MODULE-I

What is research?

Management research is an unbiased, structured, and sequential method of

enquiry, directed towards a clear implicit or explicit business objective. This
enquiry might lead to validating existing postulates or arriving at new theories
and models.

Nature of Research
1. Originates with a question or problem.

2. Requires clear articulation of a goal.

3. Follows a specific plan or procedure.

4. Often divides main problem into sub problems.

5. Guided by specific problem, question, or hypothesis.

6. Accepts certain critical assumptions.

7. Requires collection and interpretation of data.

8. Cyclical (helical) in nature.

Scope of Research
 Business Environment

 Maturing of management

 Explosive growth of the Internet

 Stakeholders demanding greater influence

 More global competition

 More government intervention

 More complex decisions

 Lower-cost data collection

 Better visualization tools

 Powerful computations
  Advanced analytical tools

 New perspectives on established research methodologies

Purposes of Business Research

 To identify and define opportunities and problems.

 To define, monitor, and refine strategies.

 To define, monitor, and refine tactics.

 To improve our understanding of the various fields of management

Types of research
 Basic research: The basic premise is the need to KNOW and the concern
is primarily academic in nature.

 Applied research: Solution or action oriented research, that is contextual

and practical in approach.

 Exploratory research is loosely structured and the basic premise is to

provide direction to subsequent, more structured method of enquiry.

 Conclusive research is structured and definite in orientation. These

studies are usually conducted to validate formulated hypotheses and
specified relationships.

The research process

 The management decision problem

 Defining the research problem

 Formulation of the working hypotheses

 Construction of the research proposal

 Formulating the research design

 Sampling considerations

 Collecting the data for the study

 Data analysis and interpretation of findings

Research applications
 Market & consumer analysis

 Product research

 Pricing research

 Promotional research

 Place research

 Asset pricing, capital markets and corporate finance

 Financial derivatives and credit risk modeling research

 Market-based accounting research

 Auditing and accountability

 Other areas: financial forecasting, behavioral finance, volatility analysis

Criteria for research

 MUST have: a clearly stated research purpose/ objective

 MUST have: a sequential plan of execution

 MUST have: a logical and explicitly stated justification for the selected
methods

 MUST have: an unbiased and neutral method of conduct and reporting

 MUST have: complete transparency and ethical conduction of the

research process

 MUST have: provision for being reliable & replicable

 Defining the research problem

A research problem can be defined as a gap or uncertainty in the

decision makers’ existing body of knowledge which inhibits efficient
decision making. The gap could be academic & theoretical (basic) or real
time and action oriented (applied).

Problem identification process

 Management decision problem: the issue/decision that needs to be
resolved through research

 Discussion with experts: to get the right perspective on the issue,

discussion/dialogue is held with subject/industry expert.

 Review of literature: the most valuable source of framing the research

question is to review the past work done on related topic(s).

 Qualitative surveys: primary exploratory loosely structured surveys to

attain the environmental context.

 Management research problem: the four steps might lead to multiple

directions/research problems the researcher can take.

 The researcher has to identify alternative he/she will undertake

 Theoretical model building (optional)

Statement of research objectives

 Unit of analysis

 Independent variable

 Dependent variable

 Extraneous independent variable

 Intervening variables
  Moderating variables

RESEARCH DESIGNS
 Exploratory research designs: are the simplest, most flexible and most loosely structured
designs. As the name suggests, the basic objective of the study is to explore and obtain clarity
on the problem situation.

 Descriptive research designs: are more structured and formal in nature. As the name implies
the objective of these studies is to provide a comprehensive and detailed explanation of the
phenomena under study.

 EXPERIMENTAL RESEARCH DESIGNS

An experiment is generally used to infer a causality. In an experiment, a researcher actively

manipulates one or more causal variables and measures their effects on the dependent
variable of interest.

 OBSERVATIONAL RESEARCH DESIGNS

Observation involves viewing and recording individuals, groups, organizations or events in

a scientific manner in order to collect valuable data related to the topic under study.

A research design is the framework or plan for a study used as a guide in collecting
and analysing data. There are three basic types of research design: exploratory,
descriptive, and causal. The names of the three types of research design describe their
purpose very well. The goal of exploratory research is to discover ideas and insights.
Descriptive research is usually concerned with describing a population with respect to
important variables. Causal research is used to establish cause-and-effect relationships
between variables. Experiments are commonly used in causal research designs because
they are best suited to determine cause and effect.

EXPLORATORY RESEARCH

Exploratory research is conducted to provide a better understanding of a situation. It

isn’t designed to come up with final answers or decisions. Through exploratory
research, researchers hope to produce hypotheses about what is going on in a situation.
Hypothesises a statement that describes how two or more variables are related. For
example, if sales for a particular line of vehicles dropped during the latest quarter, as a
researcher you might use exploratory research to provide insights about what caused
the decrease in revenue. Suppose that you conducted interviews with potential car
buyers and noticed that they seemed to be more excited about the new styles of other
car brands than they were about the brand in question. This might lead to the
hypothesis that style preferences had changed, resulting in lower sales. You can’t
really confirm or reject the hypothesis with exploratory research, though that job is left
for descriptive and/or causal research (these are often called quantitative research).
Exploratory research (sometimes referred to as qualitative research) shouldn’t be
expected to provide answers to the decision problem that you are attempting to solve
for a client. It can provide very rich, meaningful information or even definite
explanations for particular individuals, but exploratory research doesn’t provide
definite answers for the overall population. There are two reasons for this: (1)
Exploratory research usually involves only a relatively small group of people, and (2)
these people are almost never randomly selected to participate. In addition to
developing one or more hypotheses about actual (or potential) causes of changes in the
marketing environment for an organization, exploratory research is also useful for
other purposes. Sometimes it’s necessary for helping the problem, in particular, the
research problems that might be addressed. There are often several possible hypotheses
about a given marketing phenomenon, and exploratory research can help you identify
which research problem(s) ought to be pursued. Exploratory research is also used to
increase a researcher’s familiarity with a problem, especially when the researcher
doesn’t know much about the organization and/or problem to be studied. Regardless of
the particular methods employed, exploratory studies should almost always be
relatively small in size. You simply can’t afford to devote the bulk of the research
budget to exploratory research.

DESCRIPTIVE RESEARCH DESIGNS

Descriptive research is very common in business and other aspects of life. In fact, most
of the marketing research you’ve heard about or participated in can be categorized as
descriptive research. With a descriptive research design, we are usually trying to
describe some group of people or other entities. For example, Scion, a division of
Toyota Motor Corporation, was designed from the start to be “cool” and “edgy” in an
attempt to appeal to younger consumers. After the radical Scion xB had been in limited
release in southern California for a while, researchers used descriptive research to
confirm that the average Scion customer was 39 years old, the youngest in the
automotive industry, compared with Toyota customers, who were 54 years old on
average.

CAUSAL RESEARCH DESIGNS

Sometimes managers need stronger evidence that a particular action is likely to

produce a particular outcome. For example, if you were considering a change in
product packaging, you might want to test this hypothesis: “A redesign of the cereal
package so that it is shorter and less likely to tip over will improve consumer attitudes
toward the product.” For really important decisions, sometimes we need stronger
evidence than we can get with descriptive research. Using descriptive research, we
might have learned that there was a negative correlation between consumer ratings of
likelihood of tipping over and attitude toward the product, but not a lot more.
Descriptive research is fine for testing hypotheses about relationships between
variables, but we need causal designs for testing cause-and-effect relationships.

Classification of data
 Primary data is original, problem or project specific and collected for the specific objectives
and needs spelt out by the researcher. The authenticity and relevance is reasonably high.

 Secondary data is information that is not topical or research specific and has been collected
and compiled by some other researcher or investigative body. It is recorded and published in
a structured format.

Uses of secondary data

 Problem identification and formulation stage: past data and information on the topic under
study. Can be extremely useful in developing a conceptual framework for investigation.

 Hypotheses designing: earlier work done on the topic and market data as well as industry
trends and market facts. Could help in developing assumptions that can be translated into
testable hypotheses for the study.

 Sampling considerations: respondent-related databases are important sources of

respondent statistics and relevant contact details.

 Primary base: can be used to design questionnaires for the primary study.

 Validation and authentication board: earlier records and studies as well as data pools. Can
also be used to support or validate the information collected through primary sources.

Benefits of secondary data

 Resource advantage

 Accessibility of data

 Accuracy and stability of data

 Assessment of data

Drawbacks of secondary data

 Applicability of data: the purpose for which the information was earlier
collected was unique to that study and thus the information might not be
absolutely applicable or relevant for the current study objective.
 Accuracy of data: the source and data credibility is a serious issue of
concern when using past data and records.

Sources of Primary Data

 Surveys

 Questionnaire

 Observations

 Experiments

 Measurement: The term ‘measurement’ means assigning numbers or

some other symbols to the characteristics of certain objects. When
numbers are used, the researcher must have a rule for assigning a
number to an observation in a way that provides an accurate description.

 Scaling: Scaling is an extension of measurement. Scaling involves creating

a continuum on which measurements on objects are located.

Types of Measurement Scale

Nominal scale: This is the lowest level of measurement. Here, numbers

are assigned for the purpose of identification of the objects. Any object
which is assigned a higher number is in no way superior to the one which
is assigned a lower number.

Example:

• Are you married?

(a) Yes (b) No

 Married person may be assigned a no. 1.

 Unmarried person may be assigned a no. 2.

 The assigned numbers cannot be added, subtracted, multiplied or
divided. The only arithmetic operations that can be carried out are the
count of each category. Therefore, a frequency distribution table can be
prepared for the nominal scale variables and mode of the distribution
can be worked out.

Ordinal scale: This is the next higher level of measurement. One of the
limitations of the nominal scale measurements is that we cannot say
whether the assigned number to an object is higher or lower than the
one assigned to another option. The ordinal scale measurement takes
care of this limitation. An ordinal scale measurement tells whether an
object has more or less of characteristics than some other objects.

Interval scale: The interval scale measurement is the next higher level of
measurement.

 It takes care of the limitation of the ordinal scale measurement where

the difference between the score on the ordinal scale does not have any
meaningful interpretation.

 In the interval scale the difference of the score on the scale has
meaningful interpretation.

 It is assumed that the respondent is able to answer the questions on a

continuum scale.

 The mathematical form of the data on the interval scale may be written
as

Y=a+bX where a ≠ 0

 Ratio of the score on this scale does not have a meaningful

interpretation.

Ratio scale: This is the highest level of measurement and takes care of
the limitations of the interval scale measurement, where the ratio of the
measurements on the scale does not have a meaningful interpretation.

 The mathematical form of the ratio scale data is given by Y = b X.

 In ratio scale, there is a natural zero (origin).

 Example:

How many chemist shops are there in your locality?

How many students are there in the MBA programme at IIFT?

 All mathematical and statistical operations can be carried out using the
ratio scale data.

The questionnaire method

 This is the simplest and most often used method of primary data collection

 There is a pre-determined set of questions in a sequential format

 Is designed to suit the respondent’s understanding and language command

 Can be conducted to collect useful data from a large population in a short duration of time

 The spelt out research objectives need to be converted into specific questions

 It must be designed to engage the respondent and encourage meaningful response

 The questions should be designed in simple language and be self-explanatory

Types of questionnaire
Formalized & unconcealed questionnaire: self-explanatory with most response categories
predefined

 Out of the following options, where do you invest

(tick all that apply)

Precious metals----------------, real estate------------, stocks---------,

Government instruments---------, mutual funds------any other-------

 Who carries out your investments?

Myself-----------, agent---------, relative-----------, friend------------, any other----------

 What is your source of information for these decisions?

 Newspaper------------, investment magazines-----------, company records etc.----------, Trading
portals------------, agent------------

Formalized & concealed questionnaire: most response categories are predefined, but latent
cause of behaviour are derived from indirect questions

Please indicate level of your agreement for the following statements.

SA - Strongly Agree; A-Agree; N-Neutral; SD- Strongly Disagree; D-Disagree

Non-formalized & concealed questionnaire: undisguised and most response categories are
not predefined

 Why do you think Maggi noodles are liked by young children?

---------------------------------------------------------------------------

 How do you generally decide on where you are going to invest

your money? -------------------------------------------------------------

 Give three reasons why you believe that the 2010 Commonwealth Games in India are going
to help the country?

Criteria for questionnaire selection

 Population characteristics

 Population spread

 Study area

Type of questions
Open ended questions:

 What is your age?

 How would you evaluate the work done by the present government?

 How much orange juice does this bottle contain?

 What is your reaction to this new custard powder?

 Why do you smoke Gold Flake cigarettes?

 Which is your favorite TV serial?

 What training programme have you last attended?

 With whom in your work group do you interact with after office hours?

Closed ended questions

1. Dichotomous questions

 Are you diabetic? Yes / No

 Have you read the new book by Dan Brown? Yes/no

 What kind of petrol do you use in your car? Normal/Premium

 What kind of cola do you drink? Normal/diet

 Your working hours in the organization are fixed/ flexible

2. Multiple choice questions

 How much do you spend on grocery products (average in one month)?

- Less than Rs. 2500/-

- Between Rs 2500-5000/-

- More than Rs 5000/-

 You do not currently sell organic food products because (Could be  1)

- You do not know about organic food products.

- You are not interested.

- You are interested but you do not know how to procure it.

- It is not profitable.

-The customer demand is too low

- any other--------------------

Questionnaire designing criteria

 Clearly specify the issue

 Use simple terminology

 Avoid ambiguity in questioning

 Avoid leading questions

 Avoid loaded questions

 Avoid implicit choices and assumptions

 Avoid double-barreled questions

Questionnaire structure
 Instructions

 Opening questions

 Study questions

 Classification information

 Acknowledgement

Sampling Concepts

 Population: Population refers to any group of people or objects that

form the subject of study in a particular survey and are similar in one or
more ways.

 Element: An element comprises a single member of the population.

 Sampling frame: Sampling frame comprises all the elements of a

population with proper identification that is available to us for selection
at any stage of sampling.

 Sample: It is a subset of the population. It comprises only some elements

of the population.
 Sampling unit: A sampling unit is a single member of the sample.

 Sampling: It is a process of selecting an adequate number of elements

from the population so that the study of the sample will not only help in
understanding the characteristics of the population but will also enable
us to generalize the results.

 Census (or complete enumeration): An examination of each and every

element of the population is called census or complete enumeration.

Advantages of Sample over Census

 Sample saves time and cost.

 A decision-maker may not have too much of time to wait till all the
information is available.

 There are situations where a sample is the only option.

 The study of a sample instead of complete enumeration may, at times,

produce more reliable results.

A census is appropriate when the population size is small.

Sampling Design

Probability Sampling Design - Probability sampling designs are used in conclusive research. In
a probability sampling design, each and every element of the population has a known chance
of being selected in the sample.

Types of Probability Sampling Design

 Simple random sampling with replacement

 Simple random sampling without replacement

 Systematic sampling

 Stratified random sampling

  Cluster sampling

Non-probability Sampling Designs - In case of non-probability sampling design, the elements

of the population do not have any known chance of being selected in the sample.

Types of Non-Probability Sampling Design

 Convenience sampling

 Judgmental sampling

 Snowball sampling

 Quota sampling

Sampling vs Non-Sampling Error

 Sampling error: This error arises when a sample is not representative of the population.

 Non-sampling error: This error arises not because a sample is not a representative of the
population but because of other reasons. Some of these reasons are listed below:

 Plain lying by the respondent.

 The error can arise while transferring the data from the questionnaire to the spreadsheet on
the computer.

 There can be errors at the time of coding, tabulation and computation.

 Population of the study is not properly defined

 Respondent may refuse to be part of the study.

 There may be a sampling frame error.

Probability sampling

The sample method involves taking a representative selection of the population and
using the data collected as research information. A sample is a “subgroup of a
population” . It has also been described as a representative “taste” of a group. The
sample should be “representative in the sense that each sampled unit will represent the
characteristics of a known number of units in the population”

Probability sampling provides an advantage because of researcher’s ability to calculate

specific bias and error in regards to the data collected. Probability sampling is defined
as having the “distinguishing characteristic that each unit in the population has a
known, nonzero probability of being included in the sample” . It is described more
clearly as “every subject or unit has an equal chance of being selected” from the
population. There are four types of probability sampling that are standard across
disciplines. These four include simple random sampling, systematic random sampling,
stratified random sampling, and cluster sampling.

Simple random sampling

Simple random sampling is often called straight random sampling. The naming
convention of this type of probability sampling method is not indicative of the
discipline but reliant upon the researcher or author of the various books and articles
referenced. That is to say that these two terms are interchangeable and is not
interdependent on a specific discipline within academia. Simple random sampling
requires that each member of the population have an equal chance of being selected (as
is the main goal of probability sampling). A simple random sample is selected by
assigning a number to each member in the population list and then “use a random
number table to draw out the members of the sample” . Another way of viewing simple
random sampling precludes that “all members of the study population are either
physically present or listed, and the members are selected at random until a previously
specified number of members or units has been selected” .Each member of
the population is “selected one at a time, independent of one another and without
replacement; once a unit is selected, it has no further chance to be selected” .
Regardless of the process used for simple random sampling, the process can be
laborious if the list of the population is long or it is completed manually without the
aid of a computer.

Systematic random sampling

Systematic random sampling is usually preferred over simple random sampling in so

far as it is more convenient for the researcher. This type of probability sampling is also
called ordinal sampling and pseudo-simple random samples. Systematic random
sampling includes “selection of sampling units in sequences separated on lists by the
interval of selection” . The selection of the sample from the population list is made by
randomly selecting a beginning and choosing every nth name calls the interval used to
select every nth name the sampling rate the same as sampling interval.

Stratified random sampling

Stratified random sampling is “one in which the population is divided into subgroups
or ‘strata,’ and a random sample is then selected from each subgroup” . When a few
characteristics are known about a population, stratified random sampling is preferable
because the population may be arranged in subgroups and then a random sample may
be selected from each of these subgroups “arranging the original unit into categories
so that the distribution of a particular group in the population of interest will be closely
replicated in the sample” . These subgroups can exhibit characteristics including but
not limited to gender, race, ethnicity, religion, and age groups.
Cluster sampling

Cluster sampling, on the surface, is very similar to stratified sampling in that “survey
population members are divided into unique, non-overlapping groups prior to
sampling” . These groups are referred to as clusters instead of strata because they are
“naturally occurring groupings such as schools, households, or geographic units” .
Whereas a stratified sample “involves selecting a few members from each group or
stratum,” cluster sampling involves “the selection of a few groups and data are
collected from all group members” . This sampling method is used when no master list
of the population exists but “cluster” lists are obtainable

Non probability sampling

The advantage of non-probability sampling is that it a convenient way for researchers

to assemble a sample with little or no cost and/or for those research studies that do not
require representativeness of the population. Non-probability sampling is a good
method to use when conducting a pilot study, when attempting to question groups who
may have sensitivities to the questions being asked and may not want answer those
questions honestly, and for those situations when ethical concerns may keep the
researcher from speaking to every member of a specific group. In nonprobability
sampling, subjective judgments play a specific role. Researchers must be careful not to
generalize results based on non-probability sampling to the general
population. Non-probability sampling includes various methods. None of the resources
agree on all of them.

Convenience sampling

Convenience sampling includes participants who are readily available and agree to
participate in a study indicates that convenience sampling is often called accidental
but also include haphazard as an alternate title it does not use the specific title of
convenience, but calls this same type of non-probability sample.

All of these alternate names for convenience non-probability sampling include the
same definition. Convenience is just that… convenient. This is a relatively easy choice
for researchers when a group of people cannot be found to survey or question.
convenience sampling may include going to a place of business, Purposive non-
probability sample is also known as judgment or judgmental. No matter the naming
convention used, all authors agree on the definition of this non-probability sampling
method. Purposive sampling is selecting a sample “on the basis of your own
knowledge of the population, its elements, and the nature of your research aims” That
is the population is “non-randomly selected based on a particular characteristic” . The
individual characteristics are selected to answer necessary questions about a “certain
matter or product” . The researcher is then able to select participants based on internal
knowledge of said characteristic. This method is useful if a researcher wants to study
“a small subset of a larger population in which many members of the subset are easily
identified but the enumeration of all is nearly impossible” Pilot studies are well suited
to this type of non-probability sampling method.

Snowball sampling

snowball sampling is also called network sampling. Snowball sampling is used “in
those rare cases when the population of interest cannot be identified other than by
someone who knows that a certain person has the necessary experience or
characteristics to be included”. Snowball sampling also includes relying on previously
identified group members to identify others who may share the same characteristics as
the group already in place.

Quota sampling
In Quota sampling we divide the “population group being studied into subgroups.
Then based on the proportions of the subgroups needed for the final sample,
interviewers are given a number of units from each subgroup that they are to select and
interview” . Quota sampling is a good method to use to non-randomly select groups
based on gender, age, race, and ethnicity. In quota sampling where “respondents are
selected non-randomly on the basis of their known proportion to the population”.
Quota sampling as dividing the population group into subgroups and based on the
proportions, “interviewers are given a number of units from each subgroup that they
are to select and interview”. Quota non-probability sampling and stratified probability
sampling are different in that “quota sampling allows the interviewer discretion in the
selection of the individuals for the sample” . There are a number of problems that
researchers should be aware of when choosing quota sampling.

Data Processing
data editing
 The data obtained is complete in all respects.

 It is accurate in terms of information recorded and responses sought.

 Questionnaires are legible and are correctly deciphered, especially the open ended
questions.

 The response format is in the form that was instructed.

 The data is structured in a manner that entering the information will not be a
problem.

Field editing: usually done by the field investigators at the end of every field day the
investigator(s) who must review the filled forms for any inconsistencies, non-
response, illegible responses or incomplete questionnaires.

Centralized in-house editing: usually done at the researcher’s end.

 Backtracking

 Allocating missing values

 Plug value

 Discarding unsatisfactory responses

Data coding
The process of identifying and denoting a numeral to the responses given by the respondent
is called coding

 Field

 Record

 File

 Data matrix

Code book formulation

 Appropriate to the research objective

 Comprehensive

 Mutually exclusive

 Single variable entry

 MODULE-II

Testing of Hypothesis

Type I and Type II error

 You make a Type I error when you reject Null Hypothesis when it is true.
  You make Type II error when you reject Alternate hypothesis when
actually it is true.

Q.1. A company hypothesizes that the life of its bulbs is 145 hrs. withstd.dev. of 210 hrs.
A sample of 25 bulbs gave a mean of 130 hrs. Using 0.05 level of significance canthe
company conclude that the avg. is less than 145 hrs.

ANS.

H0 : µ = 145
H1 : µ < 145

𝑋̅ = 130, σ = 210, n = 25, α = 0.05

𝜎 210
𝜎𝑥̅ = = = 42
√𝑛 √25

𝑋̅ − 𝜇𝐻0 130 − 145

𝑍= 𝜎 = = −0.36
42
√𝑛

Table Z = -1.645 Accept H0

Analysis of Variance Techniques

Q.1. The fuel efficiency as Km per litre is given below. Use 5% level of significance to test the
fuel efficiency of four blends of gasoline.
Driver Car model
A B C D
1 13 9.4 10.6 12
2 12.4 10.2 13.6 8.7
3 9.9 12.6 9.3 13.4
4 9.8 14 12.7 10.5

T.. = 182.1

𝑇∙∙2 182.12
𝐶𝐹 = = = 2072.526
𝑚×𝑚 4×4

Ri = Sum of observations of ith row

Cj = Sum of observations of jth column.
Tk = Sum of observations of kth treatment

𝑚 𝑚
2
𝑇𝑆𝑆 = ∑ ∑ 𝑥𝑖𝑗 − 𝐶𝐹 = 2118.57 − 2072.53 = 46.04
𝑖=1 𝑗=1
𝑚
1 542 49.72 41.22 37.22
𝑇𝑟𝑆𝑆 = ∑ 𝑇𝑘2 − 𝐶𝐹 = [ + + + ] − 2072.53 = 2116.84 − 2072.53
𝑚 4 4 4 4
𝑘=1

= 44.31
𝑚
1 452 44.92 45.22 472
𝑅𝑆𝑆 = ∑ 𝑅𝑖2 − 𝐶𝐹 = [ + + + ] − 2072.53 = 2073.263 − 2072.526
𝑚 4 4 4 4
𝑖=1

= 0.736

𝑚
1 45.12 46.22 46.22 44.62
𝐶𝑆𝑆 = ∑ 𝐶𝑗2 − 𝐶𝐹 = [ + + + ] − 2072.53 = 2073. .013 − 2072.53
𝑚 4 4 4 4
𝑗=1

= 0.483

SSE = TSS – TrSS – RSS – CSS

= 46.04 – 44.31 – 0.736 – 0.483
= 0.511

H0 : Average fuel efficiency of four different blends of gasoline is same.

H1 : At least two means are different.

ANOVA TABLE
 Source of Degrees of
Sum of Squares Mean Square F
Variation Freedom

Rows 3 0.736 0.245

Columns 3 0.483 0.161

Treatments 3 44.31 14.77 𝐹73 = 202.33

Error 7 0.511 0.073

Total 16 46.04

Assume α = 0.05. Table 𝐹73 = 202.33 is greater than tabulated 𝐹73 = 4.35, reject H0. Therefore the
average fuel efficiency of four different blends of gasoline is different.
 Chi- square test
Q.1.The table shows the numbers chosen at random from a telephone directory. Test whether the digits
may be taken to occure equally or not.

Digits 0 1 2 3 4 5 6 7 8 9 Total
Frequency 1026 1107 997 966 1075 933 1107 972 964 853 10,000

ANS.
H0 : Digits occur equally in the directory.
H1 : Digits don’t occur equally in the directory.

Under the assumption that null hypothesis is true, the expected frequency for each digit would be
1000.

(O-
Digit O E (O-E)2
E)2/E
0 1026 1000 676 0.676
1 1107 1000 11449 11.449
2 997 1000 9 0.009
3 966 1000 1156 1.156
4 1075 1000 5625 5.625
5 933 1000 4489 4.489
6 1107 1000 11449 11.449
7 972 1000 784 0.784
8 964 1000 1296 1.296
9 853 1000 21609 21.609
Total 10,000 58.542

O = Observed frequency, E = Expected frequency

𝑘
2
(𝑂𝑖 − 𝐸𝑖 )2
𝜒𝑘−1 =∑ = 58.542
𝐸𝑖
𝑖=1

Assume α = 0.05

Table 𝜒92 = 16.919

Since computed 𝜒 2 >Table 𝜒 2 .

Reject H0. Therefore digits do not occur equally in the directory.

Q.2.Test whetherthere is a relationship between type of cigarettes smoked and gender.

Frequencies
Cigarette Male Female Total
A 25 30 55
B 40 15 55
C 30 10 40
Total 95 55 150

ANS.
H0 : There is no relationship between the type of cigarettes smoked and gender.
H1 : There is a relationship between type of cigarettes smoked and gender.

Assume α = 0.05

Table of Observed Frequencies

Cigarette Male Female Total
A 25 30 55
B 40 15 55
C 30 10 40
Total 95 55 150

Expected frequencies are computed using the formula

𝑅𝑖 × 𝐶𝑗
𝐸𝑖𝑗 =
𝐺

Eij = Expected frequency in ith row and jth column

Ri = Total of ith row
Cj = Total of jth column
G = Grand total of frequencies

Table of Expected Frequencies

Cigarette Male Female Total
A 34.83333 20.16667 55
B 34.83333 20.16667 55
C 25.33333 14.66667 40
Total 95 55 150
 𝑟 𝑐
2
(𝑂𝑖𝑗 −𝐸𝑖𝑗 )2
χ = ∑∑
(3−1)(2−1) 𝐸𝑖𝑗
𝑖=1 𝑗=1

(25 − 34.83)2 (30 − 20.17)2 (40 − 34.83)2 (10 − 14.67)2

= + + + ⋯+
34.83 20.17 34.83 14.67
= 12.005

Assume α = 0.05 Table 𝜒22 = 5.991

Reject H0. There is a relationship between type of cigarette smoked and gender.

Sign Test

If weight before is greater than weight after, we assign a plus sign and if weight before is less than
weight after, we assign a negative sign. If weights before and after are equal, the observation is
omitted from analysis and correspondingly sample size is reduced.

There are 11 plus signs and 8 negative signs.

H0 : p = ½
H1 : p > ½

Since both np and nq are greater than 5 ( 19 × ½ = 9.5), Z distribution is used

(𝑋 − 0.5) − 0.5𝑛 11 − 0.5 − 0.5 × 19 10.5 − 9.5 1.0

𝑍= = = = = 0.46
0.5√𝑛 0.5√19 2.18 2.18

At α = 0.5, the table value of Z = 1.645. Since sample value of Z is less than tabulated value of Z,
accept H0. Therefore prescribed programme of physical exercise is not effective.

Run Test
Running a Test of Randomness is a non-parametric method that is used in cases when the
parametric test is not in use. In this test, two different random samples from different
populations with different continuous cumulative distribution functions are obtained. Running
a test for randomness is carried out in a random model in which the observations vary around
a constant mean. The observation in the random model in which the run test is carried out has
a constant variance, and the observations are also probabilistically independent. The run in a
run test is defined as the consecutive sequence of ones and twos. This test checks whether or
not the number of runs are the appropriate number of runs for a randomly generated series.
The observations from the two independent samples are ranked in increasing order, and each
value is coded as a 1 or 2, and the total number of runs is summed up and used as the test
statistics. Small values do not support suggest different populations and large values suggest
identical populations (the arrangements of the values should be random). Wald Wolfowitz
run test is commonly used.

Data is collected from two independent groups.

If the run test is being tested for randomness, then it is assumed that the data should enter in
the dataset as an ordered sample, increasing in magnitude. This means that for carrying-out
the run test for randomness, there should not be any groupings or other pre-processing.
If the run test is carried out in SPSS, then it is assumed that the variables that are being tested
in the run test should be of numeric type. This means that if the test variables are of the string
type, then the variables must be coded as numbers in order to make those variables of the
numeric type.

Generally, in non-parametric tests, no underlying distribution is assumed. This holds for the
run test as well, but if the number of observations is more than twenty, then it is assumed (in
the run test) that the underlying distribution would be normal and would have the mean and
variance that is given by the formulas as discussed above.

Null Hypothesis: The order of the ones and twos is random.

Alternative Hypothesis: The order of ones and twos is not random.

This checking is done in the following manner:

Let us consider that ‘H’ denotes the number of observations. The ‘Ha ‘is considered to be the number
that falls above the mean, and ‘Hb ‘is considered to be the number that falls below the mean. The ‘R’ is
considered to be the observed number of runs. After considering these symbols, then the probability
of the observed number of runs is derived.

Formula of the mean and the variance of the observed number of the runs:
E (R) = H + 2 Ha Hb / H
V (R) = 2 Ha Hb (2 Ha Hb – H) / H2 (H – 1)

The researcher should note that in the run test for the random type of model, if the value of the
observations is larger than twenty, then the distribution of the observed number of runs would
approximately follow normal distribution. The value of the standard normal variate of the observed
number of runs in the run test is given by the following:

Z = R – E ( R ) / Stdev ( R ).

This follows the normal distribution that has the mean as zero and the variance as 1. This is also called
the standard normal distribution that the Z variate must follow.
 Krushall-Wallis Test

H0 : The prescribed programme of physical exercise is not effective.

H1 : The prescribed programme of physical exercise is effective is reducing weight.

Weight Weight Absolute Negative Positive

S.No. Difference Rank
Before After Difference Rank Rank
1 169 175 -6 6 9.5 9.5
2 180 172 8 8 13 13
3 176 170 6 6 9.5 9.5
4 175 178 -3 3 3.5 3.5
5 169 170 -1 1 1 1
Omitted the observation from
6 182 182 0 0
analysis
7 170 173 -3 3 3.5 3.5
8 176 169 7 7 12 12
9 189 175 14 14 16 16
10 184 182 2 2 2 2
11 206 180 26 26 18 18
12 186 174 12 12 14.5 14.5
13 180 184 -4 4 5.5 5.5
14 240 210 30 30 19 19
15 180 184 -4 4 5.5 5.5
16 170 176 -6 6 9.5 9.5
17 190 195 -5 5 7 7
18 186 174 12 12 14.5 14.5
19 210 190 20 20 17 17
20 180 174 6 6 9.5 9.5
TOTAL 45 145

T+ = Sum of positive ranks = 145

T- = Sum of negative ranks = 45
T = Min (T+, T-) = 45
𝑛(𝑛+1) 19×20
μT = 4
= 4
= 95
 𝑛(𝑛 + 1)(2𝑛 + 1) 19 × 20 × 39
σ =√ =√ = √617.5 = 24.85
𝑇 24 24

𝑇 − 𝜇𝑇 45 − 95 −50
𝑍= = = = −2.01
𝜎𝑇 24.85 24.85

𝐶𝑜𝑚𝑝𝑢𝑡𝑒𝑑|𝑍| = 2.01 At α = 0.05, Tab Z = 1.645

Reject H0. The prescribed programme of physical exercise is effective. We find just the opposite
results. However, as mentioned in the text, rank test for paired sample makes use of more information
than two sample sign test and therefore should be more reliable.

MODULE-III

Factor analysis

To interpret the rotated solution the student should have done the following
 - Establish whether this a robust, statistically significant factor analysis solution and the
decision maker can accept the solution.
- As we can see from Table 1 the KMO value is > 0.5 and the Bartlett’s test of sphericity
also has a p-value of 0.000. thus the solution is a robust solution.
- To interpret the rotated solution we consider the factor ladings given for the two factor
solution. The cut off could be discretionary, depending on what the student decides on. In
our case we have taken the cutoff as 0.75.
- Factor 1: I enjoy working in the company; my company is well respected and we have a
very relaxed working atmosphere in the company. Thus, we name the factor as
organization affiliation
- Factor 2: the fellow workers are helpful; team working is recognized by the company.
Co-worker affiliation.

To calculate the eigenvalue the student should attempt the following method:
- Eigenvalue of factor 1 = (-.028)2 + (.928)2 + (.976)2 + (.376)2 + (.375)2 + (.953)2
= 3.0048

- Eigenvalue of factor 2 = (.221)2 + (.194)2 + (.142)2 + (.902)2 + (.903)2 + (.145)2

= 1.757

To calculate the communalities for each variable the student should do the following

Add to image of company = (-.028)2 + (.221)2 = .0496

I enjoy working in the company = (.928)2 + (.194)2 = .8988

My company is well respected = (.976)2 + (.142)2 = .9727

The fellow workers are helpful = (.376)2 + (.902)2 = .955

Team work is recognized in the company = (.375)2 + (.903)2 = .9542

We have a very relaxed working
= (.953)2 + (.145)2 = .9292
atmosphere in the company
i) to calculate the contribution of each individual factors to the total variance the student should
do the following calculations
Eigen valu e of factor 1
- Percentage of variance explained by factor 1 =  100
Sum total of the Eigen valu es

3.0048
=  100 = 50.08%
6

Eigen valu e of factor 2

- Percentage of variance explained by factor 2 =  100
Sum total of the Eigen valu es

1.757
=  100 = 29.28%
6

The total variance explained by both factors = 50.08  29.28 = 79.36%

To interpret the rotated solution the student should have done the following
- Establish whether this a robust, statistically significant factor analysis solution and the
decision maker can accept the solution.
- As we can see from Table 1 the KMO value is > 0.5 and the Bartlett’s test of sphericity
also has a p-value of 0.000. thus the solution is a robust solution
- To interpret the rotated solution we consider the factor ladings given for the two factor
solution. The cut off could be discretionary depending on what the student decides on. In
our case we have taken the cutoff as 0.75.
- Factor 1: I get heart palpitations when my boss calls me;a sitting job leads to digestive
problems and when I retire I might not be physically fit to enjoy my retired life. Thus we
name the factor as physiological job stress
- Factor 2: work life also spills over to personal life; I do not feel like meeting people
after I go home from office and negatively related to I always like to stay back after work
hours in the office. Thus we call this factor as work-life balance.

To calculate the eigenvalue the student should attempt the following method:
 - Eigenvalue of factor 1 = (.971)2 + (.050)2 + (.085)2 + (.975)2 + (-.083)2 + (.977)2
= 2.8645
- Eigenvalue of factor 2 = (.088) + (.974)2 + (.920)2 + (.095)2 + (-.971)2 + (.040)2
2

= 2.7562

To calculate the communalities for each variable the student should do the following

I get heart palpitations when my boss

= (.971)2 + (.088)2 = .9505
calls me

Work-life also spills over to personal life = (.050)2 + (.974)2 = .9512

I do not feel like meeting people once I

= (.085)2 + (.920)2 = .8536
go home from office

A sitting job leads to digestive problems = (.975)2 + (.095)2 = .9596

I always like to stay back after working

= (-.083)2 + (-.971)2 = .9497
hours in the office
When I retire I might not be
= (.977)2 + (.040)2 = .9561
physically fit to enjoy my retired life

to calculate the contribution of each individual factors to the total variance the student
should do the following calculations
Eigen valu e of factor 1
- Percentage of variance explained by factor 1 =  100
Sum total of the Eigen valu es

2.8645
=  100 = 47.74%
6

Eigen valu e of factor 2

- Percentage of variance explained by factor 2 =  100
Sum total of the Eigen valu es

2.7562
=  100 = 45.93%
6
 The total variance explained by both factors = 47.74  45.93 = 93.04%

Multiple Regression Analysis

Multiple linear regression is the most common form of linear regression analysis. As a
predictive analysis, the multiple linear regression is used to explain the relationship between
one continuous dependent variable and two or more independent variables. The independent
variables can be continuous or categorical (dummy coded as appropriate).

Assumptions:
Regression residuals must be normally distributed.
A linear relationship is assumed between the dependent variable and the independent
variables.
The residuals are homoscedastic and approximately rectangular-shaped.
Absence of multicollinearity is assumed in the model, meaning that the independent variables
are not too highly correlated.
At the center of the multiple linear regression analysis is the task of fitting a single line
through a scatter plot. More specifically the multiple linear regression fits a line through a
multi-dimensional space of data points. The simplest form has one dependent and two
independent variables. The dependent variable may also be referred to as the outcome
variable or regressand. The independent variables may also be referred to as the predictor
variables or regressors.
There are 3 major uses for multiple linear regression analysis. First, it might be used to
identify the strength of the effect that the independent variables have on a dependent variable.
Second, it can be used to forecast effects or impacts of changes. That is, multiple linear
regression analysis helps us to understand how much will the dependent variable change when
we change the independent variables. For instance, a multiple linear regression can tell you
how much GPA is expected to increase (or decrease) for every one-point increase (or
decrease) in IQ.
Third, multiple linear regression analysis predicts trends and future values. The multiple
linear regression analysis can be used to get point estimates. An example question may be
“what will the price of gold be 6 months from now?”
When selecting the model for the multiple linear regression analysis, another important
consideration is the model fit. Adding independent variables to a multiple linear regression
model will always increase the amount of explained variance in the dependent variable
(typically expressed as R²). Therefore, adding too many independent variables without any
theoretical justification may result in an over-fit model.

Discriminant analysis

To calculate the similarity between each pair of respondents the students need to calculate the
distance between every pair using the Euclidean distance formula. As an illustration let us
calculate the distance between consumer 1 & 2:

d1, 2  1  22  4  52  2.00

Similarly this exercise can be conducted for all the pairs to achieve a matrix as follows:

Squared Euclidean Dis tance

Cas e 1 2 3 4 5
1 .000 2.000 20.000 1.000 10.000
2 2.000 .000 18.000 1.000 8.000
3 20.000 18.000 .000 25.000 2.000
4 1.000 1.000 25.000 .000 13.000
5 10.000 8.000 2.000 13.000 .000

Using the single linkage method, the dendrogram is as follows:

Rescaled Distance Cluster Combine

C A S E 0 5 10 15 20 25
Label Num +---------+---------+---------+---------+---------+

2 
4

1 
3

5 
However, the answer cannot be concrete as
1. The size of the sample is too small
2. Secondly, there is no secondary data about the market size and structure of the two
possibilities.
3. Thirdly, there must be demographic data available about the sample to take a decision.

REPORT WRITING

 General considerations to keep in mind when generating a report

 The Audience
 The Story
 Formatting Considerations

Critical Elements of a Report

 Introduction

 Objectives of the Study

 Research Methodology

 Sample section

 Measurement section

 Design and Procedures section

 Results

 Conclusions, Abstract and Reference Sections

Formatting

 Title Page

 Abstract (on a separate single page)

 The Body (no page breaks between sections in the body)

 Introduction (2-3 pages)

  Methods (7-10 pages)

 Sample (1 page)

 Measures (2-3 pages)

 Design (2-3 pages)

 Procedures (2-3 pages)

 Results (2-3 pages)

 Conclusions (1-2 pages)

 References

 Tables (one to a page)

 Figures (one to a page)

 Appendices

Layout of research report

Preliminary Section

I. Title Page
II. Letter of transmittal
III. Contents
IV. Acknowledgements
V. Abstract (on a separate single page)

Background Section

i. Problem statement
ii. Objectives
iii. Review of literature

Methodology sections (7-10 pages)

i. Research design

ii. Sample (1 page)

iii. Measures (2-3 pages)

 iv. Data collection (2-3 pages)

v. Data analysis (2-3 pages)

Finding Sections

I. Results
II. Interpretation of result

Conclusions with limitations (1-2 pages)

 References

 Tables (one page)

 Figures (1-5 pages)

 Appendices

 Glossary

 Bibliography

SHORT QUESTIONS

Q.1 What is research ?

Ans- Management research is an unbiased, structured, and sequential method of

enquiry, directed towards a clear implicit or explicit business objective. This enquiry
might lead to validating existing postulates or arriving at new theories and models.

Q.2 What is applied research ?

Ans- Solution or action oriented research, that is contextual and practical in approach.

Q.3 What is exploratory research?

Ans- Exploratory research is loosely structured and the basic premise is to provide
direction to subsequent, more structured method of enquiry.

Q.4 What is Conclusive research?

Conclusive research is structured and definite in orientation. These studies are usually
conducted to validate formulated hypotheses and specified relationships.

Q.5.What are the criteria of research?

1. MUST have: a sequential plan of execution

2. MUST have: a logical and explicitly stated justification for the selected methods

3. MUST have: an unbiased and neutral method of conduct and reporting

Q.6 What is Descriptive research designs?

Descriptive research designs are more structured and formal in nature. As the name
implies the objective of these studies is to provide a comprehensive and detailed
explanation of the phenomena under study

Q.7.What is primary data?

Primary data is original, problem or project specific and collected for the specific
objectives and needs spelt out by the researcher. The authenticity and relevance is
reasonably high.

Q.8 What is secondary data?

Secondary data is information that is not topical or research specific and has been
collected and compiled by some other researcher or investigative body. It is recorded
and published in a structured format.

Q.9 What are the benefits of secondary data?

1. Resource advantage

2. Accessibility of data

3. Accuracy and stability of data

4. Assessment of data

Q.10 What are the internal data sources?

1. Company records: historical as well as current manufacturing information,

process and policy documents

2. Employee records: demographic data sets, performance appraisals & grievance

data
 3. Sales data: cash register receipts, salespersons call records, sales invoices and
sales reports

4. Other sources: customer databases, CRM data, warranty records, etc.

Q.11 What are the external data sources?

Published data: data that is in on public domains, which could be compiled by

public or private sources

Government sources: census data, other documented and available government

publications

Other data sources: essentially non-government sources like books, periodicals,

guides and directories, Indices and standardized non-government statistical data

Q.12 Define a research Problem.

A research problem can be defined as a gap or uncertainty in the decision makers’

existing body of knowledge which inhibits efficient decision making. The gap could be
academic & theoretical (basic) or real time and action oriented (applied).

Q.13 What are the elements of research problem?

 Unit of analysis

 Independent variable

 Dependent variable

 Extraneous independent variable

 Intervening variables

Q.14.What is a hypothesis?

A hypothesis is any assumption/presupposition that the researcher makes about the

probable direction of the results that might be obtained on the completion of the
research process

Q.15 What is Relational hypotheses?

Relational hypotheses: These are the typical kind of hypotheses which state the
expected relationship between two variables.

Q.16 What are the criteria for hypothesis formulation?

1. In simple, declarative statement form

2. Measurable and quantifiable

3. Is essentially a conjectural statement?

4. Has underlying assumptions on the testing of the stated relationships

Q.17 What is an Experiment?

An experiment is generally used to infer a causality. In an experiment, a researcher

actively manipulates one or more causal variables and measures their effects on the
dependent variable of interest.

Q.18 Write Necessary Conditions for Making Causal Inferences.

1. Concomitant variation

2. Time order of occurrence of variables

3. Absence of other possible causal factors

Q.19 What is test units?

Test units: Test units are those entities on which treatments are applied.

Q.20 What are Independent variables?

Independent variables are also known as explanatory variables or treatments. The

levels of these variables are manipulated (changed) by researchers to measure their
effect on the dependent variable.
Q.21 What is quasi-experimental design?

In quasi-experimental design, the researcher can control when measurements are taken
and on whom they are taken. However, this design lacks complete control of
scheduling of treatment and also lacks the ability to randomize test units’ exposure to
treatments.

Q.22 What is Population?

Population refers to any group of people or objects that form the subject of study in a
particular survey and are similar in one or more ways.

Q.23 What is an Element?

An element comprises a single member of the population.

Q.24What is Sampling frame?

Sampling frame comprises all the elements of a population with proper identification
that is available to us for selection at any stage of sampling.

Q.25What is a Sample?

It is a subset of the population. It comprises only some elements of the population.

Q.26 What is Sampling unit?

A sampling unit is a single member of the sample.

Q.27What is Sampling?

It is a process of selecting an adequate number of elements from the population so that

the study of the sample will not only help in understanding the characteristics of the
population but will also enable us to generalize the results.

Q.28What is Census (or complete enumeration)?

An examination of each and every element of the population is called census or

complete enumeration.

Q.29 What are the advantages of sample over census?

 1. Sample saves time and cost.

2. A decision-maker may not have too much of time to wait till all the information
is available.

3. There are situations where a sample is the only option.

4. The study of a sample instead of complete enumeration may, at times, produce

more reliable results.

A census is appropriate when the population size is small.

Q.30 What is sampling error?

Sampling error: This error arises when a sample is not representative of the population.

Q.31 What are the types of probability sampling?

1. Simple random sampling with replacement

2. Simple random sampling without replacement

3. Systematic sampling

4. Stratified random sampling

5. Cluster sampling

Q.32 What are the types of non-probability sampling?

1. Convenience sampling

2. Judgmental sampling

3. Snowball sampling

4. Quota sampling

Q.33 What is Snow ball sampling?

The sampling process in which the 1st respondent is chosen by any of the probability
sampling and then next respondents are chosen by the references of the 1st respondent.

Q.34 What is Convenience sampling

When respondents are chosen according to the convenience of the researcher, this is
called Convenience sampling

Q.35 What is a focus group?

A focus group discussion involves collecting information from a representative group

of respondents in a neutral setting. The process generally involves a moderator who
maneuvers the discussion on the topic under study.

Q.36 What is Personal interview method?

The personal interview is a one to one interaction between the investigator/interviewer

and the interviewee. The purpose of the dialogue is research specific and ranges from
completely unstructured to highly structured

Q.37What is Projective techniques?

Projective techniques involve indirect questioning. The respondent is given a relatively

ambiguous stimuli and the underlying assumption is that the respondents would project
their underlying needs, emotions, beliefs and attitudes on to this object.

Q.38 What is Sociometricanalysis?

Sociometry involves measuring the choice, communication and interpersonal relations

of people in different groups. The computations made on the basis of these choices
indicate the social attraction and avoidance in a group.

Q.39 What do you mean by Measurement?

The term ‘measurement’ means assigning numbers or some other symbols to the
characteristics of certain objects. When numbers are used, the researcher must have a
rule for assigning a number to an observation in a way that provides an accurate
description.

Q.40 What do you mean by Scaling?

Scaling is an extension of measurement. Scaling involves creating a continuum on

which measurements on objects are located.