Business Research Methods

in Management

1
Degu Setegn (Ph.D)

02/28/2024
 Chapter one

Introduction to Research Methods

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 Introduction
 The recent history demonstrates the need for
information in making informed decisions
addressing key issues faced by all competitive
businesses.
 Research can provide that information.
 Without it, business decisions involving both
tactics and strategies are made in the dark.

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• Business research covers a wide range of
.

phenomena. For managers, the purpose of

research is to provide knowledge regarding the
organization, the market, the economy, or another
area of uncertainty.
• A financial manager may ask, “Will the
environment for long-term financing be better
two years from now?” A personnel manager may
ask, “What kind of training is necessary for
production employees?” or “What is the reason
for the company’s high employee turnover?” A
marketing manager may ask, “How can I monitor
my retail sales and retail trade activities?”
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• Each of these questions requires information
about how the environment, employees,
customers, or the economy will respond to
executives’ decisions.
• Can the right information be delivered? The
ultimate goal of research is to supply accurate
information that reduces the uncertainty in
managerial decision making.

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• Very often, decisions are made with little
.

information for various reasons, including cost

considerations, insufficient time to conduct
research, or management’s belief that enough is
already known.
• Occasionally there are successes, but in the long
run, intuition without research leads to losses.
• Business research helps decision makers shift
from intuitive information gathering to systematic
and objective investigation.

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 Concept and Meanings of Research
• The word research is composed of two syllabuses, re and
search.
• The dictionary defines the former as a prefix meaning
again, new or over again, and the later as a verb meaning
to examine closely and carefully, to test and try or to
probe.
• Together they form a noun describing a careful, systematic,
patient study and investigation in some field of knowledge,
undertaken to establish facts or principles.
• Research is also defined as a structured inquiry that utilizes
acceptable scientific methodology to solve problems and
creates new knowledge that is generally applicable.
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• And look at the following short definitions: Research;
.

 Is a systematic investigation to find answers to a

problem
 Is defined as a search for knowledge
 Is a scientific and systematic search for pertinent
information on a specific topic
 Is an art of investigation
 Is a movement from the known to the unknown
 Comprises defining and redefining problems,
formulating hypothesis or suggested solutions;
collecting, organizing and evaluating data; making
deductions and reaching conclusions; and last carefully
testing the conclusions to determine whether they fit
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• We can also define research as something that
.

people undertake in order to find out things in a

systematic way, thereby increasing their knowledge.
• Two phrases are important in this definition:
‘systematic way’ and ‘to find out things’.
‘Systematic’ suggests that research is based on
logical relationships and not just beliefs (Ghauri and
Grønhaug 2005).
• Generally, the following characteristics are
maintained:
 Data are collected systematically
 Data are interpreted systematically
 There is a clear purpose
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 Common definition
.

• Research is a systematic, controlled, empirical and

critical method consisting of enumerating the
problem, formulating a hypothesis, collecting the
facts or data, analysing the facts and reaching
certain conclusions either in the form of solutions
toward the concerned problem or in certain
organizations for some theoretical formulation.

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 What is Business Research?
• Business research is the application of the scientific
method in searching for the truth about business
phenomena.
• These activities include defining business opportunities
and problems, generating and evaluating alternative
courses of action, and monitoring employee and
organizational performance.
• Business research is more than conducting surveys.
This process includes idea and theory development,
problem definition, searching for and collecting
information, analyzing data, and communicating the
findings and their implications.
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• Our definition makes it clear that business research
.

is designed to facilitate the managerial decision-

making process for all aspects of the business:
finance, marketing, human resources, and so on.
• Business research is an essential tool for
management in virtually all problem-solving and
decision-making activities.
• By providing the necessary information on which
to base business decisions, research can decrease
the risk of making a wrong decision in each area.
• However, it is important to note that research is an
aid to managerial decision making, never a
substitute for it.
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 Nature of business research
It deals with business phenomena.
It aims at discovering of new facts/solving
business problems
It is a scientific undertaking
Does not involve experimentation
It is dynamic in nature
It is inter-disciplinary

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 Characteristics of Research
• From the above definitions it is clear that
research is a process of collecting, analyzing and
interpreting information to answer questions. But
to qualify as a research, a process must have
certain characteristics as listed below:
1. Systematic
• It means that research is structured with specified
steps to be taken in a specified sequence in
accordance with the well defined set of rules.

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2. Rigorous (relevant)
.

• One must be very careful (scrupulous) in ensuring that the

procedures followed to find answers to questions are
relevant, appropriate and justified.
3. Valid and verifiable
• This concept implies that whatever you conclude on the
basis of your findings, it should be correct and can be
verified by you and others.
4. Empirical
• This means that any conclusions drawn are based upon
hard evidence gathered from information collected from
real life experiences or observations.
• It implies that research is related basically to one or more
aspects of a real situation and deals with concrete data that
provides a basis forBusiness
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external validity
Research Methods to research results 15
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5. Critical
.

• The methods employed and procedures used

should be critically scrutinized. The process of
investigation must be foolproof and free from any
drawbacks. The process adopted and the
procedures used must be able to withstand critical
scrutiny.
6. Controlled
• In exploring the causality relation b/n two variables,
the study must be set in a way that minimizes the
effects of other factors affecting relationship. In
social science research, however, since controlling is
almost impossible, the effect of the other variable
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7. Replicable
.

• This characteristic allows research results to be

verified by replicating the study and thereby
building a sound basis for decisions. This is
related to verifiability and validity.
8. Logical
• This implies that research is guided by the rules
of logical reasoning and the logical process of
induction and deduction.

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 Purposes of Research
• In the business arena, research is required
because of the following reasons:
 To identify and find solutions to the problems
 To help in making decisions
 To develop new concepts
 To find alternate business strategies
 To gain a competitive advantage.
 To test new products and services.
 To reduce operational costs.
 To enhance profitability.
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 Types of Research
• Research is classified on three perspectives:
1) The Application of the research study:
Pure Research, Applied Research
2) The objective in undertaking the research:-
Descriptive research, Exploratory Research,
Explanatory Research
3) The Type of information Sought:-Qualitative and
Quantitative Research

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 A) Based on the application of the
research ( purpose and context)
1) pure/Fundamental/Basic research
 To generate a body of knowledge by trying to
comprehend how certain problems that occur in
organization and can be solved.
 Attempts to expand the limits of knowledge.
 Not directly involved in the solution to a
pragmatic problem.

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 Purpose:
.

• Expand knowledge of processes of business and

management.
• Results in universal principles relating to the
process and its relationship to outcomes.
• Findings of significance and value to society in
general
 Context:
• Undertaken by people based in universities
• Choice of topic and objectives determined by the
researcher
• Flexible time scales
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 Basic research examples
a) Is executive success correlated with high need
for achievement?
b) Are members of highly cohesive work groups
more satisfied than members of less cohesive
work groups?
c) Do consumers experience cognitive dissonance
in low-involvement situations?

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2) Applied Research
.

 A current problem facing to the manager in the

work setting and demanding a timely solution is
called applied research.
 Conducted when a decision must be made about
a specific real-life problem.
 This is an applied research which involves the
researcher diagnosing a local problem and finding
solution to it in a local setting.

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 Purpose:
.

• Improve understanding of particular business or

management problem
• Results in solution to problem
• New knowledge limited to problem
• Findings of practical relevance and value to
manager(s) in organisation(s)
 Context:
• Undertaken by people based in a variety of
settings including organisations and universities
• Objectives negotiated with originator
• Tight time scales
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 Example of applied research
• Should McDonalds add Italian pasta dinners to its
menu?
o Business research told McDonald’s it should/ not.
o “Why have profitability decreased during the last
quarter”? Applied research has a practical
problem-solving emphasis.

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 B) Based on the objective of the research

1) Exploratory Research
• undertaken with the aim of clarifying ambiguous
problems
• general problems usually known but not sufficiently
understood
• the purpose is to get more information, not to
uncover specific courses of action (subsequent)
• Determining a specific course of action to follow is
not a purpose of exploratory research!
• Example: Child-Care support programme for
employees Business Research Methods in Managemen
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 Exploratory research might involve a literature
.

search or conducting focus group interviews.

 The exploration of new phenomena in this way
may help the researcher’s need for better
understanding, may test the feasibility of a more
extensive study, or determine the best methods to
be used in a subsequent study.
 For these reasons, exploratory research is broad
in focus and rarely provides definite answers to
specific research issues.

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 .

 The objective of exploratory research is to identify

key issues and key variables. For example, one
outcome might be a better system of measurement
for a specific variable. If you define your study as
exploratory research, then you need to clearly define
the objectives.
 Calling your report “exploratory” is not an excuse for
lack of definition.
• EXAMPLE:
 An example in the business environment might be an
exploratory study of a new management technique in
order to brief a management team. This would be a
vital first step before deciding whether to embrace
the technique. Business Research Methods in Managemen
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 Exploratory research is undertaken when few or no
.

previous studies exist.

 The aim is to look for patterns, hypotheses or ideas that
can be tested and will form the basis for further
research.
 Typical research techniques would include case studies,
observation and reviews of previous related studies and
data.
 Exploratory research is often conducted in new areas of
inquiry, where the goals of the research are: (1) to scope
out the magnitude or extent of a particular
phenomenon, problem, or behaviour, (2) to generate
some initial ideas (or “hunches”) about that
phenomenon, or (3) to test the feasibility of undertaking
a more extensive study regarding that phenomenon. 29
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 .

 For instance, if the citizens of a country are

generally dissatisfied with governmental policies
regarding during an economic recession, exploratory
research may be directed at measuring the extent of
citizens’ dissatisfaction, understanding how such
dissatisfaction is manifested, such as the frequency
of public protests, and the presumed causes of such
dissatisfaction, such as ineffective government
policies in dealing with inflation, interest rates,
unemployment, or higher taxes.
 Exploratory research is particularly useful in new
product development. Sony and Honda have each
been instrumental in developing robot technology.
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 As the name implies, exploratory research is not
.

intended to provide conclusive evidence from

which to determine a particular course of action.
 In this sense, exploratory research is not an end
unto itself. Usually exploratory research is a first
step, conducted with the expectation that
additional research will be needed to provide
more conclusive evidence.
 Exploratory research is often used to guide and
refine these subsequent research efforts.

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 .

2) Descriptive research
 It is directed at making careful observations and
detailed documentation of a phenomenon of interest.
 These observations must be based on the scientific
method (i.e., must be replicable, precise, etc.), and
therefore, are more reliable than casual observations
by untrained people.
 As the name implies, the major purpose of
descriptive research is to describe characteristics of
objects, people, groups, organizations, or
environments. In other words, descriptive research
tries to “paint a picture” of a given situation by
addressing who, what, when, where, and how
questions. Business Research Methods in Managemen
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 Unlike exploratory research, descriptive studies
.

are conducted after the researcher has gained a

firm grasp of the situation being studied. This
understanding, which may have been developed
in part from exploratory research, directs the
study toward specific issues.

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 Descriptive research
.

o undertaken with the aim of determining the

characteristics of a population or phenomenon
o Previous knowledge of problem exists
o High degree of precision or accuracy required
 Examples:
 Who are the main consumers of organic foods?
 How many students read the prescribed course
literature?
 Where do most holiday-makers travelling overseas
go?
 When do petrol stations tend to raise their prices?
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3) Explanatory Research ( Correlation research)
.

 Explanatory studies look for explanations of the

nature of certain relationships.
 Hypothesis testing provides an understanding of
the relationships that exist between variables.

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 Explanatory research seeks explanations of observed
.

phenomena, problems, or behaviours.

 While descriptive research examines the what, where, and
when of a phenomenon, explanatory research seeks
answers to why and how types of questions.
 Examples include understanding the reasons behind
adolescent crime or gang violence, with the goal of
prescribing strategies to overcome such societal ailments.
 Most academic or doctoral research belongs to the
explanation category, though some amount of exploratory
and/or descriptive research may also be needed during
initial phases of academic research.
 Seeking explanations for observed events requires strong
theoretical and interpretation skills, along with intuition,
insights, and personal experience.
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• Zikmund (1984) suggests that the degree of
.

uncertainty about the research problem

determines the research methodology, as
illustrated in the Table below.

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Factors Exploratory research .

Descriptive research Explanatory research

Degree of Problem Key variables not Key variables are Key variables and
Definition defined defined key relationships are
defined

Amount of Highly ambiguous Partially defined Clearly defined

Uncertainty

Key Research Research questions Research questions Research hypothesis

Statement

Possible “Quality of service is “What have been the “Which of two

Situations declining and we
don’t know why.”
“Would people be
interested in our new
product idea?”
“How important is
business process
reengineering as a
strategy?”
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trends in training programs is
organisational more effective for
downsizing over the reducing labour
past ten years?” turnover?”
“Did last year’s “Can I predict the
product recall have value of energy
an impact on our stocks if I know the
company’s share current dividends
price?” and growth rates of
“Has the average dividends?”
merger rate for “Do buyers prefer
financial institutions our product in a new
increased in the past package?”
decade?”
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 C) Based on the types of information
sought
1) Quantitative research
 The emphasis of Quantitative research is on
collecting and analysing numerical data; it
concentrates on measuring the scale, range,
frequency etc. of phenomena.
 This type of research, although harder to design
initially, is usually highly detailed and structured
and results can be easily collated and presented
statistically.
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 Quantitative research can be numerically stated or
.

compared; may use statistical standards.

 Is highly objective and projectable.
 Quantitative research uses closed-end or forced
choice questions.
 Factual, numerical questions with short
responses that have precise and conclusive
outcomes.

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2) Qualitative research
.

 Qualitative research is more subjective in nature

than Quantitative research and involves examining
and reflecting on the less tangible aspects of a
research subject, e.g. values, attitudes, perceptions.
 Although this type of research can be easier to
start, it can be often difficult to interpret and
present the findings; the findings can also be
challenged more easily.
 Qualitative research is somewhat subjective.
 Uses a problem or open-ended, free response
format to investigate the value of programs or
probe other questions (usually informal).
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• Qualitative research is descriptive, but not
.

measurable.
• Looks at how and why.
• Yields an in-depth understanding of an issue.
• Example is a focus group.

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• As defined by Hakim, qualitative research provides
.

the: “‘individuals’ own accounts of their attitudes,

motivations and behaviour. It offers richly descriptive
reports of individuals’ perceptions, attitudes, beliefs,
views and feelings, the meanings and interpretations
given to events and things, as well as their
behaviour; displays how these are put together,
more or less coherently and consciously, into
frameworks which make sense of their experiences;
and illuminates the motivations which connect
attitudes and behaviour, the discontinuities, or even
contradictions between attitudes and behaviour, or
how conflicting attitudes and motivations are
resolved in particular choices made.”
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• Difference between quantitative and qualitative
.

Quantitative research Qualitative research

Objective is to test hypotheses that the

Objective is to discover and encapsulate
researcher generates. meanings once the researcher becomes
immersed in the data.
Concepts are in the form of distinct Concepts tend to be in the form of themes,
variables motifs, generalizations, and taxonomies.
However, the objective is still to generate
concepts.
Measures are systematically created Measures are more specific and may be
before data collection and are specific to the individual setting or
standardized as far as possible; e.g. researcher; e.g. a specific scheme of values.
measures of job satisfaction
Data are in the form of numbers from Data are in the form of words from
precise measurement. documents, observations, and transcripts.
However, quantification is still used in
qualitative research.
Theory is largely causal and is Theory can be causal or non-causal and is
deductive. often inductive.

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 Con’t
Procedures are standard, and Research procedures are
replication particular, and
is assumed. replication is difficult.

Analysis proceeds by using Analysis proceeds by extracting

statistics, themes or
tables, or charts and discussing generalisations from evidence
how and
they relate to hypotheses. organizing data to present a
coherent,
consistent picture. These
generalisations
can then be used to generate
hypotheses.

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 Based on time dimension
1) Cross-sectional Research
• One-shot or cross-sectional studies are those in
which data is gathered once, during a period of
days, weeks or months.
• Many cross-sectional studies are exploratory or
descriptive in purpose.
• They are designed to look at how things are now,
without any sense of whether there is a history
or trend at work.
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2) Longitudinal Research
.

• Research carried out longitudinally involves data collection at

multiple points in time.
• Longitudinal studies may take the form of:
a) Trend study – looks at population characteristics over time,
e.g. organisational absenteeism rates during the course of a
year;
b) Cohort study – traces a sub-population over time, e.g.
absenteeism rates for the sales department;
c) Panel study – traces the same sample over time, e.g.
graduate career tracks over the period 1990 - 2000 for the
same starting cohort.
• While longitudinal studies will often be more time consuming
and expensive than cross-sectional studies, they are more
likely to identify causal
Businessrelationships between variables. 47
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 Inductive and Deductive research
1) Inductive research
 In inductive research, the goal of a researcher is
to infer theoretical concepts and patterns from
observed data.
 Hence, inductive research is often loosely called
theory-building research

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2) Deductive research
.

 In deductive research, the goal of the researcher

is to test concepts and patterns known from
theory using new empirical data.
 Hence, deductive research is often loosely called
theory-testing research.
 Note here that the goal of theory-testing is not
just to test a theory, but also to refine, improve,
and possibly extend it.

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 .

• Fig. cycle of the research

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 Motivation of Doing Research
A desire to get a research degree along with its
consequential benefits
A desire to face the challenge in solving unsolved
problems
Desire to get intellectual joy of doing some
creative work
Desire to serve the society
Desire to get responsibility

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• In the business arena, however, research tends to be
.

undertaken in order to achieve one or more of the

following objectives:
 To gain a competitive advantage.
 To test new products and services.
 To solve a management/organizational problem.
 To provide information this may help to avoid future
business problems.
 To forecast future sales.
 To better understand shifts in consumer attitudes and
tastes.
 To enhance profitability.
 To reduce operational costs.
 To enable management to prioritize strategic options for
Business Research Methods in Managemen 52
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 The Research Process
1st) Formulation of the research problem
2nd) Extensive Literature Review
 Review of concepts and theories
 Review of previous research findings
3rd) Developing or working hypothesis
4th) Preparing research design
 -Determining Sample and Design
 -Data instrument (observation, interview,
questionnaire)
 -Data analysis method (quantitative/qualitative)
Busi ness Research Methods in
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5th) Data Collection
.

6th) Analysis of the data

7th) Generalization and Interpretation
8th) Preparing Research Report

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 .

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• Reading assignment
starting from Criteria of
Good Research

Business Research Methods in

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 Criteria of Good Research
• Good research generate dependable data
• Good research follows standards of scientific
methods
• Etc …..add from the books

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 Ethical issues in Business Research
• All professions are guided by a code of ethics that
has evolved over the years to accommodate the
changing ethics, values, and expectations of those
who hold a stake in the profession.
• Most professions have an over all code of
conduct that also governs the way they carry out
research.
• In doing any research there is an ethical
responsibility to do the work honestly and with
integrity.
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 .

• Research ethics is particularly important for

Business research specifically business and finance
research because business idea and financial data
are mostly competitive and often confidential.
• Therefore, researcher need to exercise utmost
due care in unanimously using financial data only
for his/her research.
• Thus, researchers must ensure the rights, privacy,
and welfare of the people and communities that
form the focus of their studies.

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 Ethical issues and Stakeholders
• There are many stakeholders in a research activity
so it is important to look the ethical issues for
each of the stakeholders.
1. The Participants or subjects
2. The researcher
3.The funding body

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• Participants: In social science and business
.

research participants include individuals, groups,

households, communities, firms and consumers
provide information to help the researcher to gain
understanding of a phenomenon, situation, issue
or interaction.
• There are many ethical issues concerning research
participants: These are:

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1) Seeking consent
.

• In every research it is considered unethical to

collect information with out the knowledge of
participants and their expressed willingness and
informed consent.
• All informed consent procedures must meet three
criteria:
 Participants must be competent to give consent,
 Sufficient information must be provided to allow
for a reasoned decision and
 Consent must be voluntary and unforced
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2) Privacy of participants
.

• Information sought can pose an ethical dilemma in

research.
• Certain types of information can be regarded as
sensitive or confidential by some people and thus an
invasion of privacy.
• Asking information on sexual behaviour, drug use,
marital status, income and age may be considered
to be an invasion of privacy by some.
• It is not unethical to ask these questions provided
that you tell your respondents the type of
information you are going to ask clearly and frankly
and give them sufficient time to decide if they want
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3) Must not harm the participants
.

• Is the research going to harm participants in any

way? Like discomfort, anxiety, harassment etc
• The researcher must make sure that the risk is
minimal –not greater than an ordinarily
encountered in daily life
4) Maintaining confidentiality
• Sharing information about a respondent with
others for purposes other than research is
unethical.

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Ethical issues relating researcher
.

1) Avoiding bias:
• Bias on the part of the researcher is unethical
• Bias is a deliberate attempt either to hide what
has been found in the study or to highlight
something disproportionately to its true existence
2) Using appropriate research methods
• A researcher has an obligation to use appropriate
methodology in conducting a study
• Example: Selecting a highly biased sample, using
an invalid instrument or drawing a wrong
conclusions Business Research Methods in Managemen 65
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3) Appropriate and correct reporting
.

• Using appropriate methodology but failing to

correctly report the findings is unethical
4) Appropriate use of information
• How will the information obtained from
respondent be used by the researcher? The use of
information in a way that directly or indirectly
adversely affects respondents is unethical.

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Ethical Issues regarding sponsors
.

• Most research in business is carried out using

funds provided by sponsoring organizations for
specific purpose.
• They shall not influence the methodology to be
used by researcher.
• They shall not prohibit the publication of the
findings
• In general misuse of information, unfair
impositions, controls and restriction by funding
organization are unethical in research.

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• In the Research Problem
.

 Identify a problem that will benefit individuals

being studied
• In the Purpose and Questions
 Convey the purpose and sponsors of the research
to participants

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• Ethical Issues In Data Collection
.

 Respect participants and sites

 Do not put participants at risk
 Respect vulnerable populations
 Obtain informed consent from participants
 Address issues of confidentiality
 Gain access to sites
 Make provisions for all participants to receive
benefits
 Consider reciprocity
 Interview with sensitivity
 Anticipate issues that may arise
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• Ethical Issues In Data Analysis and Interpretation
.

 Protecting anonymity/secrecy/mystery of participants

 Storing data and destroying it after a set time
 Planning for ownership of the data and not sharing
data with others
 Providing an accurate account of the data
• Ethical Issues In Writing and Disseminating Research
 Use unbiased language when describing participants
 Do not suppress, invent, or falsify findings
 Anticipate the consequence of the study on audiences
 Provide authorship to those who substantially
contribute
 Report the detailsBusiness
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of theResearchresearch fully and honestly 70
Methods in Managemen
END OF THE CHAPTER

Business Research Methods in Managemen 71

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