey. People with rich
experience are in a position to enlighten the researcher on
different aspects of his proposed study and their advice and
comments are usually invaluable to the researcher.
 (v) Rephrasing the research problem: Finally, the
researcher must sit to rephrase the research problem into
a working proposition. Once the nature of the problem
has been clearly understood, the environment (within
which the problem has got to be studied) has been
defined, discussions over the problem have taken place
and the available literature has been surveyed and
examined, rephrasing the problem into analytical or
operational terms is not a difficult task. Through
rephrasing, the researcher puts the research problem in
as specific terms as possible so that it may become
operationally viable and may help in the development of
working hypotheses.
AN ILLUSTRATION
 The technique of defining a problem outlined above can be illustrated for
better understanding by taking an example as under:
 Let us suppose that a research problem in a broad general way is as follows:
“Why is productivity in Japan so much higher than in India”? In this form
the question has a number of ambiguities such as: What sort of productivity is
being referred to? With what industries the same is related? With what period
of time the productivity is being talked about? In view of all such ambiguities
the given statement or the question is much too general to be amenable to
analysis. Rethinking and discussions about the problem may result in
narrowing down the question to: “What factors were responsible for the
higher labour productivity of Japan’s manufacturing industries during
the decade 1971 to 1980 relative to India’s manufacturing industries?”
This latter version of the problem is definitely an improvement over its earlier
version for the various ambiguities have been removed to the extent possible.
Further rethinking and rephrasing might place the problem on a still better
operational basis as shown below: “To what extent did labour productivity
in 1971 to 1980 in Japan exceed that of India in respect of 15 selected
manufacturing industries? What factors were responsible for the
productivity differentials between the two countries by industries?”

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DEFINING THE RESEARCH

 A research problem, in general, refers to some difficulty

(v) There must be some environment(s) to which the difficulty pertains.

 the following points may be observed by a researcher in

 (ii) understanding the nature of the problem;

 (iii) surveying the available literature

 (iv) developing the ideas through discussions; and (v)

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