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Business Research Methods Lecture Notes 1 Sep 2016
Business Research Methods Lecture Notes 1 Sep 2016
Business Research Methods Lecture Notes 1 Sep 2016
INTRODUCTION
• If you discover that auditors lack independence, one can carry out a research to
understand the reasons
• If there is an observation that interests rates continue to be high despite many players in
the financial industry, one can carry out an investigation to understand the phenomenon
• If there are high failure rate of start up entrepreneurs, one can carry
out a research to find out reasons
• The hypothesis is then tested and a conclusion is made based on the hypothesis
testing which results in new knowledge.
• The difference between the manager who uses common sense alone to
analyze and make a decision in a given situation, and the investigator
who uses a scientific method, is that the latter does a systematic
inquiry into the matter and proceeds to describe, explain, or predict
phenomena based on data carefully collected for the purpose
Accounting
• Evaluating the effectiveness of short term and long term cashflow strategies
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Examples
Finance
• Explaining the operations of financial institutions
• Investigating the behaviour of stock exchange
• Reviewing the performance of treasury bill market
• Investigating the discrepancy between borrowing and lending rates
• Investigating the impact of required reserve ratio on banks
performance
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Examples
Management
• Investigating Employee Attitude and Behaviour
• Investigating The impact of Corporate Environmental Management
• Determining Strategy Formulation
• Providing a solution to Information Systems problem
• Investigating efficiency in Production and supply chain Management
• Investigating gender in accounting profession
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Examples
Marketing
• Opportunity assessment
• Benefits and lifestyle studies
• Target market analysis
• Test marketing
• Customer satisfaction
• Logistics assessment
• Sales forecasting
• Product analysis
• Product packaging
• Advertising effectiveness
• Managers are also able to read and sift through published research
discriminately
• 3. Appreciate and be constantly aware of the multiple influences and multiple effects of
factors impinging on a situation.
• 4. Take calculated risks in decision making, knowing full well the probabilities associated
with the different possible outcomes.
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Managers & Research
• Thus, it is research done with the intention of applying the results of the findings
to solve specific problems currently being experienced in the organization
• When the decision maker has substantial knowledge about the area of
investigation, enough information may exist to make informed
decision without doing information research.
• Communication Skills
• Communication skills are needed when:
• Applying for funding
• Discussing your project with supervisor
• Negotiating access to sources of data
• Conducting interviews
• Communication Skills
• Designing questionnaires
• Leading a focus group
• Writing and presenting conference papers
• Writing your report
• Writing academic journal articles
• Knowledge (or memory): ability to recall facts, nomenclature, classifications, laws and
theories; simple calculations.
• Comprehension: ability to translate data from one form to another (e.g. verbal into
mathematical); to interpret or deduce the significance of data; to solve simple problems
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Qualities of a Good Researcher
IT Skills
• SPSS
• Word processing skills
• Internet
• Spreadsheets, e.g. Excel, etc.
• Database management systems, e.g. MS-Access
• Computerized library catalogues, online and CD-ROM databases of abstracts and
indexes
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Qualities of a Good Researcher
Motivation
• There are many ethical dilemmas in research process, and these arise
from issues of objectivity or accuracy, misrepresentation of research
finding or reporting, confidentiality, conflict of interest and privacy,
• 1. The research information user (decision maker, sponsoring client, management team,
practitioner)
• This demands rigour. Thus researchers must state their findings with
accuracy and confidence
• Thus the design of the research should be in a manner that ensures that the
findings are as close to reality as possible, so that we can place reliance or
confidence in the results (Uma Sekaran).
• Precision refers to the closeness of the findings to reality based on a sample.
• Precision reflects the degree of accuracy of the results on the basis of the sample,
to what really exists in the universe.
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The Building Blocks of Research
• The more generalizable the research, the greater its usefulness and
value.
• For example, we can link leadership style (concept) with motivation (another
concept) in the following statement:
• Another example
• ‘female traffic officers are less corrupt than male counterparts’ has two concepts –
gender and corruption
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Theory in Research
• In the traffic police officers example, the theory is explaining how gender relates to
corruption. The prediction is that if all traffic officers are male, corruption will be terrible
(direction)
• A theory might state: price reduction leads to more sales. The prediction is that if prices
increase sales will decrease
• This logical understanding helps the researcher to know what ‘concepts’ or themes
that need to be included in the study
• Theory also helps to understand how the concepts relate to one another and how
they can be analysed
• For example: an observed fact can be: All traffic police officers are
corrupt
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Developing Theory
• We may observe the conduct of all traffic police officers and through
careful analyse may conclude that the officers are corrupt.
Age
Demand for
Income
Insurance Services
Occupation
State of the
Economy
•
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Theoretical Framework
• Then identify the variables that contribute to the problem through interviews and literature
review
• The probability of cancer victims successfully recovering under treatment was studied
by a medical researcher in a hospital. She found three variables to be important for
recovery.
• Early and correct diagnosis by the doctor.
• A variable can be discrete i.e. nominal i.e. categorical like gender or size
• The dependent variable is hence first quantified and measured as well as those variables that
influence it
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Dependent Variable
• There can be one dependent variable or two or more dependent variables in a study
• The change in the dependent variable is accounted for by the independent variable
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Moderating Variable
• The moderating variable is one that has a strong contingent effect on the
independent variable–dependent variable relationship.
• List and label the variables in this and the following exercise and
explain and diagram the relationships among the variables.
• An intervening variable is one that surfaces between the time the independent
variables start operating to influence the dependent variable and the time their impact
is felt on it.
• Workforce diversity influences organisation effectiveness. However this only happens if they
is a creative synergy at the time work is being done. Regardless this can only be done is
managers have the expertise to harness the synergy and in the diversity
• She doubts, however, if an increase of pay scales would raise the morale of all
employees. Her conjecture is that those that have extra incomes will just not be
turned on by higher pay, and only those without side incomes will be happy
with increased pay with resultant boost of morale.
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Hypothesis Development
• The results of these tests offer us some clues as to what could be changed
in the situation to solve the problem.
• If then formats
• Students who are committed will pass exams
• Employees who are more healthy will take sick leave less frequently
• Directional and Non directional formats
• The greater the stress experienced in the job, the lower the job satisfaction of
employees.
• Women are more motivated than men
Select the
Determine the Execute the Communicate
Appropriate
research Research the Research
Research
Problem Design Results
Design
• At this point researchers assist the managers in making sure that the problem or
opportunity has been correctly defined and that the decision maker is aware of the
information requirements
• A gap exists between the way things are now and the way things
ought to be
• The situation analysis will involve bringing about a better perspective on the
decision makers need, the complexity of the problem situation and the type of
factors involved In situation analysis you study all aspects.
• Decision Statement
• A decision statement is a written expression of the key question that the research
user wishes to answer
• Examples:
• In what ways can we improve our service quality
• What things can be done to improve competitive positioning of our new product
• Do our marketing strategies need to be modified to increase satisfaction among our
current and future customer segments
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Problem Definition
• Through this you will develop insight as to what you think the manager
believes the problem is
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Research Objectives
• Example DS: What things can be done to improve competitive positioning of our
new product
• Objective: determine reasons why customers choose our product
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Research Questions
• For instance, we would ideally like to see zero defects, low inventory
of unsold goods, high share quotation in the stock market, and so on.
• Neglecting theory you increase the likelihood that you will fail to
understand the data obtained or be unable to interpret and integrate
the findings of the project with findings obtained by others
• Research design is the plan of the method of how the data will be collected
and how the data will be analysed
• It is a master plan of the methods to be used to collect and analyse the data
• The decisions in this phase include the type of data to be collected, what
approach will be used to collect the data, how are we going to obtain samples,
what budget is required and what will be the schedule of the activities
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Research Design
• Research objectives can be met by using the three types of research designs
• The research designs are:
• Exploratory Research Designs
• Descriptive Research Designs
• Causal or Experimental Research Designs
• The research objectives and the required variables and attributes determine which
type of research design will be appropriate
• Classification of Data
• To select the appropriate research design it is necessary to understand
the type of data to be collected
• There are two classification of data in research:
• Primary Data
• Secondary Data
• Primary data is raw data obtained for the first time. It is firsthand type
of data obtained through some type of research process
• Descriptive research designs is research that uses scientific methods and procedures
to collect raw information and create data structures that describe the existing
characteristics of a defined target population
• Descriptive research design are used when the research objectives emphasizes
describing or measuring variables
• If the research questions focuses on issues to identify who, what, where, when, or
how elements of the target population then descriptive research is appropriate
• Information for addressing why questions are obtained with causal research
designs
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Causal Research
• Triangulation
• To substantiate data
• Study different aspects
• e.g. study micro and macro aspects
• Solving a puzzle
• Methods for collecting and interpreting data can also be categorised as quantitative
or qualitative
• In quantitative research the research problems are typically well defined and
the information requirements are precise
• The objective of qualitative research is to gain preliminary insights into research problems
• Qualitative research lack a critical element of reliability and the results cannot be
generalised (or infer data to the population)
• Qualitative research tends to focus on collection of detailed amounts of primary data from
relatively small samples of subjects
• Data for Qualitative research can be collected within a short period of time but it is difficult
to quickly summarise the data into meaningful findings
• Qualitative research can provide researchers with initial ideas about specific problems or
opportunities, theories, models
• It focuses on how a persons behaviour is shaped by the relationships she has with
the physical environment objects people and situations
• It attempts to describe the experiences, reflect upon them and interpret them
• In depth interview asks many questions and probes responses for further
elaboration
Surveys
• Surveys are research design procedures for collecting large amounts of raw
data using interviews or questionnaires
• Types of surveys
• Survey types refer to the methods of collecting or gathering primary data.
• Sampling Errors
• Sampling error is the statistically measured difference between the
actual sample results and the true population results. These are errors
that occur due to fluctuations in the data
• Sampling error can be reduced by increasing the size of the sample
taken
Respondents Errors
• Occurs when respondents either cannot be reached to participate in
the survey process, do not cooperate, are unwilling to participate or
respond incorrectly or in an unnatural way to the questions asked in
the survey
• They include non response errors due to refusal or non contact
• They also include response bias due to deliberate falsification or
unconscious misrepresentation due to mental set or presitege
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Systematic Errors
CASE STUDY
A phenomenon could be
• An event like work place accident,
• People like young upward mobile individuals, or
politicians,
• Process for example recruitment of women in rural banking,
• Political participation
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Case Study
• Documentation
• Archival records
• Interviews
• Physical artifacts
• Direct observations
• Participant-observation
• Each data source is one piece of the “puzzle,” with each piece
contributing to the researcher’s understanding of the whole
phenomenon.
• This convergence adds strength to the findings as the various
strands of data are braided together to promote a greater
understanding of the case (Baxter and Jack , 2008)
• 1. Extreme/Deviant cases
• 3. Critical cases
• Multiple case studies are more preferable than single case studies
• Case study can be holistic where the case is studied as whole
• Case study can also be embedded where sub units of the whole are
studied
• Cases can also be at micro level or macro level or a combination of
micro and macro level
• The most popular case studies are for organisations and case
studies include marketing, finance, human resources, MIS
and strategy phenomena
• Cases can also be selected because they are intrinsic in that
the selected case is of genuine interest to the researcher and
the intention is to better understand the case (Stake 1995)
• Problem or issue
• Proposition or hypothesis (this may be or not required)
• The conceptual framework
• The research questions
• The logical scheme of linking data to hypothesis
• The criteria for interpreting finding
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Case Study Data Analysis
RESEARCH TIMESCALE
Longitudinal studies
• This is a study that can be likened to a series of snapshots or to a
diary. Data is collected at multiple points in time.
• The purpose of longitudinal studies is to examine or observe
responses or changes that occur over time
• Data from the same sample collected at different points in time
• Sampling
Secondary
Data
Grounded
theory
Research
strategies
observation Longitudinal
interviews Time
questionnai Ethnography
res horizons
Action
Research
Inductive Data
collections
Phenomenology methods
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0
Research Philosophy
• Argues that the social world of business and management is far too
complex to lend itself to theorising by definite “laws” like in the
natural sciences
• Takes into account that business situations are complex and unique, i.e.
Are a function of a particular set of circumstances and individuals.
E.G. Organisational behaviour.
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Comparison of Positivist and Interpretivist
Paradigms
Reality .
• Positivist supposes that objective truth ‘reality’ is fixed and has to be
searched
Interpretivist relises that his or her own values affect investigation and
interpretation
Since there are external variables that may affect experiemnts the positivist seks to
control these variables and the environment
The positivist will go to great lenths to diagonise the nature of research problem and
establish an explicit research deisnf to investigate the problem. Issues of sampling,
measurement, reliability and validity are critical
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In the development of theory the interpretivist seeks to understand the
nature of multiple influences of phenomena through case studies
The interpretivist does not consider that everything that happens has a
cause and that we libve in a determinist universe. There is a notion of
free will in interpretivisim
Interpretivi adapts research designs as she progressively learns through
the research process. She discovers variations among concepts. She is
not blinkered by existing theory
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MULTI METHOD APPROACH
Observation
• The Vice President in charge of Finance senses that the budgetary
process is not working as well as it should. Managers seem to be
overcautious, pad their budgets excessively, and all in all, seem to be
acting defensively. In essence, the VP observes various phenomena
and senses a problem.
Hypothesizing
• From the theory, the VP conjectures the relationships among
the factors, and one of the hypotheses is that fear of budget
cuts influences excessive padding of the budget.
Data Collection
• In this phase, the VP collects data from the other managers
anonymously through a questionnaire, on various factors
such as the extent of anxiety regarding perceived budget
cuts, concern regarding the installation of the proposed
information systems, and the like.
Data Analysis
• The VP then has the data analyzed to see if there are indeed
significant correlations between each of the different factors
and slack in the budget (i.e., the hypotheses are tested).
Deduction
• If significant correlations are in fact found, the VP would deduce (or
conclude) that misperceptions about budget cuts and the proposed
information system did indeed have an influence on the managers
padding their budgets. To solve the problem, the VP may then clarify
the real situation to the managers, allay their fears, and educate them
on how they would all benefit by proposing real- istic budgets.
Population
• Population refers to the entire group of people, events, or things of
interest that the researcher wishes to investigate.
• For example if Standard Bank wants to know the shopping habits of
its female customers, all female customers will form the population
• A population in research is the prescribed segment pertinent to the
information problem
Element
• An element is a single member of the population
• If 500 clinics in an audit research form the population, then each of
the 500 clinics is an element
• If 2 million households with prepaid ESCOM meters is the population
then each household is the element
Sample
• A sample is a subset of the population
• It comprises some members or elements selected from the population.
• By studying the sample, the researcher should be able to draw
conclusions that would be generaliseable to the population of interest.
• A sample will rarely be the exact replica of the population
Subject
• A subject is a single member of the sample just as an element is a
single member of the population
• If 35 law firms form a sample each law firm is a subject
• A subject is a member of a sample and an element of the population at
the same time
• Thus the sampling design and sample size are critical issues
in sampling
• When a sample consists of elements in the population that
have extremely high values on the variable we are studying,
the sample mean will be far higher than the true population
mean
• The more representative of the population the sample is, the more
generalizable are the findings of the research
• Probability Sampling
• Non Probability Sampling
• The same bias would arise if the list is according to gender i.e. if
every 7th MP is a female. This is called Periodicity Bias
• The advantage of systematic random sampling is that it is a relatively
easy way to draw a sample and sampling units can be drawn quickly
whilst ensuring randomness
• It is therefore economic
• When the groups or strata are decided, samples are drawn from each
of the smaller groups (stratum).
• The steps in stratified random sampling are:-
1. Divide the target population into homogenous subgroups (strata) or
segments
2. Draw samples randomly from each strata
3. Combine the samples from each strata into a single sample of the
target population
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Stratified Random Sampling