UNIT I

Business Research

RESEARCH-MEANING
Search for knowledge Scientific and systematic search for pertinent information on specific topic Seeks answer to certain questions which have not been answered so far Depends upon the human effort Most important process for advancing knowledge for promoting progress

 Research=Re+ search Means to observe the phenomenon again and again from different dimensions Collects data and draws some conclusions based on it There is a fundamental assumption that there is no relationship between the antecedents and certain consequents

What is Research?
Research is a systematic or scientific investigation:
To search for solutions to the existing problems To establish relationship, if any, among variables and To find something new to increase knowledge

DEFINITIONS
Research is a systematized effort to gain new knowledge-Redman and Mory Research comprises of defining and redefining problems, formulating hypothesis, collecting, organising and evaluating data, making deductions and reaching conclusions-Clifford Woody

CHARACTERISTICSGENERAL
Gathers new knowledge or data from primary or first-hand source Places emphasis upon the discovery of general principles Exact, systematic and accurate investigation Uses certain valid data gathering devices Logical and objective Researcher resists temptation to seek only the data that support his

 Researcher eliminates personal feelings and preferences Endeavors to organize data in quantitative terms Patient and unhurried activity Willing to follow procedures Carefully recorded and reported Conclusions and generalizations are arrived carefully and cautiously

CHARACTERISTICS-SPECIFIC
A sound philosophy of social studies as the basis of research Based on insight and imagination Requires inter-disciplinary approach Usually employs deductive reasoning process Should come out of a desire to do things better Not exact as research in physical

 Not the field of the specialist only Requires inexpensive material Based on the subjectivity and intangibility of social phenomena Perhaps incapable of being dealt through empirical method Based on inter dependence of causes and effect Cannot be a mechanical process

OBJECTIVES
Theoretical objective: formulate new theories, principles or laws and contribute some basic knowledge to the human knowledge Factual objective: find out new facts which is descriptive in nature. Usually done in history Application objective: contribute new knowledge and applications

SCOPE
Financial Management Research: - Financial Analysis: capital structure, ratio analysis, valuation of companies - Rationing resources: sources of funds, opportunities for profit, cost of capital - Management of funds and assets - Financial markets and intermediaries

Contd..
Production Research: -also called manufacturing research -Product development -Cost reduction -performance improvement - Work simplification - Inventory control

Contd..
Marketing Research: Marketing policy Product research Market research Sales management research Channels of distribution Advertising and sales promotion MIS

Contd..
Personnel Research: Wage and salary administration Job and manpower requirements Morale and attitude Health, safety and working conditions - Job enrichment programmes - Labour relations and collective bargaining

Contd..
Accounting Research - Effects on financial statements - Different choices of accounting methods - Changes in accounting techniques Research in business economics: - Pricing and factors of production - Economic forecasting - Macro economics

Contd..
Co-operation research: - Associated with business management - Building up factual data required for co-operative planning and policy making Environmental Research: - Research on national policies - Trade practices

SIGNIFICANCE
Assistance in business decisions Designing effective policies for marketing Provides best solutions for optimisation problems Maintain good labour relations Adjust demand and supply To know the projected profit/losses of a company To build good customer relations

TYPES
According to intention: 1.Pure research 2.Applied research 3.Exploratory research 4.Descriptive research 5.Diagnostic Research 6.Evaluation Research 7.Action Research

Contd..
According to method of study 1.Experimental research 2.Analytical research 3.Historical research 4.Survey Research

Contd..
According to precision in research findings: 1.Qualitative Research 2.Quantitative research 3.Longitudinal research 4.One time research 5.Field setting 6.Laboratory 7.Conclusion oriented

ACCORDING TO INTENTION
Pure Research: Sake of knowledge No intention to apply it in practice Also called basic or fundamental research - Taken out of intellectual curiosity - Aims at extension of knowledge - Lead to either discovery of knowledge or refinement of existing

Contd..
Applied research To find solution Problem oriented and action directed Seeks immediate and practical result Eg. Marketing research Incidentally contribute to discovery of new facts

Contd..
Exploratory or formulative research: - Preliminary study of an unfamiliar problem - Usually undertaken to gather information for clarifying concepts - Helps the researcher to find out whether the problem can be further researched or not

Contd..
Descriptive Research: - Includes surveys and fact finding enquiries - Purpose is to describe the state of affairs as it exists at present - No control over the variable - Only report what has happenend

Contd..
Diagnostic research: - Directed towards discovering what is happening, why and what can be done about it - aims at identifying the causes of a problem and the possible solutions for it

Contd..
Evaluation Research: - One type of applied research - Assessing the effectiveness of social or economic programme - Impact of developmental project - Quality and quantity of the activity and its performance

Contd..
Action research: - Type of evaluation research - Evaluation study of action programme - Solving a problem for improving an existing situation - Eg. Land reform programmes, rural development programmes etc.,

According to method of study

Experimental Research: - Designed to assess the effects of particular variables on a phenomenon - Determine whether the variables are related to each other or not - Eg., soil fertility and crop yield

Contd..
Analytical Research: - System of procedures and techniques of analysis applied to quantitative data - Consist of mathematical models applicable to numerical data

Contd..
Historical research: - Study of past records and other information - Discovering the trends in the past - Descriptive in nature - Depend upon logical analysis of recorded data rather than direct observation

Contd..
Survey Research: - Fact finding study - Involving collection of data directly from a population at a particular time - Through observation or interview - Tool for both basic and applied research

According to precision in research findings

Quantitative and Qualitative research: - Quantitative research is based on the measurement of quantity or amount - Applicable to phenomena that can be expressed in terms of quantity - Qualitative research is concerned with qualitative phenomena involving quality or kind

Contd..
One time research and longitudinal research: - One time research is confined to single period - longitudinal research is carried on to several time periods

Contd..
Field setting research and laboratory research: - Depending upon the environment in which it is to be carried out

Conclusion oriented or decision oriented research:

- In conclusion research researcher is free to redesign the enquiry as he proceeds and can conceptualise as he wishes - But in decision research the researcher is not free to undertake research according

Research Process
Methodology or well-defined procedure of conducting a research Involves various steps which are neither mutually exclusive nor separate or distinct A scientific enquiry First the researcher chooses the area of research Major functional areas such as marketing, finance, human resource or production Specific areas are identified depending upon the researchers interest, inclination or scope

Steps in research process

1. 2. 3. 4. 5. 6. 7. 8. Defining the research problem Review of literature Formulating hypotheses Research design Data collection Data processing and analysis Interpretation and inference Solution and Conclusion

1. Defining the research problem

Process of identifying and pinpointing a specific problem which requires a detailed investigation The topic and objective depend on the well-defined research problem Defining the problem without any ambiguity goes a long way in investigating the problem or finding an appropriate solution

2. Review of Literature
Eye-opener for a researcher Fine-tuning the definition of the problem Collection of facts, details on concepts/theories and importantly findings of earlier investigations/researches relevant to the problem in the process Academic/industrial journals, popular magazines, proceedings of seminars/workshops/conferences,

3. Formulating Hypotheses
Proposition, assumption or a tentative answer is formulated to focus the research ad to keep the researcher on the right track Null or Alternative hypothesis are either accepted or rejected based on the statistical results No need to frame hypothesis in exploratory research

4. Research Design
Blueprint of research process Plan of actions to collect and analyze data aiming at combining the relevance of the purpose of research ad economy of execution Depending on the nature of the problem, the design could be exploratory, descriptive, diagnostic or experimental Research design includes the

 Operational Design: Collection of data from entire population (census) or a sample Sampling Design: A definite plan for obtaining a sample from a given population Observation Design: Methods or tools such as interview schedule, questionnaire, personal/telephonic interview, participant/non-participant observations etc to collect information

5. Data Collection
Adequate and reliable data are collected employing appropriate technique Data could be from the entire population or from a sample in case of a large population

 Data processing includes editing, coding and tabulation The tabulated data are analyzed employing appropriate tools Statistical analysis determines whether the effects, relationships or differences are significant or not Hypotheses are either accepted or rejected based on statistical analysis

6. Data processing and Analysis

7. Interpretation and Inference After testing the hypotheses through

statistical analyses, the results are interpreted taking into consideration the past findings and present situations An interpretation demands thorough subject knowledge, analytical ability and common sense Inferences are drawn from the interpreted data Inferences are the final findings of

8. Solution and Conclusion

Solutions are derived from interpretations /inferences It is the answer to a problem in question Conclusions are arrived at based on the findings It is generalization of the findings which is the essence of the whole study

Pilot Study
Before doing a full-fledged research involving considerable allocation of resources, it is advisable to conduct a pilot study Pilot study is a Mini-Project or a small-scale replica of the main study Miniature rehearsal of the main research

Uses of Pilot study

Fine-tuning the research problem and studying its various dimensions Reframing or refining the hypotheses, if necessary Selecting the appropriate target group for collection of data Deciding the adequacy and appropriateness of the sampling technique as well as the sample size

 Sorting out the problems associated with different methods of data collection and arriving at the best tool to collect relevant data Confirming the appropriate statistical tool to test the hypotheses Identifying the unforeseen practical problems Estimating the probable cost, time and resources needed Determining whether the problem requires an elaborate study/investigation Deciding ultimately, whether it is worth undertaking the main research

Criteria Of Good Research

1.Purpose should be clearly defined. 2. Research Process (source of data etc) should be described in sufficient detail-except when secrecy is required-This will help verify, correct and extend knowledge, keeping the continuity of what has already been achieved.
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3.

Design (Sampling, questionnaire, observation etc) should be thoroughly planned so as to yield objective results. 4. High ethical standards -from misusing information , to forcing respondents to answering questions to animal rights and human dignity- Dilemma 5. Limitations should be frankly revealed (eg., flaws in design) so that the decision maker is made aware. 6. Analysis of data should be adequate and methods of analysis appropriate. Should check for reliability and validity, and probability of error 50 7. Unambiguous presentation

8. Conclusions should be confined to those justified by the data of the research. Good research is systematicstructured with specified steps taken in specified sequence in accordance with well-defined rules Good research is logical: logical reasoning makes research more meaningful in the context of decision making Good research is empirical: dealing with concrete data that provides the basis for external validity to research
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Problem Identification
Sources for identification of problems
Professional Literature Professional experience Inference from theories and laws

Justification for selecting a problem

Researchers suitability General Rule of relevance and importance

Criteria for selecting a problem

 Defining the problem

Specific and achievable objectives Defining problem must help formulation of hypotheses

Statement of a problem
With the help of a pilot study or experts guidance, the problem gets focused Consider the possibility of a workable solution

Steps in defining a problem

Stating the problem in a general way Understanding the nature of the problem thoroughly Surveying the literature to determine the dimensions of the problem Developing ideas by discussing with guides and experts Rephrasing the problem into a workable research problem

Review of Literature
Surveying and examining all available literature (information) concerning the research problem Right from the concepts/theory through methodology to the style of presentation of a report Not a casual reading but as serious and important as the research itself

Sources
Books Journals Magazines Other sources
Reports of committees/commissions or annual reports Proceedings of conferences, seminars & workshops Newspapers, audio-video tapes, microfilms or CDS Internet

Need/Purpose
Gaining preliminary orientation and background knowledge of the research Identifying and understanding the concepts related to the topic, the potential relationships, impact etc., Finding out the work already undertaken by others in the same line and avoid duplication Studying how others have structured

 Familiarizing with the research designs, methodology, techniques, style of report etc., Developing appropriate research designs Scouting for sources of supportive data and inferences for discussion Deciding on a reasonable sample size Formulation of hypothesis Updating the knowledge and searching for lacunae in the studies

Hypothesis
Excepting exploratory or fact finding investigation, hypotheses can be developed in all researches Considered as the principal instruments in research Suggests new experiments, observations or surveys Widely used in business for making decisions

Definition
Statement to be verified by survey, observation or experiment Tentative solution to a problem of the researcher or a tentative answer to the researchers question to be verified by appropriate means Contextual statement of relation between two or more variables

Sources
Theory Observations Intuition or personal experience Analogies (comparisons) Review of literature General culture

Characteristics of a good hypothesis

Simple language Specific and precise Amenable for testing with empirical data Testable within reasonable time Constructed with known facts and theory Able to predict/anticipate the previously unknown data Relationship between variables must be stated Provide an answer to the problem

Function/Role of hypotheses
Specifies sources of data which shall be collected, analysed and interpreted to answer a problem It indicates the appropriate type of research as well as the research techniques It may contribute to the development of theory

Types
Descriptive hypotheses: typically state the existence, size, form or distribution of some variable
Nearly 50% of current population of rural India is unemployed In Indian IT industry, 80% of the employees opt for stock as incentive In MNCs, the average age of top level managers is not more than 45 years

 Relational Hypotheses: describe relationships among variables with respect to some case
The Americans perceive that Japanese cars are superior to American cars EI quotient of managers in service industry is higher than the manufacturing industry 1.Correlational relationship: simply state some relationship without specifying cause-effect relationship 2.Explanatory or Casual Hypotheses: state that one variable causes and

 Common sense Hypotheses:

Common sense ideas of day-day observations Eg. High society consumers rarely patronize discount-sale outlets

Complex Hypotheses:
Abstract and not understood by ordinary people

All hypotheses discussed above ultimately are classified into Null Hypothesis and Alternative Hypothesis

 Null Hypothesis
Generally states there is no difference between X and Y, there is no association between X and Y where X and Y are two variables

Alternative Hypothesis
States there is difference between X and Y, there is association between X and Y Also known as research hypothesis as most of the researchers are interested in AH

Basic concepts of Hypothesis

testing
Formulation of NH and AH:
Based on the problem identified, NH and AH are formulated Formed before the sample is drawn NH is the hypothesis the researcher wishes to disprove AH is usually the one which the researcher wishes to prove

Level of significance: Important concept in hypothesis testing Always some percentage(usually5%) Chosen with great care, thought and reason 5% LS means the researcher is willing to take as much as 5% risk of rejecting the null hypothesis when Ho happens to be true Usually determined in advance before testing the hypothesis

3. Decision rule or test of hypothesis: Given Ho and Ha we make a rule known as decision rule We accept Ho or reject Ho Eg. Test 10 items and plan a decision that there are no or 1 defective item, we reject Ho (accept Ha)

4. Type I or Type II error: Reject Ho when Ho is true-Type I Accept Ho when Ho is not true-Type II Type I denoted by Type II denoted by When we try to reduce Type I error the probability of committing Type II error increases Hence there must be a trade-off made between two types of errors

5. Two tailed and One tailed test: Two tailed test-rejects null hypothesis if the sample mean is significantly higher or lower than hypothesised value of the mean population. Appropriate when the specified value of alternative hypothesis is not equal to the specified value of the null hypothesis

HYPOTHESIS-Procedure for testing

Making formal statements Selecting a significance level Deciding the distribution to use Selecting a random sample and computing an appropriate value Calculate the probability Comparing the probability

HYPOTHESIS-Functions
Gives a definite point to investigation and guides the direction on the study Specifies the sources of data and in what context they shall be studied Determines the data needs and defines which facts are relevant and not Determine the most appropriate technique of analysis Contributes to the development of theory

RESEARCH DESIGN
Decisions regarding what, when, where, how, by what means concerning an enquiry constitute a research design Conceptual structure within which the research is conducted Blue print for the collection, measurement and analysis of data Guides the researcher in the process of collecting, analysing and interpreting observations

RESEARCH DESIGN
Includes 1. Sampling design-method of selecting items to be observed 2. Observational design-conditions under which observations have to be made 3. Statistical design-question of how many items are to be observed 4. Operational design-techniques of how the 3 designs are to be carried out

RESEARCH DESIGN-Need
Facilitates smooth sailing of various research operations Makes research as efficient as possible Maximal information Minimum expenditure of time, money and energy

RESEARCH DESIGN-Steps
Review of earlier literature Sources of information to be tapped Development of Bibliography Nature of study Objective of study Socio-cultural context of study Geographical areas to be covered Periods of time to be covered or time dimension of the study

RESEARCH DESIGN-Steps
The basis for selecting the data Techniques of study The control of error Establish the reliability and validity of test instruments Chapter Scheme

RESEARCH DESIGN-Factors affecting RD

Availability of sufficient data Proper exposure to the sources of data Availability of time Availability of money and manpower Internal and external and controllable & uncontrollable variables Ability, skill, knowledge and technical background of the researcher Utility and applicability of the research result

Case Study Method

An in-depth and thorough study of an organisation, a group of people, an industry, an individual or a phenomenon Sort of a descriptive design When reasons are sought for the happenings, it becomes descriptivecum-diagnostic design Eg: To study the phenomenal growth of Reliance Industries

Characteristics
Describes the peculiarities of a case Probes uncommon, unique, extreme or even typical cases whose features are not studied by usual methods Provides a wealth of information for intensive analysis for specific details Examines the complex factors to understand the causative variables Long term process

Merits
All methods of data collection are useful Any dimension of any topic can be studied It may be conducted in any kind of setting It gives a wide range of insights It is more useful to study groups or processes

Demerits
Generalisation of the findings is not possible or is very limited It is more time-consuming It is inadequate to study macro problems Researchers bias is likely to be more