Research Methods for Business Lecture 01: Introduction to Research Methods: Basic Concepts

Dr. Ghulam Dastgeer 0333-5111469 hellodastgeer@gmail.com International Islamic University, Islamabad

Why do we need Research?

O 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

O 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
O 1500 O 1800 O 1900 O 1940 O 1970 O 2020

Duration taken to double knowledge

1500 years 300 years 100 years 20 years 7 years 72 days

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

O 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?

O The primary purpose is advancement of

human knowledge O Research provides you with the knowledge and skills needed for the fastpaced decision-making environment

What is RESEARCH
O Research is the process of finding

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

What is Business Research

O 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 or investigation into a specific problem, undertaken with the purpose of finding answers or solutions to it. O Research provides the needed information that guides managers to make decisions to successfully deal with problems.

Business Researchers
O 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
O O O O O O O

Financial and Accounting Research 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

Short- & Long-Range Forecasting, Business and Industry Trends Global Environments Inflation and Pricing Plant and Warehouse Location Acquisitions

O O O O O O O O O O O

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

Fields Where Business Research is Often Used (2)

Sales and Marketing Research
O O O O O O O O O O O O O

Information Systems Research

O O O O O O O

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

O O

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

Types of Business Research

O Classification # 1
O Descriptive Research O Explanatory research O Causal research

O Classification # 2 O Basic O Applied O Classification # 3 O Qualitative O Quantitative O Classification # 4 O Cross-sectional studies O Longitudinal studies

Descriptive Research O Undertaken in order to ascertain and be able to describe the characteristics of the variables of interest in a situation. O Descriptive research describes a single event or characteristic or relates a few events or variables through 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 of service, nationality etc. O Estimate how groups of project managers might behave

Explanatory Research O Explanatory research answers why and how of the phenomenon through hypotheses and theories O Uses theory O Much of the research published in journals is explanatory O Example: Impact of job satisfaction on performance of projects

Causal Research O Causal study is how one variable produces changes in another

Applied research O Is to solve a current problem faced by the manager in the work setting, demanding a timely solution. O 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: 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

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 the phenomena of interest and to build theories based on the research results. O Mostly performed by academics Example:
O O O

A MS/PhD student research How does motivation affect employee performance? Is executive success correlated with high need for achievement?

Quantitative Vs Qualitative
Quantitative Objective Research questions: How many? When? Where? Strength of association? Test theory Hypothesis Measurable Report statistical analysis. Basic element of analysis is numbers Reasoning is deductive Uses instruments Qualitative Subjective Research questions: What? Why? How

Develop theory Research questions Interpretive Report rich narrative, individual; interpretation. Basic element of analysis is words/ideas. Reasoning is inductive Uses communications and observation

O Cross-sectional studies are carried out

once and represent a snapshot of one point in time

O Longitudinal studies are repeated over an

extended period

Other Types of Research

Case Studies: O 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. O 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.

Statistical studies: O Attempt to capture a populations characteristics by making inferences from a samples characteristics

Manager and Research

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

The Scientific Research

O 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. O It can be applied to both basic and applied research.

Why Scientific Research?

O This research is not based on hunches,
O O

O O O

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?

O 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

O 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 O A good theoretical base and sound methodological design would add rigor to the purposive study. O 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: O 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 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 the true state of affairs in the population.

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 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 O Confidence refers to the probability that our estimations are correct. O 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. O 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 O It refers to the scope of applicability of the research findings in one organization setting to other settings.
O 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 O 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.
O 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
O 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
O Using deductive reasoning,

Hypotheses

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?)

Observation

Confirmation

Induction
O 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
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

Pattern

Tentative Hypothesis

Theory

Major Steps in Research Process