CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Research Design

Research methods involves a number of investigative instrument employed by the

researcher in arriving at the result. This usually calls first for a specific research

design. According to Jackson, (2001) descriptive research design includes case

study method, archival method, interview and focus group, qualitative data

analysis. There are numerous types of research design that are appropriate for

different research projects. The choice of which design to apply depends on the

nature of the problems posed by the research aims. Each type research design has

a range of research methods that commonly used to collect and analyze the type

of data that is generated by the investigations. Generally, there are three types of

research design which are descriptive, explanatory and exploratory. The

descriptive method of research design attempts to examine situations in order to

establish what is the norm that is what is predicted to happen again under the

same circumstances. Depending on the type of data sought, people can be

interviewed, questionnaires distributed, visual records made. This method is best

suited when the rationale is not to find cause and research relationship between

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the research problem but rather provide a descriptive view of the event, social

phenomenon or research problem (molhotra, 1996).

The study used descriptive research design. This kind of research design aims at

generating information after the incident has occurred. The research design

looked at the reasons why the situation behaves the way it was. The design

exploited both qualitative and quantitative approaches. Qualitative approach

included use of interviews, while quantitative approaches involved use of

descriptive statistics generated with frequency tables, graphs, and Charts. These

approaches were adopted to enable the researcher get and analyze relevant

information concerning people’s opinions about the impact of inventory

management on performance of Companies in Cameroon.

3.2 SOURCES OF DATA AND SAMPLING TECHNIQUE

3.2.1 SOURCES OF DATA

3.2.1.1) PRIMARY DATA

Primary data refers to information gathered for a precise purpose at hand. It is

the information taken first-hand by the researchers, who collects the data and

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completes the study process without referring to any second-hand sources. For

this study, primary data were used to get information from the managers of

organizations through use of questionnaires. The advantages of using primary

data are that, a more reliable and exact information needed is obtained, Research

is oriented for specific goals and purpose, cutting out possibility of wasting

resources, the researchers can change the course of study whenever needed, and

choose platforms for observation well-suited for projects, gives original research

quality, and does not carry bias or opinions of third parties. Primary data also has

the following disadvantages: - Primary research may ask for huger expense than

secondary research, the procedure is more time consuming, and costs a lot of

assets, the outcome from research audience may not be always feasible.

3.2.1.2) SECONDARY DATA

It is the information that someone has already researched on, prepared, and

analyzed. The results are available for use, and can help other future researchers

in referring the data for studies. Some of the examples of secondary researches

are government consensus, public agency annual reports, magazines,

newspapers, journals, online databases etc. Secondary data on the other hand is

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information that already exists somewhere, having been collected for another

purpose (Kotler, Armstong et al 1999).

Secondary data has the following advantages: - Cost-effect, ready-made

observations, less time spent on gathering information, statistically reliable, less

requirement of expertise from internal team, trustable and ethical practices

existing to support or organize other researches.

It has the following disadvantages: - Information may be unsuitable for current

research project, the data may lack details that fulfill goal of the client at present,

not customized, may require intensive study to judge validity of data.

This study uses both primary and secondary data. Primary data is used to collect

information from the mangers of companies regarding the various inventory

management technique they use and how it affects their organization. A

questionnaire carrying a series of easy understandable questions is used for this

purpose. Secondary data on the other hand is used to gather data regarding the

performance of companies in Cameroon. Performance variables such as

profitability, growth, market value, are collected from different sites on the

internet, newspaper and magazine publications.

3.2.1.3 INSTRUMENTS OF DATA COLLECTION

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As earlier explained, primary data needed for this study was collected with the

use of questionnaires and secondary data was collected from pre-sources such as

newspapers and magazine publications as well as the internet.

The questionnaire is divided into three sections carrying a total of sixteen

questions. The first section seeks to gather information concerning the

characteristics of the sample-interested in the sector of activity to know the type

of business activity carried out, the number of employees to know the size of the

business and the age of the company. It also sought the position held by the

different individuals of their various enterprises alongside the number of years

they have held the various positions.

The second section is devoted to the independent variable. It has simple multiple

choice questions and others are seemingly arranged on a number of Likert scales

where respondent concise level of satisfaction/dissatisfaction can be ascertained.

The third section is devoted to the dependent variable. It is based on gathering

information regarding organizational performance.

Secondary data is obtained from the bulk of text books and articles. Again,

journals, website, are also used to get more information. It is worth noting that

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most of the whole work load on data collection is obtained from the primary

source of data collection.

3.2.2 SAMPLING TECHNIQUES

PROBABILITY DESIGN OR RANDOM TECHNIQUE

Probability Sampling is a sampling technique in which sample from a larger

population are chosen using a method based on the theory of probability. For a

participant to be considered as a probability sample, he/she must be selected

using a random selection. The most important requirement of probability

sampling is that everyone in your population has a known and an equal chance of

getting selected. For example, if you have a population of 100 people every

person would have odds of 1 in 100 for getting selected. Probability sampling

gives you the best chance to create a sample that is truly representative of the

population. Probability sampling uses statistical theory to select randomly, a small

group of people (sample) from an existing large population and then predict that

all their responses together will match the overall population. Probability

sampling techniques is subdivided into the following types:- Simple random

sampling, which as the name suggests is a completely random method of

selecting the sample.

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Stratified random sampling, involves a method where a larger population can be

divided into smaller groups, that usually don’t overlap but represent the entire

population together.

Cluster random sampling, is a way to randomly select participants when they are

geographically spread out.

Systematic sampling, is when you chose every “nth” individual to be part of the

sampling.

The main benefits of this technique is that it is cost effective, simple, easy and

non-technical or easy to understand.

NON PROBABILITY SAMPLING

Non-probability sampling is a sampling technique where the odds of any member

being selected for a sample cannot be calculated. It’s the opposite of probability

sampling, where you can calculate the odds. In addition, probability sampling

involves random selection, while non-probability sampling does not–it relies on

the subjective judgement of the researcher. The odds do not have to be equal for

a method to be considered probability sampling. For example, one person could

have a 10% chance of being selected and another person could have a 50%

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chance of being selected. It’s non-probability sampling when you can’t calculate

the odds at all. A major advantage with non-probability sampling is that —

compared to probability sampling — it’s very cost- and time-effective. It’s also

easy to use and can also be used when it’s impossible to conduct probability

sampling (e.g. when you have a very small population to work with). One major

disadvantage of non-probability sampling is that it’s impossible to know how well

you are representing the population. Non probability sampling is subdivided into

the following types: -

Convenience sampling, this involves collecting a sample from somewhere

convenient to you.

Haphazard sampling, where a researcher chooses items haphazardly, trying to

simulate randomness. However, the result may not be random at all and is often

tainted by selection bias.

Purposive sampling, where the researcher chooses a sample based on their

knowledge about the population and the study itself.

Snowball Sampling: where research participants recruit other members for the

study. This method is particularly useful when participants might be hard to find.

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Expert sampling, in this method, the researcher draws the sample from a list of

experts in the field.

The researcher employed purposive in addition to Snowball Sampling during the

process of data collection from the study respondents. The study used purposive

sampling techniques because it was assumed to allow the researcher to select a

sample with experience and knowledge about the study variables and this

method was used to select staff but non manager respondents and clients’

respondents from the study area. However, Snowball Sampling was used during

the selection of managers from the study area as the researcher first select one

manager who helped him in the way of getting in touch with another respondent

until the total number of the respondents in the same category is obtained.

3.3 DEFINITION AND MEASURES OF VARIABLES

A variable is defined as anything that had quantity or quality that varies. There are

different types of variables such as the dependent variable, which is the variable a

researcher is interested in. An independent variable is a variable that affects the

dependent variable. Constant variable: As the name suggests, it is the variable

that the researcher wants to remain the same. Often, there is more than one

control or constant variable in a research experiment. The researcher will want to

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observe these control variables as much as the dependent variable. But why is

this important? The reason is that if the control variables are not held constant,

the researcher will not know if the independent variable caused the change in the

dependent variable or if the change was due to the control variable.

3.3.1 Variables of the characteristics of the sample:

The first variable in this section is the business sector of activity which was

measured on a nominal scale. This business sector refers to the various kind of

trade that the company engage in, whether primary, secondary or tertiary sector.

The second variable is the age of the company. This simply refers to how long the

company has existed.

The third variable was the number of employees the business had. The objective

is to know the size of the business.

The fourth variable was the position held by the respondent and lastly the age in

that position. This was to sought the position held by the different individuals of

their various enterprises alongside the number of years they have held the

various positions.

3.3.2 variables on the independent variable

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All the variables in this section were measured on a nominal scale and was

answered on a 5 point likert scale ranging as strongly disagree, disagree,

undecided, agree and strongly agree.

The first variable on this section was to know the extent of control management

uses to check inventory and to write off products which are no longer good for

sale (outdated).

The second variable was to know how management keep track of the sock of

inventory.

The third variable was to examine the level of control on inventory.

And the last variable was to know the various inventory management techniques

used by management of organization.

3.3.3 The variables of the dependent variable

All the variables in this section were also measured on a nominal scale and was

answered on a 5 point likert scale ranging as strongly disagree, disagree,

undecided, agree and strongly agree.

The first variable in this section was to know the level of return on investment in

inventories. This is to know the sales volume

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The second variable was to know the level of efficiency in the management of

inventory in the organization.

The third variable was to measure the level of effectiveness in the management

of inventory in the organization.

And lastly the fourth variable was to measure the level of profitability of the

organization.

3.4 METHOD OF DATA ANALYSIS

In order to analyze the impact of inventory management on organizational

performance primary data in the form of questionnaire are subjected to detailed

analysis. Data gathered by the questionnaire were quantitative in nature where

Likert Scale was predominantly used. The data was subjected to statistical analysis

and where necessarily; graphs, tables and pie charts were used with the aid of

SPSS in the analysis.

3.4.1) UNIT VARIABLE ANALYSIS

Unit variable or univariate analysis is a form of quantitative, statistical, evaluation.

This method of analysis separately studies the findings regarding each variable in

a data set, and therefore each individual variable is summarized on its own.

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Consequently, univariate data does not look at relationships between various

variables (like bivariate and multivariate analysis); its sole purpose is to describe

one aspect of a piece of research. The easiest way of consolidating the data for

one variable is either in a frequency distribution table or bar graph, although

other formats can be used (e.g. pie chart, histogram etc.). This means that the

number of cases in a particular category (variable) are analyzed in one of these

chosen means of presentation.

3.4.2) MULTI VARIABLE ANALYSIS

Multivariate analysis is based in observation and analysis of more than one

statistical outcome variable at a time. In design and analysis, the technique is

used to perform trade studies across multiple dimensions while taking into

account the effects of all variables on the responses of interest. The development

of multivariate methods emerged to analyze large databases and increasingly

complex data. Since the best way to represent the knowledge of reality is the

modeling, we should use multivariate statistical methods. Multivariate methods

are designed to simultaneously analyze data sets, i.e., the analysis of different

variables for each person or object studied. Keep in mind at all times that all

variables must be treated accurately reflect the reality of the problem addressed.

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There are different types of multivariate analysis and each one should be

employed according to the type of variables to analyze: dependent,

interdependence and structural methods. In conclusion, multivariate methods are

ideal for the analysis of large data sets and to find the cause and effect

relationships between variables; there is a wide range of analysis types that we

can use.

This study uses a multi variable analysis approach to carry out its findings and the

analysis is expressed in the form of a simple linear regression showing the

relationship between the independent variable which is inventory management

(IM) and the dependent variable which in this case is the performance of

companies in Cameroon. This take into consideration the turnover variable (t) and

the profitability variable (p).

∑Y=α +β∑IM + εi

Where OP= organizational performance

IM= inventory management

εi = error term

α= constant

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β= coefficient

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