Business Research

(Lecture 1)
Muhammad Fahid Saleem

Search for truth

People have long been concerned to come to grips with

their environment and to understand the nature of phenomenon it presents to their senses.

Examine their day to day professional work To Understand & formulate guiding principles that govern particular procedure.

Its habit of questioning

Search for truth

Questions related to health sector can be

How many patients Common conditions Causes of common conditions Health needs of community Patients satisfaction Best strategy to promote product How much sales staff required Effect of advertisement campaign on sales Customer satisfaction

Similarly in a business sector

Search for truth

The means by which people try to answer these questions, may be classified into three broad categories:

experience, reasoning and research.

These categories are neither independent nor mutually exclusive and are seen as complementary and

overlapping features where solutions to modern problems

are sought.

Experience

Knowledge and understanding gained either individually or as a group or society or shared by experts or leaders, through day to day living.

In our endeavors to come to terms with the problems of day-to-day living, we are heavily dependent upon experience. The limitations of personal experience in the form of common-sense knowing, can however, be quickly exposed when compared with features of the scientific approach to problemsolving.

Experience

Laypersons mostly base their experiences on haphazard manner, either selective or unable to used all the evidence to test their assumptions.

Laypersons also generally make no attempt to control any

extraneous sources of influence when trying to explain an

occurrence.

Chance occurrence of two events in close proximity is sufficient reason to predict a causal link between them.

Reasoning

Reasoning is a method of coming to conclusions by the use of logical argument.

This is the second category by means of which people attempt to comprehend the world around them, namely, reasoning, consists of three types: deductive reasoning, inductive

reasoning,

and

the

combined

inductive-

deductive approach.

Deductive Reasoning

Movement from general inferences to specific instances is

based on the syllogism which was Aristotles (a Greek philosopher) great contribution to formal logic.

In its simplest form the syllogism consists of a major

premise based on a priori [a priori is a Latin term which literally means before (the fact)] or self-evident

proposition, a minor premise providing a particular

instance, and a conclusion.

Deductive Reasoning

Thus: All planets orbit the sun; The earth is a planet; Therefore, the earth orbits the sun.

Similarly:

All high performers are highly proficient in their jobs Bilal is a high performer Therefore, He is highly proficient in job

Inductive Reasoning

Francis Bacon proposed the inductive reasoning movement

from specific instance to general inferences by means of

which the study of a number of individual cases would lead to a hypothesis and eventually to a

generalization.

We see that production processes are the prime features of factories & manufacturing plants.

Therefore, We conclude that factories exist for production

purposes.

Bacons inductive method was eventually followed by the inductive-deductive approach which combines induction and deduction. A back-and-forth movement in which the investigation first operates inductively from observations to hypothesis, and then deductively from these hypothesis to their implications, in order to check their validity from the standpoint of compatibility with accepted knowledge. After revision, where necessary, these hypotheses are submitted to further test through the collection of data specifically designed to test their validity at the empirical level. This dual approach is the essence of the modern scientific method for empirical research.

Research?

Wrong uses of the term Research

1. 2. 3.

As a mere gathering of facts or information Moving facts from one situation to another As an esoteric activity, far removed from practical life (Lab, Burner, Chemicals, test tubes or an Einstein like character writing dissertation on some complex subject)

Different Definitions of Research

Burn (1994) a systematic investigation to find answers to a problem.

Oxford Encyclopedic Dictionary defines The systematic

investigation into the study of materials , sources etc. in order to establish facts and reach new conclusions Sociological research is primarily committed to establish systematic reliable & valid knowledge about social world (Bulmer 1977). Business research is the systematic & objective process of gathering, recording & analyzing data for aid in making business decisions.(William)

Criteria
Adherence to the criteria mentioned below enables the process to be called Research

Process is being undertaken within a framework of a set of philosophies

Process uses procedures, methods and techniques that have been tested for their validity and reliability

Process is designed to be unbiased and objective

Criteria

(Cont.)

Philosophies
(Positivist, Constructivist, Realist etc)

Validity & Reliability

Validity, Correct procedures have been applied to find answers to a question. Reliability, Quality of a measurement procedure that provides repeatability and accuracy. Each step is unbiased, conclusion based on best of knowledge without your own vested interest. Distinction between biasness and subjectivity does exist Subjectivity is an integral part of your thinking process, based on your education, discipline, experience and skill. Where as a deliberate attempt to either conceal or highlight something is biasness.

Unbiased & Objective

Characteristics of Research
1.

Controlled & Systematic :

Many factors effect an outcome in real world. An event might be the result of a one to one relationship, OR even more. In cause & effect relationship it is important to link cause with effect. In practice, specially in social science it is extremely difficult Control refers to minimize other factors that can effect that relation Can be achieved in Physical Science, as most of research is done in laboratory

Characteristics of Research

(Cont.)

However, it is difficult to control the factors in Social Science therefore attempt is made to quantify their impact. Systematic, implies that procedures adopted follow a logical sequence. For instance Data collection can not be done before sampling.

Experience is an uncontrolled and haphazard activity. 2. Research is Empirical:

Any conclusion is based on hard evidence gathered from information collected from real life, experience and observations.

Characteristics of Research

(Cont.)

When we talk about is reasoning it is divorced from reality however research is empirical and turns to experience and the real world around for validation. Simply, subjective belief must be tested against objective reality.

3.

Self Correcting:

Not only does scientific method have built-in mechanisms to protect scientists from error as far as humanly possible. But also their procedures and results are open to public scrutiny by fellow professionals.

Research is therefore, a combination of both experience and reasoning and is regarded as the most successful approach to the discovery of truth, particularly as far as the natural sciences are concerned.

Types of Research
Research can be classified from three perspectives, 1. Application of the research study 2. Objectives of the study 3. Inquiry Mode employed These three classification are not mutually exclusive. A research classified from the view point of application can also be classified from the perspective of objective and inquiry mode employed.

Types of Research

From view points of

Application

Objective

Inquiry Mode

Pure Research

Applied Research

Descriptive Research

Exploratory Research

Correlational Research

Explanatory Research

Quantitative Research

Qualitative Research

Types of Research

Application:
If you examine research endeavour from the perspective of its application, there are two broad categories

Pure Developing and testing theories and hypothesis that are intellectually challenging to researcher but may or may not have practical application at the present time or in the future. For example, developing a sampling technique that can be applied to a particular situation Similarly, Developing an instrument, say, to measure the stress level in people

Types of Research

(Cont.)

Applied Most of the researches in social science are applied. Simply techniques, procedures and methods that form the body of research methodology are applied to the

collection of information about various aspects of a

situation, issue, problem or phenomenon.

So that information gathered can be used in other ways

such as policy formulation, administration and the

enhancement of understanding of a phenomenon.

Types of Research

(Cont.)

Objectives Similarly segregation of research on the basis of its objective can be categorized in four types

Descriptive To describe what is prevalent regarding a group of people, community, phenomenon, situation, program, or outcome. Main theme, What is prevalent. For example, Attitudes of students towards quality of teaching Attitude of workers towards management Problems faced by immigrants Consumers likes and dislikes with regard to a product

Types of Research

(Cont.)

Correlational Research This type of research is conducted to discover or establish existence of relationship/association/ interdependence between two or more aspects of a situation. Main theme of the research conducted is to ascertain if there is a relationship. For example, Impact of technology on employment Impact of advertising campaign on sale of a product Impact of incentives on productivity of workers Relationship between stressful living and incidence of heart attack

Types of Research

(Cont.)

Explanatory Research This type of research attempts to clarify why and how there is a relationship between two aspects of a situation or phenomenon.

Main theme is to explain why and how the relationship is formed.

For Example, Why does stressful living results in heart

attack.

How does technology creates employment/unemployment

Types of Research

(Cont.)

Exploratory To explore an area where little is known or to investigate the possibilities of undertaking a particular research study.

When a study is carried out to determine its feasibility it is

also called a feasibility study or a pilot study.

A small scale study is undertaken to decide if it is worth carrying out a detailed investigation.

Exploratory studies are also conducted to develop, refine,

and/or test measurement tools and procedures.

Types of Research

(Cont.)

Inquiry Mode: On the basis of the process you adopt to find answers to your research question, we can broadly categories research under two categories Quantitative Research Structure approach to inquiry is usually classified as quantitative research. Research process (Objective, design, sample and questions) is predetermined. This type of research is appropriate to determine the extent of a problem, issue, phenomenon. This help to quantify the variation in phenomenon, issue, problem, situation, if the analysis is geared to ascertain the magnitude of the variation. Example, How many employees have a particular problem. How many employees hold a particular attitude. The use of statistics is not an integral part of a quantitative study. The main function of statistics is to act as a test to confirm or contradict the conclusions that you have drawn on the basis of your understandings of analyzed data.

Types of Research

(Cont.)

Qualitative: Unstructured and flexibility in process Appropriate to explore the nature of problem, issue, situation etc. Example, an account of the different opinions people have about an issue A description of the living conditions of a community Distinction between quantitative and qualitative research, in addition to the structured/unstructured process of inquiry, is also dependent upon some other considerations such as, Approach of inquiry, purpose of investigation, measurement variables, sample size, analysis of data etc.

Types of Research

(Cont.)

What to follow Qualitative or Quantitative: Though some disciplines such as history and sociology are more inclined towards qualitative however quite a few including economics, marketing, finance are inclined towards quantitative. Therefore it is recommended one should not lock itself into becoming either solely quantitative or qualitative researcher. Both qualitative and quantitative have their strengths and weaknesses, therefore now you can find many studies where you use combination of both For example, Suppose you want to find out the types of services available to victims of domestic violence in a city and the extent of their utilization.

Types of Research

(Cont.)

First part of the research regarding the types of services is the qualitative aspect of study as finding out about them requires the description of services. The extent of utilization of services is the quantitative aspect of study as it involves estimating the number of people who use these services and other indicators that reflect the extent of utilization.

What to consider while conducting a Business Research

1.

Time Constraint
Systematic research takes time What if immediate decision is required Then no research can be conducted although rapid decision making is not ideal.

2.

Availability of Data
Often managers do have enough information to make sound decisions If there is lack of information then consider conducting a research However, if there are data constraints, then research can not be conducted.

3.

Nature of Decision
Routine decision does not require research. For example, if you want to update user manual for a customer, incurring cost for determination of proper wording not required.

4.

Benefits versus costs

Will the information gained by business research improve the quality decision to cover the expenditure. Proposed research expenditure is the best use of available funds.

Applications of Research

Most of the research conducted is applied research, which has wide application in many disciplines. Every profession uses research methods in varying amounts in many areas. Methods and procedures developed by research methodologists are used by different professionals to increase the understanding and knowledge base of their respective discipline. Questions raised in professions can categorized in four different perspectives

Applications of Research (Cont.) From different Perspectives

1.

The service provider

How many people are using this service/product Why some are using and others do not How can service or product can be improved

2.

The administrator, manager etc.

What are the needs of the community What type of products/services are needed How many service providers needed What are the training needs of staff

3.

The consumer
Am I getting value of my money How good is quality of service /product

4.

The professional
What is relationship between X & Y How valid is particular theory in present conditions What is the best way of measuring attitudes.

Managers and Research

You yourself may not be doing research, you as manager can hire a research firm Then why you need to study research
1.

2. 3. 4. 5. 6. 7.

Identify and effectively solve minor problems in the work settings. Since it enables you to understand, predict, and deal with the problems before they get out of hand. Know how to discriminate good from bad research. You will be aware of multiple influences and effects of different factors on some specific situation. Take calculated risk, having know the probabilities attached to success or failure of project. Prevent possible vested interest from exercising their influence in a situation. Can interact effectively with hired researcher. Combine experience with scientific knowledge while making decisions.

Common areas in Business Research

Accounting

Inventory methods Depreciation methods Behavior of quarterly earnings Taxation methods Optimum financial ratios Mergers and acquisitions Behavior of stock exchange Employee attitude and behavior Impact of changing demographics on management practices Production operation management

Finance

Management

Marketing

Product image Distribution Packing Consumer prefrences