INTRODUCTION TO BUSINESS RESEARCH

BUSINESS RESEARCH METHODS

Resource Person: Ayesha Farooqui

PROGRAMS

M.Com, Semester 1st & 2nd

M.Sc., Semester 1st, 2nd & 3rd

M.Sc. (Evening), Semester 2nd

NATIONAL COLLEGE OF BUSINESS ADMINISTRATION & ECONOMICS

EAST CANAL CAMPUS

Lahore
BUSINESS RESEARCH METHODS | Ayesha Farooqui

INTRODUCTION TO BUSINESS RESEARCH

“Research is a point of view, an attitude of inquiry or a frame of mind. It asks questions which have hitherto (up till now) not been asked and it seeks to answer them by following a fairly definite procedure. It is not a mere theorizing, but rather an attempt to elicit fact and to face them once they have assembled”

 R.R. Rusk---

BUSINESS RESEARCH METHODS | Ayesha Farooqui

What is Research?

In simple words Re-search means “Search again”

OR

“It is a process if gathering information to answer a question”

What is Business Research?

-In simple words it is a systematic and objective process of: Gathering, recording and analyzing data for making good business decisions.

-Business research is defined as the systematic and objective process of generating information for aid in making business decisions.

Business Research Method

-Business research method is a systematic and scientific procedure of data collection, compilation, analysis, interpretation, and implication pertaining to any business problem.

-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.

Examples of Business Research

·What is the best strategy to promote a particular product? (Marketing)

·What are the main reasons for employee turnover? (HRM)

·What is the rate of return on particular investment? (finance)

BUSINESS RESEARCH METHODS | Ayesha Farooqui

Why to Study Research

The best reason for learning about research methods is that these methods are used by Managers to answer questions regarding day to day business problems. Following are some other implications of the research

1.Management is a Science: Management is a science to gather and interpret information in order to make effective decisions.

2.Reduce Uncertainty: The prime managerial value of business research is that it reduces uncertainty by providing the required information and improves the following four stages of decision making:

a.Identifying problems and opportunity.

b.Diagnosing and assessing problems or opportunities.

c.Selecting and implementing a course of action.

d.Evaluating the course of action.

3.Conducting a study: Research methods course is very useful for you as you have to do your master’s thesis in order to complete your degree requirement and it can be helpful to you at some time in the future because being a professional everyone wants to read and understand the most recent research in order to be up-date their profession.

4.Reading and evaluating other people’s study: A grasp of research terminology will allow you to read and understand research articles and critically evaluate them. Rather than reading a summary of someone else’s research in a magazine, news-paper, or textbook, you can read the original article your-self and draw your own conclusions.

5.Understanding brief descriptions of studies: A research method course will help you understand abbreviated descriptions of studies given as evidence supporting some conclusion or theory.

6.Thesis is based on Research: Besides all the business related benefits of the research studies, it is also useful for your academic requirement of thesis as being compulsory for your degree.

7.Making decisions in our daily lives: Besides becoming a researcher, to be an effective participating member of the 21st century one must understand the research process in order to evaluate and act on research results.

8.Being a better thinker: Research methodology will improve your thinking as it is a logical and objective method of finding answers to questions which may apply to all aspects of life.

9.Secrets of success: Finally as described by Aristotle: “The secret of success is to know something nobody else knows”.

BUSINESS RESEARCH METHODS | Ayesha Farooqui

Theory

“Theory is a standardized principle on which basis we can explain the relationship between two or more concepts or variables.”

OR

"A system of generalizable statements that are logically linked together to understand or predict human phenomena."

For example,

As such theory is a systematic and general attempt to explain something like;

§Why do people commit crimes?

§How do the media affect us?

§Why do some people believe in God?

Purpose of Theory

·Prediction about the relationship among the variables and,

·Understanding the association among the concept

Scientific Business Researchers Operate at Two Levels

1.Abstract level

-At the abstract level, Concepts and propositions are the elements of theory.

-In theory development, the level of knowledge expressing a concept that exists only as an idea or a quality apart from an object

2.Empirical level

-At the empirical level theory is concerned with variables and testable hypothesis, the empirical counterparts of concepts and propositions.

-Level of knowledge reflecting that which is verifiable by experience or observation.

BUSINESS RESEARCH METHODS | Ayesha Farooqui

Theory

Proposition

Hypothesis

Concept

Variable

Abstract

Empirical

Figure 1: levels of Theory

THEORY APPROACHES

There are two types of research theory approaches that are as follows:

INDUCTIVE APPROACH

-Induction involves observation and investigation into the relationship between meanings and actions of human subjects

-In inductive reasoning, moves from specific observations to broader generalizations and theories. Informally, we sometimes call this a "bottom up"approach.

-Data is collected without proior assumptions about catgorization and measurement

For Example:

§“All managers that have ever been seen are human beings, therefore all managers are human beings.” This statement is true.

§“Harold is a grandfather. Harold is bald. Therefore, all grandfathers are bald.” The conclusion does not follow logically from the statement.

DEDUCTIVE APPROACH

-Deductive reasoning works from the more general to the more specific. Sometimes this is informally called a "top-down" approach.

BUSINESS RESEARCH METHODS | Ayesha Farooqui

For Example

·The book is on the table. The table is on the floor. Therefore, the book is above the floor.

·All men are mortal. Mr. A is a man. Therefore, Mr. A is a mortal.

·The argument, “All bald men are grandfathers. Harold is bald. Therefore, Harold is a grandfather,” is valid but it is untrue because the original statement is false.

BUSINESS RESEARCH METHODS | Ayesha Farooqui

Figure 2: Deductive Reasoning

Theory

Hypothesis

Data Collection

Findings

Hypothesis confirmed or rejected

Revision of theory

Figure 3: Inductive Reasoning

1. General

Research

Questions

2. Data

Collection

3.Findings

4.Generation of Theory

BUSINESS RESEARCH METHODS | Ayesha Farooqui

CLASSIFICATION OF RESEARCH

Classification of

Research

	Application	Objective	Time	Inquiry
			Dimension	Mode
	Basic or Pure	Exploratory	Cross-	Qualitative
			sectional
	Research	research		research
			research
	Applied	Explanatory	Longitudinal	Quantitative
	Research	research	research	research
		Descriptive		Mixed
				Methods
		research
				research

1. On the basis of Application

a)Basic Research:

-“Research done mainly to enhance the understanding of certain problems that commonly occur in an organizational setting and seeking methods of solving them is called basic or fundamental research”

-Generally not related to a specific problem and its findings cannot be immediately applied.

-Basic research contributes to the body of knowledge by generating new ideas, principles and theories which may or may not be immediately utilized.

For Examples,

§University professors engage in basic research in an effort to understand and generate more knowledge about various aspects of businesses of information systems.

§How to improve the effectiveness of information systems.

§How to increase the productivity of the employees.

BUSINESS RESEARCH METHODS | Ayesha Farooqui

b)Applied Research

-“Research done with the intention of applying the results of the findings to solve specific problems currently being experienced in the organization is called applied research”

For Example,

§Reasons to find out decline in sale of certain products. Applied research is frequently descriptive research, less theory, Central and main strengths are its immediate practicalities.

§Apple’s iPod sales increased by 200% from 2001 to 2008. But the sales decreased by 6% in 2009. What is the reason for this decrease?

The question is: what will Apple do about this problem?

2.On the basis of Objective

a)Exploratory Research: The purpose of exploratory research is to seek new insights and find out what is happening. There is an attempt to ask questions and asses phenomena in a new light. A more qualitative approach often underpins this sort of enquiry and the focus is on obtaining new insights into current situations and issues.

b)Explanatory Research: This research explains a situation or problem, usually in the form of casual relationships. The focus is on 'Why?' and 'How?'.

c)Descriptive Research: This type of research sets out to provide an accurate profile of situations, people or events. It focuses on 'what?', 'when?', 'where?', and 'who?'.

3.On the basis of Time Dimension

a)Cross Sectional Research: Cross-sectional survey collects data to make inferences about a population of interest (universe) at one point in time.

b)Longitudinal Research: ‘Longitudinal’ is a broad term. It can be defined as research in which:

(1)data are collected for two or more distinct periods;

(2)the subjects or cases analyzed are the same, or at least comparable, from one period to the next; and

(3)the analysis involves some comparison of data between or among periods

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4. On the basis of Inquiry Mode

a)Quantitative Research

-"A formal, objective, systematic process in which numerical data is utilised to obtain information about the world“. It is inclined to be deductive, In that it tests theory.

-Quantitative research is used to quantify the problem by way of generating numerical data or data that can be transformed into useable statistics.

-It is used to quantify attitudes, opinions, behaviors, and other defined variables and generalize results from a larger sample population.

b)Qualitative Research

-“An informal, subjective research approach that usually emphasizes words rather than numbers in the collection and analysis of data” it is inductive in nature and generates theory.

-Qualitative research is primarily exploratory research.

-It is used to gain an understanding of underlying reasons, opinions, and motivations.

-It provides insights into the problem or helps to develop ideas or hypotheses for potential quantitative research.

-It is also used to uncover trends in thought and opinions, and dive deeper into the problem.

c)Mixed Method Research

-Mixed methods research focuses on collecting, analyzing, and mixing both quantitative and qualitative data in a single study or series of studies. Its central argument is that the use of quantitative and qualitative approaches in combination provides a better understanding of research problems than either approach alone.

BUSINESS RESEARCH METHODS | Ayesha Farooqui

	Qualitative			Quantitative	Mixed Method
The	researcher		will	The problem is best addressed by	Researcher		employ
describe research problem				understanding what factors or	either	quantitative or
by exploring a concept or				variables influence an outcome	qualitative approach to
phenomena.					writing an introduction
Researcher		have	a	Researcher advance a theory to	The introduction			may
theoretical		lens through		test, and they will incorporate	include	the	discussion
which the problem will be				substantial reviews of the literature	about	theory		that
examined.				to identify research question	predict the relationship
					in quantitative method
This theoretical orientation				Writing of introduction in form of
shape the structure of an				impersonal point of view.
introduction.

BUSINESS RESEARCH METHODS | Ayesha Farooqui

Concepts

-A concept is a generalized idea about a class of objects, attributes, occurrences, or processes that has been given a name.

-In other words a concept is an idea expressed as a symbol or in words

Variables

-Variable is a concept that corresponds to properties that can take different values

-Anything that can take on differing or varying value.

Types of Variables

vQuantitative variable

Exist in some degree along a continuum from less to more, and we can assign numbers to different individuals or objects to indicate how much variables they possess. E.g. Height, Weight, Interest, Length.

vCategorical Variables

Don’t vary in degree, amount or quantity but are qualitatively different. E.g. Eye color, Gender, Religious preference, Occupation.

Examples,

-Age and amount of interest in school. (Both are quantitative variables)

-Classroom humanism and student motivation. (Both are categorical variables)

-Amount of time and mathematic achievement.

(Amount of time – Quantitative Variable)

(Mathematic achievement – Categorical Variable)

One categorical and one quantitative variable

-Method used to teach reading and reading achievement

-Counseling approach and level of anxiety

-Student gender and amount of praise given by teacher

Two categorical variable

-Ethnicity and father occupation

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-Gender of teacher and subject taught

-Religious affiliation and political party membership.

vIndependent Variable

-A variable that is “independent of the outcome being measured. More specifically…[it is] what causes or influences the outcome” (Marczyk et al., p. 46).

-Categorical variables can also be independent variables. E.g. the number of teachers

-Independent variable is also referred to as ‘Predictor Variable’

-A variable that can manipulated or controlled by researcher

vDependent Variable

-“is a measure of the effect (if any) of the independent variable (Marczyk et al. 2005, p. 44)

-The term dependent implies “it is influenced by the independent variable (Marczyk, et al, p. 46).

-Dependent Variables are also referred to as Outcome Variables or criterion variable.

Example

§Will students who are taught by a team of three teachers learn more science than student taught by one individual teacher?

Independent Variable ------ Three Teachers

		One Individual Teacher
	Dependent Variable ------- Amount of science learning
	Independent variable		Dependent variable
	Gender		Musical aptitude
	(Categorical)		(Quantitative)
	Mathematical ability (Quantitative)		Career choice
			(Categorical)
	Gang membership		Subsequent material status
	(Categorical)		(Categorical)
	Test anxiety		Test performance
	(Quantitative)		(Quantitative)

BUSINESS RESEARCH METHODS | Ayesha Farooqui

vModerator variable

-It is secondary independent variable that has been selected for study in order to determine if it is effect the basic relationship between primary independent variable and the dependent variable.

-Moderator variables specify when certain effects will hold

Example,

§“Anxiety affects test performance, but the correlation is markedly lower for students with test taking experience”.

Independent variable = anxiety level

Moderator variable = test-taking experience

Dependent variable = test performance

vMediator Variable

-Mediator variables specify how or why a particular effect or relationship occurs.

-Mediators describe the psychological process that occurs to create the relationship, and as such are always dynamic properties of individuals (e.g., emotions, beliefs, behaviors).

-It explains the relationship between the dependent variable and the independent variable.

-It speak to how or why such effects occur.

For Example,

Parents transmit their social status to their children directly, but they also do so indirectly, through education: viz. Parent’s status ➛ child’s education ➛ child’s status

Exercises

The following exercises are derived from Affective Events Theory (Weiss & Cropanzano, 1996).

1.Receiving a nasty email from a coworker leads to feelings of anger which reduce overall job satisfaction.

Does this describe mediation of moderation?

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2.Access to free treats during break creates positive emotional responses for workers except for those who have high negative affect (i.e., who are perpetually grumpy).

Does this describe mediation or moderation?

vExtraneous variable

-Undesirable variables that influence the relationship between the variables that an experimenter is examining.

-Another way to think of this, is that these are variables the influence the outcome of an experiment, though they are not the variables that are actually of interest.

 -Any variable that you are not intentionally studying in your dissertation is an extraneous variable that could threaten the internal validity of your results.

Proposition

-Concepts are the basic units of theory development. However, theories require an understanding of the relationship among concepts. Thus, once reality is abstracted into concepts, the researcher is interested in the relationship among various concepts.

-Propositions are statements concerned with the logical relationship among concepts.

-A proposition explains the logical linkage among certain concepts by asserting a universal connection between concepts.

Hypothesis

-An educated conjecture about the logically developed relationship between two or more variables, expressed in the form of testable statements.

-A hypothesis may be defined as a tentative point of view for explaining certain facts or relationships as a guide to further investigate other facts or relationships.

-The hypothesis states the expected answer to the research question – knowing that the investigation results will lead to its being supported or not supported – or retention or rejection.

Example

Research Question: What is the effect of preschool training on the achievement of culturally disadvantaged children in the first grade.

Hypothesis: Culturally disadvantaged children who have had preschool training achieve at a higher level in first grade than culturally disadvantaged children who have not had preschool training.

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Types of Hypothesis

1)Simple Vs. Complex

2)Associative Vs. Causal

3)Directional Vs. Non – Directional

4)Null

5)Alternative

1)Simple Vs. Complex

-The statement which reflects the relationship between two variables is known assimple hypothesis.

E.g.. Employees’ motivation has significant effect on their job performance.

-The statement which reflects the relationship between more than two variables is known as complex hypothesis.

E.g. Satisfaction is higher among patients who are older and dwelling in rural areas than those who are younger and dwelling in urban areas.

2)Associative Vs. Causal

-It reflects a relationship between variables that occurs or exists in natural settings without manipulation.

E.g. The lower the blood sugar level, the lesser is the risk of infection among diabetic patients.

-It predicts the cause and effect relationship between two or more dependent and independent variables.

E.g. Prevalence of pin site infection is lower in patients who receive pin site care with hydrogen peroxide as compared to patients who receive the pin site care with betadine solution

3)Directional Vs. Non – Directional

-It specifies not only the existence, but also the expected direction of the relationship between variables.

E.g. there is a positive relation between self-esteem and reading achievement.

-It just predicts the existence of relationship between the variables.

E.g. there is a relationship between self-esteem and reading achievement

4)Null Hypothesis

-The null hypothesis is often noted as H0 (H-sub-zero).

-What does "null" mean? Often researchers test what is called the “nil” null hypothesis.

It means "nothing," "empty," "zero," "zilch."

-In research terms, it means "no effect," "no difference," "no relationship."

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-If, at the end of our study, we conclude that the null hypothesis has the best chance of being true, we mean that "nothing happened.“

5)Alternative Hypothesis

-The alternative hypothesis is usually noted as Ha (H-sub-a) or H1 (H-sub-one).

-If there's more than one alternative hypothesis, the second would be “H-sub-b," or H-sub-2," etc. I like the 1, 2, style, because it helps me keep them straight.

-The alternative hypothesis asserts that "something happened" (there is a difference or that there is a relationship).

-The alternative hypothesis is the one you'd like to accept as being true, since it would suggest that your program worked.

-One does not directly test the alternative hypothesis; one either rejects or fails to reject the null hypothesis.

-For example, here are the two hypotheses for cholesterol reduction program:

H0: There was no difference in mean cholesterol between the start and end of the cholesterol reduction program (the means were equal).

H1: There was a difference in mean cholesterol between the start and end of the cholesterol reduction program (the means were not equal).