Research Method in business

(MBA 5012)
By G/meskel B.
ADU

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 Course Contents
Chapter One: An Overview of Research
Chapter Two: Research Proposal
Chapter Three: Research Design
Chapter Four: Sampling Design
Chapter Five: Data Collection
Chapter Six: Data Analysis
Chapter Seven: Writing the Research Report
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 Chapter -1
An Overview of Research
contents
Definition of research
Purpose of research
Characteristics of research
Types of research
The research process

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1.1. Definitions of Research
What is research?
The word research is composed of two syllabuses, re and search.

RE=Is a prefix meaning again, a new or over again

SEARCH =Is a verb meaning to examine closely and carefully, to test and try or to probe.
Together they form a noun describing a careful, systematic, patient study and investigation in
some field of knowledge, undertaken to establish facts or principles.

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 Cont’d
Research means finding answers to the questions.

It is a systematic search for truth.

Through research, new and original information, ideas about the world we live in, are
obtained.

Research is search for knowledge.

Research is defined as a scientific and systematic search for information on a specific topic.

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 Cont’d
• Research must be systematic and follow a series of steps and a rigid standard protocol.

• These rules are broadly similar but may vary slightly between the different fields of science.

• Scientific research must be organized and undergo planning, including performing literature
reviews of past research and evaluating what questions need to be answered.

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What is Business research?

• Is the systematic and objective process of generating information for aid in making business
decisions.

• Involves systematic gathering , recording and analyzing information about issues related to the
production & marketing of goods, services, organizations, people, place, idea, etc.,.

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 What is not research?
Research is not information gathering:
• Gathering information from resources such as books or magazines is not research; because it
does not contribute to new knowledge.

 Research is not the transportation of facts:

• Merely transporting facts from one resource to another does not constitute research;

• it does not contribute to new knowledge although it might make existing knowledge more
accessible

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 Which of these can be classified as research?
• Kebede prepared a paper on “computer usage in secondary schools” after
reviewing literature on the subject available in his university library.

• How effective is recruiting for new staff via the internet in comparison with the
traditional methods?

• What are the strategies that trade unions should adopt to ensure their future
viability?

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 1.2 Purpose of research
WHY IS RESEARCH CONDUCTED? research can be carried out:
• To identify and find solutions to the problems

• To help in making decisions

• To develop new concepts

• To find alternate business strategies

• To test new products and services

• To enhance profitability.

• To reduce operational costs

• To forecast future sales.

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 Cont’d
• To better understand shifts in consumer attitudes and tastes.

• To enable management to prioritize strategic options for the future.

• to develop theories, models and principles

• to help improve practice;

• to bridge the gap between theory and practice;

• to influence policymaking (e.g. policy in housing, crime, education, environment, etc.);

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 Cont’d
• For managers, the purpose of research is
• to provide knowledge regarding the organization, the market, the economy, or another area of
uncertainty.
• A financial manager may ask, “Will the environment for long-term financing be better two years from now?”
• A personnel manager may ask, “What is the reason for the company’s high employee turnover?”
• A marketing manager may ask, “How can I monitor my retail sales and retail trade activities?”

• Each of these questions requires information about how the environment, employees,
customers, or the economy will respond to executives’ decisions.
• Research is one of the principal tools for answering these practical questions.
• While researchers in different functional areas may investigate different,
• The ultimate goal of research is to supply accurate information that reduces the uncertainty in
managerial decision making.
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 WHO DOES RESEARCH?
• A very wide array of organizations and individuals do research. The following is just a small sample of the kinds of
organizations and individuals who conduct research:

• Government departments
• Manufacturing or service companies
• Research companies
• Consultancy companies
• Academics
• Voluntary organizations
• Advertising agencies
• Market research companies , etc.

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Motivation to conduct RESEARCH?
•What makes people to undertake research? The possible motives for doing research may be
either one or more of the following:
 Desire to get a research degree along with its consequential benefits;
 Desire to face the challenge in solving the unsolved problems,
 Desire to get intellectual joy of doing some creative work;
 Desire to serve to society;
 Desire to get respectability.

• However, this is not an exhaustive list of factors motivating people to undertake research
studies.

• Many more factors such as directives of government, employment conditions, curiosity

about new things, desire to understand causal relationships, social thinking and
awakening, and the like may as well motivate people to perform research operations.
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 1.3 Characteristics of(good) Research
• From the above definitions it is clear that research is a process of collecting, analyzing and
interpreting information to answer questions.
• But to qualify as a research, a process must have certain characteristics as listed below:
 Systematic
-this implies that the procedures adopted to understand an investigation follow the certain
logical sequence. The d/t steps can not be taken in a haphazard way.
-Reject the use of guessing & intuition, but does not rule out creative thinking
Rigorous (relevant)
One must be very careful (scrupulous) in ensuring that the procedures followed to find
answers to questions are relevant, appropriate and justified.

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 Cont…
Valid and verifiable/Replicable
This concept implies that whatever you conclude on the basis of your findings is correct and
can be verified by you and others.

Empirical
• This means that any conclusions drawn are based upon hard evidence gathered from
information collected from real life experiences or observations.

Critical
- The process of investigation must be foolproof/save and free from any drawbacks.
- The process adopted and the procedures used must be able to withstand critical scrutiny.

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 Cont…
Controlled
- In exploring the causality relation b/n two variables, the study must be set in a way that
minimizes the effects of other factors affecting relationship.
-In social science research, however, since you can not control external factors, you attempt to
quantify their impact.
Further more,
• Research requires expertise.
• Research strives to be objective and logical, applying every possible test to validate
the procedures employed, the data collected, and the conclusions reached.
• Research is characterized by patience and unhurried activity.
• Research is carefully recorded and reported.

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 1.4. Types of Research
• There are different bases in classifying researches; however we will see only the most common bases
Research can be classified from three perspectives. However, these perspectives are not mutually exclusive
a. The application of the research study;
b. The objectives in undertaking the research ; and
c. Approaches (the type of information sought) of research.
i. On the application of the study research
• As you will recall, it has been mentioned in definition that the general goal/purpose of research
is problem solving.
• The nature of the problem that the research attempts to solve could be theoretical or practical
– building a theory or solving immediate practical problems.
• These two types of problems that the research tries to solve leads to two broad classifications
of research: pure research and applied research.

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 Cont’d
a. Pure/Basic or Fundamental or theoretical/Research
involves developing and testing theories and hypothesis that are intellectually challenging to
the researcher but may or may not have practical application at the present time or in the
future.
• is conducted without a specific purpose or decision in mind, and it usually does not address
the needs of a specific organization.
• It attempts to expand the limits of knowledge in general, and as such it is not aimed at
solving a particular pragmatic problem.
• it can be used to test the validity of general theory or formulation of theory (e.g, one that
applies to all businesses) or to learn more about a particular business phenomenon.
• For instance, what motivates employees at work place?

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 Cont’d
b. Applied /operational/research
is conducted to solve the practical problems or concerns such as for policy formulation,
administration, and the enhancement of understanding of a phenomenon.

aims at finding a solution for an immediate problem facing a society an organization, an

institution, or an industrial/business firm

It is oriented to a specific problem.

It has a practical problem solving emphasis

Most of the researches in the social sciences are applied researches.

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2. Classification of researches based on specific objectives of the study

i. Exploratory Research-Is also called a ‘feasibility study’ or a ‘pilot study’.

• It is usually carried out when a researcher wants to explore areas about which s/he has little or
no knowledge.

• Conducted to clarify ambiguous situations or discover ideas that may be potential business
opportunities.

• Initial research conducted to clarify and define the nature of a problem.

-Does not provide conclusive evidence
-Subsequent research expected

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 Cont’d
It can be said that exploratory research is generally a precursor to a more formal study.
It helps save time, and resources.
• If a researcher is starting a new project, she/he probably should start with exploration. Exploratory research often
relies on secondary research such as reviewing available literature and/or data, or qualitative approaches such as
informal discussions with consumers, employees, management or competitors, and more formal approaches
through in-depth interviews, focus groups, or pilot studies.

Its purpose is to gain background information and better understand and clarify a
problem.

It is similar to a doctor's initial investigation of a patient suffering from an unfamiliar

malady for getting some clues for identifying it. “

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 Cont’d
ii. Descriptive Research –
It can help to understand a topic and lead to causal analysis.
Describes characteristics of objects, people, groups, organizations, or environments
• Its major purpose is description of the state of affairs as it exists at present.
Diagnostic analysis –Also includes attempts by researchers to discover causes even when they
can not control the variables (The purpose of correlational studies is not to establish cause-effect relationship among
variables but to determine whether the variables under study have some kind of association or not.)

 Seeks to diagnose reasons for example for market outcomes and focuses specifically on the beliefs and
Feelings consumers have about and toward competing products.
 This type of research tries to describe the characteristics of the respondent in relation to a
particular product.
• Descriptive research, therefore, involves a variety of research methods to achieve its goal; such as
Surveys, Correlation studies, Observation studies and Case studies.
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 Cont’d
Iii. Explanatory /Analytical/ Research-
aims at establishing the cause and effect relationship between variables.

• The researcher uses the facts or information already available to analyze and make a critical
evaluation of the data/information.
• The desire to know "why," to explain, is the purpose of explanatory research.

• The researcher goes beyond merely describing the characteristics, to analyze and explain why or
how something is happening.

• Thus, explanatory research aims to understand phenomena by discovering and measuring causal -
relations among them.
• use facts or information already available, and analyze these to make a critical evaluation
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 Cont’d

• Causal explanations argue that phenomenon Y is affected by factor X. In this example, the cause
or the reason is X which is technically termed as independent variable and the effect or the
behavior is Y which is also known as dependent variable.

• Some causal explanations will be simple while others will be more complex.

• There are two types of explanatory research:

1. Experimental research
2. Ex post facto research

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 Cont’d
Experimental Research: -
involves comparing two groups on one outcome measure to test some hypothesis regarding
causation.
In experimental research, the researcher intentionally manipulates one variable to measure its
effect on the other.

Ex Post Facto Research: -

means after the fact or retrospectively and refers to those studies which investigate possible
cause-and-effect relationships by observing an existing condition or state of affairs and
searching back in time for possible causal factors.

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 3. Classification of Research based on Approaches of Research

Based on type of data or approach involved , research can be termed as quantitative or

qualitative research

i. Qualitative Research
 it involves studies that do not attempt to quantify their results through statistical summary or analysis.
it seeks to describe various aspects about behavior and other factors studied in the social sciences and
humanities.
 In qualitative research data are often in the form of descriptions, not numbers. But sometimes results of
qualitative research are subjected to relatively less rigorous quantitative treatment.
The goal of qualitative research is to look for meaning, concepts, definitions, characteristics, symbols,
and descriptions of things.

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 Cont’d
ii. Quantitative Research
Is based on the measurement of quantity or amount.

 Is applicable to phenomena that can be expressed in terms of quantity.

• The objective of quantitative research is to develop and employ mathematical models, theories
and hypotheses pertaining to natural phenomena.

• The process of measurement is central to quantitative research because it provides the

fundamental connection between empirical observation and mathematical expression of an
attribute.

• This approach typically concentrates on measuring or counting and involves collecting and
analyzing numerical data and applying statistical tests.
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Other types of classifications
Classification of Research based on Designs as:
• experimental,
• quasi-experimental, and
• non-experimental
Classification of Research by Type of Data as:
• Primary research (also called field research) and
• Secondary research (also known as desk research)
Classification of Research by Fields of Study as:
• natural science research,
• social science research,
• educational research,
• behavioral science research,
• health science research, etc.
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1.5. Research process
• Research process consists of series of actions or steps necessary to effectively carry out research and
the desired sequencing of these steps.
• These activities indeed overlap continuously rather than following a strictly prescribed sequence.
• A brief description of these activities is as follows:
• Formulating the research problem;

• Extensive literature survey;

• Developing the hypothesis;

• Preparing the research design (including sample design);

• Collecting the data, execution ;

• Analysis of data (hypothesis testing if any);

• Interpret
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and report the results. 30
 Cont’d

Review the literature

Review
Concepts
Design
And
Research Collect Interpret
Define theories Formulate Analyse
(Including Data and
Research hypothesis Data
Sample report
Problem
Review Design)
Previous
I Research III IV V
findings VI VII

II

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1. Formulating the Research Problem
• Formulating a research problem is the first and most important step in the research process.
• What is a research problem?
 The term ‘problem’ means a question or issue to be examined.
 Research Problem refers to some difficulty /need which a researcher experiences in the context of either theoretical or
practical situation and wants to obtain a solution for the same.
• Formulation of the problem means defining the problem precisely. In other words, a problem defined is half solved.
• HOW DO WE KNOW WE HAVE A RESEARCH PROBLEM?
 Customer complaints
 Conversation with company employees
 Observation of inappropriate behaviour or conditions in the firm
 Deviation from the business plan
 Success of the firm’s competitor’s
 Relevant reading of published material (trends, regulations)
 Company records and reports.
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2. Extensive Literature Review
• Once the problem is formulated, a brief summery of it should be written down.
Reasons for Reviewing Literature
• Literature review has three functions:
• Bringing clarity and focus to the research problem
• Improving the methodology
• Broadening the researcher knowledge in the research area.

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3. Development of Working Hypothesis
• After extensive literature survey, researcher should state in clear terms the working hypothesis.
• Working hypotheses is tentative assumption made in order to draw out and test its logical or
empirical consequences.
• Hypotheses should be very specific and limited to the piece of research in hand because it has
to be tested.

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4. Preparing the Research Design
• Research design is defined as a blueprint or detailed plan for how a research study is to be
completed, operationalizing variables so they can be measured, selecting a sample of interest
to study, collecting data to be used as a basis for testing hypothesis and analyzing the results.
• It is the complete scheme or programme of the research.

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5. Determining Sampling Design
• All the items under consideration in any field of inquiry constitute a universe or population.
• Because of the difficulty, relative inaccuracy and biasness related to census study
determining sample, few elements from the population, becomes mandatory.
• In such cases, the researcher must decide the way of selecting a sample or what is popularly
known as the sample design.
• In other words, a sample design is a definite plan determined before any data are actually
collected for obtaining a sample from a given population.
• Samples can be either probability samples or non-probability samples.
• Probability samplings are those based on simple random sampling, systematic sampling,
stratified sampling, cluster/area sampling
• whereas non-probability samples are those based on convenience sampling, judgment
sampling and quota sampling techniques??.

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6. Collecting the data
• There are several ways of collecting the appropriate data which differ considerably in
context of money (costs), time and other resources at the disposal of the researcher.
• Primary data can be collected either through experiments or through survey.

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7. Analysis of Data
• The analysis of data requires a number of closely related operations such as:
a) Establishment of categories,
b) Coding,
c) Tabulation and
d) Drawing statistical inferences.

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8. Hypothesis Testing
• After analyzing the data, the researcher is in a position to test the hypothesis, if any, he/she
had formulated earlier.
• Do the facts support the hypotheses or they happen to be contrary?
• Various tests, such as Chi square test, t-test, F-test may be applied.
• If a hypotheses is tested and accepted, it may be possible for the researcher to arrive at
generalization, i.e., to build a theory.
• If the researcher had no hypotheses to start with, s/he might seek to explain his findings on
the basis of some theory.

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9. Preparation of the Research Report
• Finally, the researcher has to prepare the report of what has been done by him following
the appropriate formats and appropriate language

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