Chapter 1: Introduction to Business Research Methodology

1.1 What is research ?

1.2. Business research

1.3 Research Methodology vs. Research Method

1.4. Research Objectives, Motivation and Significance

1.5. Research and Scientific Method

1.6. Classification and Types of Research

1.7 Stages in research Process

1.8. Characteristics of good research

1.9. Problems encountered by researchers.

 Research Quote

"The secret of success is to know something nobody else knows. “

Aristotle

“Somewhere, something incredible is waiting to be known”.

Carl Sagan

To do successful research, you don’t have to know every thing, you

just need to know one thing that isn’t known
1.1. What is research ?
 Research is an organized and systematic way of finding solutions to questions or
problems.
 Research: is a systematic, empirical, initial and patient study to analyze an issue,
situation or establish a relationship for the advancement of knowledge or to solve
problems.
 Systematic: why it is called systematic? because it follows certain steps or

procedures that are logical in order to get the most accurate results.

 Organized: because there is a structure or method in doing research. It is a planned

procedure, not a spontaneous one.

 Finding Answers: is the end of all research. Whether it is the answer to a

hypothesis or even a simple question, research is successful when we find answers.

 Questions/problems: are central to research. Research is focused on relevant,

useful, and important questions. With out a question, research has no focus, drive,

or purpose.
 Generally, different authors in many ways have defined the word research.

 Some people consider research as a movement from known to unknown. It

is indeed a voyage of knowledge.

 For some people on the other hand research implies an art of scientific

investigation to the state of nature or phenomenon.

 However, to avoid let us confine ourselves to the definition of research

given by Klopsteg which is the most comprehensive definition of research.

 According to him; '„Research is original and creative intellectual activity, carried out in the

laboratory, or in the field which endeavors to discover new facts and to apprise and

interpret them properly in the light of previous knowledge. With constantly increasing

understanding, it revises previously accepted conclusion, theories and laws, and makes

new application of its findings”.

 Thus, research is carried out not only in the laboratory but also it can be carried out in

different places like in the field as well.

 Research is not only original and creative activity i.e. it will not always discover new

facts. It can also revise and verify the validity of previously accepted facts theories and

principles, which is the task of academic or basic research.

What is not Research?

 Research isn‟t information gathering:

• Gathering information from resources such books or magazines isn‟t

research.

• No contribution to new knowledge.

 Research isn‟t the transportation of facts:

• Merely transporting facts from one resource to another doesn‟t constitute

research.
1.2. Business research

 Business research : refers to systematic collection and analysis of data in order to

find answer to problems facing by the management.

 The application of the scientific method in searching for the truth about business

phenomena. These activities include defining business opportunities and

problems, generating and evaluating ideas, monitoring performance, and

understanding the business process (Zikmund,2010).

 Business research is defined as the systematic and objective process of

generating information for aid in making business decisions. It helps in making

business decisions.

 The increasingly complex nature of business operations and decision making

demands a systematic and thoughtful approach.

 Business and marketing research are common activities in medium-sized and

larger companies and most of the decision making in these companies is based

on research.

 Thus, importance of research in business studies in schools has therefore

increased.
 Examples of real-life situations

o Whether a company is launching a new product or trying to enter a new market, it has first
to undertake some research to decide which segment to target, whether there will be
demand for its product (sales forecast), and how to develop a marketing plan for the new
product or new market.

o A multinational firm wants to establish a production facility in another country after

determining its technical and economic feasibility.

o A government agency wants to ascertain the satisfaction level of its employees.

o A financial institution wants to invest in commodities and commissions a study to

determine the past trends and forecast future returns in a portfolio of commodities.

o MNC wants to find out the trends in retail and wholesale sector

 This requires research that has to be undertaken by the company itself or by a market
research company.
Purpose of Research in business

 To gain a competitive advantage.

 To test new products and services.

 To solve a management/organizational problem.

 To provide information which may help to avoid future business problems.

 To forecast future sales.

 To better understand shifts in consumer attitudes and tastes.

 To enhance profitability.

 To reduce operational costs.

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

Decision making and research

 Decision making is central to life career and business

 Always in life career and business we are faced with more number of

alternatives from which we need to choose the best one.

 This act of choosing the best alternative is decision making.

 For effective decision making one should have good knowledge of all the

alternatives, so that one can choose the best one.

 Research is inevitable to help in making logical decision, particularly when

the outcome of the decisions either Uncertain or Risky.

1.3. Research Methodology vs. Research Method

 Some literature use this terms interchangeably. To avoid confusion the definition and

differences of these terms are given as follow.

Research Methods: includes all those approaches and techniques that are used in

conducting a particular research.

o Research methods can be put into three groups:

 The first group include approaches or techniques of data collection

 The second group consists of those statistical techniques used to establish relationship

between variables.

 The third group consists of those techniques involved in evaluating the accuracy of the

result obtained.
o Research methods falling in the above stated last two groups are generally taken as the
analytical tools of research.
Methodology: can be understood as a science of studying how research is done
scientifically.

 It includes all steps that are generally adopted by a researcher in studying his/her
research problem along with the logic behind them.

 Researchers not only need to know how to develop certain techniques but also need to
know how to apply particular research techniques, which of these methods or
techniques, are relevant , what would they mean and indicate , assumptions underlying
various techniques, the criteria by which they can decide that certain techniques and
procedures will be applicable to certain problems and others will not.

 Thus, when we talk of research methodology we not only talk of the research methods
but also consider the logic behind the methods we use in the context of our research
study and explain why we are using a particular method or technique.

 Research methodology has many dimensions and research methods do constitute a part
of the research methodology. Thus, the scope of research methodology is wider than
that of research methods.
1.4. Research and scientific Method

 For a clear perception of the term research, one should know the meaning of

scientific method.

 Research methodology and technique are mostly different from one science to

another or can be different from research to research.

 The philosophy common to all research methodology and technique is called

scientific methods.

 Scientific method is the pursuit of truth as determined by logical

considerations.

 Thus, “the scientific method encourages a rigorous, impersonal mode of

procedure dictated by the demands of logic and objective procedure.”
 Accordingly, scientific method implies an objective, logical and systematic

method, i.e., a method free from personal bias or prejudice, a method to

ascertain demonstrable qualities of a phenomenon capable of being verified, a

method wherein the researcher is guided by the rules of logical reasoning, a

method wherein the investigation proceeds in an orderly manner and a method

that implies internal consistency.

Steps in scientific method

 As we have said scientific method is the philosophy common to all research

methodology and technique in any research in any branch of science.

 The steps in scientific methods are summarized as follows.

Observation: the first or initial step in the scientific method is a minute and careful
observation of the subject matter of research.

Recording: The next step to observation in scientific method is a careful recording of all
information (data) obtained in the first step, i.e., observation.

Classification: the collected data (information) have to be classified and organized. The
classification implies systematically arranging and organizing the recorded data on the
logical basis so that they will become viable for the analysis and to make generalization.

Generalization: It is an extension of general laws and principles on the basis of the pattern
exhibited by the classified material. This general law is known as scientific law.

Verification: The general principle must be also verified. The validity of scientific
principles can be confirmed by examination.
1.5. Objectives, Motivation and significance of Research

Objectives

 The purpose of research is to discover answers to questions through the

application of scientific procedures. Thus, the main aim of research is to

find out the truth which is hidden and which has not been discovered yet.

 Though each research study has its own specific objectives, any research

has got the following common (general) objectives.

o To generate new knowledge, principle and scientific law

o To review and synthesize existing knowledge. That is, to verify the validity of

the previous work.

o To investigate some existing situation or problem

• To explain new phenomenon

• To examine the cause of the problem

• To examine the nature of the problem

• To provide solution to a problem

o To construct or create a new procedure and new system

Motivation in Research

 What makes people to undertake research? This is a question of fundamental importance.

 The possible motives for doing research may be either one or more of the following:

1. Desire to get a research degree along with its consequential benefits;

2. Desire to face the challenge in solving the unsolved problems, i.e., concern over practical
problems initiates research;

3. Desire to get intellectual joy of doing some creative work;

4. Desire to be of service to society;

5. 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 (or at times compel) people to perform
research operations
Significance of Research

 “All progress is born of inquiry. Doubt is often better than overconfidence, for it

leads to inquiry, and inquiry leads to invention” is a famous Hudson Maxim in

context of which the significance of research can well be understood.

 Research inculcates scientific and inductive thinking and it promotes the

development of logical habits of thinking .

 The increasingly complex nature of business and government has focused

attention on the use of research in solving operational problems.

 Research, as an aid to economic policy, has gained added importance, both for

government and business.

1. Research provides the basis for nearly all government policies in our economic

system.

• For instance,

o government‟s budgets rest in part on an analysis of the needs and desires of the people
and on the availability of revenues to meet these needs. The cost of needs has to be
equated to probable revenues and this is a field where research is most needed.

o The plight of cultivators, the problems of big and small business and industry, working
conditions, trade union activities, the problems of distribution, even the size and nature of
defense services are matters requiring research.

o Another area in government, where research is necessary, is collecting information on the

economic and social structure of the nation. Such information indicates what is happening
in the economy and what changes are taking place.

 Through research we can devise alternative policies and can as well examine the
consequences of each of these alternatives.
2. Research has its special significance in solving various operational and planning problems

of business and industry.

 Operations research , market research, and motivational research are crucial and assist in

making business decisions.

o Market research- is the investigation of the structure and development of a market for the

purpose of formulating efficient policies for purchasing, production and sales.

• Market analysis has become an integral tool of business policy these days. Business

budgeting, which ultimately results in a projected profit and loss account, is based mainly

on sales estimates which in turn depends on business research. Once sales forecasting is

done, efficient production and investment programmes can be set. Research, thus, replaces

intuitive business decisions by more logical and scientific decisions.

o Operations research -refers to the application of mathematical, logical and

analytical techniques to the solution of business problems of cost minimization or

of profit maximization or what can be termed as optimization problems.

o Motivational research - it is concerned with the determination of motivations

underlying the consumer (market) behavior.

 All these are of great help to people in business and industry who are responsible

for taking business decisions.

 Given knowledge of future demand, it is generally not difficult for a firm, or for

an industry to adjust its supply schedule within the limits of its projected

capacity.
3. Research is equally important for social scientists in studying social

relationships and in seeking answers to various social problems.

 It provides the intellectual satisfaction of knowing a few things just for the

sake of knowledge and also has practical utility for the social scientist to know

for the sake of being able to do something better or in a more efficient manner.

 Research in social sciences is concerned both with knowledge for its own

sake and with knowledge for what it can contribute to practical concerns.

 On the one hand, its responsibility as a science is to develop a body of

principles that make possible the understanding and prediction of the whole

range of human interactions.

1.5. Classification and Types of Research

 Generally research can be classified on the basis of the following traits.

I. On the basis of the outcome of the research: Whether the research tries to

solve a particular problem or makes a general contribution to the knowledge.

A. Fundamental Research: is also called academic or basic or pure research. Such

research is aimed at investigating or search for new principles and laws.

o It is mainly concerned with generalization and formulation of a theory.

Examples:
o R/ship b/n crime and economic status
o Darwin Theory of Evolution
o Newton‟s Law of Motion
• Einstein Theory of Relativity
B. Applied Research: this research aimed at finding a solution for an immediate

problem facing a society, a group or industry (business organization).

 The results of such research would be used by either individuals or groups of

decision-makers or even by policy makers.

 While pure research discovers principles and laws, applied research discovers

their application in solving some social, economical or any other problems.

Example

o The improvement of safety in the working place

o The reduction of wastage in the working places is example of applied research.

Types

 Social impact Analysis: - The major purpose of social impact assessment is to estimate the likely

consequences of a planned change. Such an assessment can be used for planning and making choices

among alternative policies.

o Potential areas assessed in social impact analysis.

• Community service (School enrolment, speed of policy respond)

• Social conditions (crime rate etc.)

• Economic impact (change in income level)

• Demographic consequences (change in the mix of old and young people, population movement in or out of

the area)

• Environment impact

• Health outcomes
 Evaluation research: - is widely used type of applied research that addresses the

question, “did it work?‟

o Evaluation is a process of establishing value judgment based on evidence.

o Evaluation research measures the effectiveness of a program, policy, or way of

doing something.

• Some example of evaluation research questions is, does the new incentive scheme

improve workers job performance? Does the environmental policy improve the

environmental problem of the city?

• Applied research being impact analysis or evaluation research uses two tools

namely; need assessment and Cost Benefit Analysis.

Need assessment: A researcher collects data, to determine major needs. It is often a

preliminary step before deciding on a strategy to help people.

o A good need assessment identifies both the expressed and less valuable needs of a

target group, as well as the more serious or widespread needs.

o A researcher must trace links among related needs to identify those of highest priority.

Cost benefits analysis. This is commonly used in social impact analysis. Economists

developed cost benefit analysis, in which the researcher estimates the future costs and the

expected benefits of one or several proposed actions and gives them monetary values
II. On the basis of the purpose (The reason why a research is conducted)

A. Exploratory research (Pilot Survey)

o It is also called preliminary research. As its name implied, such research is aimed at
discovering, identifying and formulating a research problem and hypothesis.

B. Descriptive Research

o The main purpose of such research is description of the state of nature or affairs, as it
exists at present.

o The main characteristic of such research is that the researcher has no control over the
variables; he can only report what has happened or what is happening.

Examples:
• What is the absentee rate in a particular office?
• What is the qualification of different groups of employment?
• Frequency of shopping
• Preferences of people
• Ex-post facto studies also include attempts by researchers to discover causes though they
cannot control the variables.
C. Analytical research- goes beyond simple description of the state of nature.

o When a researcher encounters an issue that is already known and have a

description of it, you may begin to ask “why” things are the way they are.

o Analytical research uses facts or information already available, and analyzes

them to make a critical evaluation of the material.

o Not only describe the characteristics, but also it analyzes and explains why and
how it happened or is happening.

o The information or facts used here can be either Qualitative or Quantitative.

Examples

• How can we reduce the numbers of complaints made by customers?

• How can we expand the range of our services?

D. Predictive research

o Such research goes beyond explaining why and how things happened. It
predicts (forecast) the possible (probability of happening similar situation in
other places.

o It tries to explain about the probability of happening similar thing in the

future.

o Examples

o How would an increase in interest rate affect our profit margin?

o What type of packaging will improve the sales of our products?

D. Simulation research

o Such research uses models to represent the real world. Simulation is

common in physical science, economics and mathematics.
III. On the basis of the process of research
 On the basis of data used in the research process research can be
A. Qualitative research:
o Such research is applicable for phenomenon that cannot be expressed in terms of quantity.
Things related to quality and kind. Research designed to find out how people feel or what they
think about a particular subject or institution is an example of such research.
B. Quantitative research
o Qualitative research is on the other hand is concerned with qualitative phenomenon. It is based
on the measurement of quantity or amount. It is applicable for phenomenon that can be
expressed in term of quantity.
IV. On the basis of the environment in which the research is carried out research can be
A. Field research
o It is a research carried out in the field. Such research is common in social science, agricultural
science, history and archeology.
B. Laboratory research
o It is a research carried out in the laboratory. These are commonly experimental research.
V. Theoretical and Empirical research

 This classification is similar to the fundamental vs. applied research.

A. Theoretical- Conceptual research is related to some abstract or theory, it is conducted by

philosophers to develop new ideas or reinterpret the existing ones.

o Theoretical studies‟ deal only with this level. For example, studies in mathematics and pure

(theoretical) economics primarily relate to specific problems without seeking empirical

evidence.

B. Empirical research

o Empirical research relies on experience or observation alone, without due regard to system or

theory.

o It is data base research or also called experimental research, coming up with conclusions,

which are capable of being verified by observations or experiments.

Vi. Time dimension in Research

 In terms of time dimension, quantitative research may be divided in two

groups.

A. Cross Sectional research (single time): Takes a snap shot approach to

social world. It is the simplest and less costly research approach. Limitation: It

cannot capture social process or change.

B. Longitudinal research(multiple time): Examines feature of people or

other unites more than one time. It is usually more complex and costly than

cross-sectional but it is more powerful especially with respect to social

changes.
1.6. Stages in research Process

 Research processes consist of a series of actions or steps, which are necessary to

successfully carry out research activities.

i. Identification and Formulating the research problem

ii. Extensive literature Review

iii. Developing working hypothesis

iv. Preparing the research design

v. Collecting data

vi. Analysis of the data

vii. Interpretation and reporting the result

 RESEARCH PROCESS

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
1.7. Characteristics of good research

 Purpose clearly defined.

 Research process detailed.

 Research design thoroughly planned.

 High ethical standards applied.

 Limitations frankly revealed.

 Adequate analysis for decision maker‟s needs.

 Findings presented clearly.

 Conclusions justified.

 Researcher‟s experience reflected.

 In other words, we can state the qualities of a good research as under:

1. Good research is systematic: It means that research is structured with specified

steps to be taken in a specified sequence in accordance with the well defined set of

rules.

2. Good research is logical: This implies that research is guided by the rules of

logical reasoning and the logical process of induction and deduction are of great

value in carrying out research.

o Induction is the process of reasoning from a part to the whole whereas

o deduction is the process of reasoning from some premise to a conclusion which follows

from that very premise. In fact, logical reasoning makes research more meaningful in

the context of decision making.

3. Good research is empirical: It implies that research is related basically to

one or more aspects of a real situation and deals with concrete data that

provides a basis for external validity to research results.

4. Good research is replicable: This characteristic allows research results to be

verified by replicating the study and thereby building a sound basis for

decisions.
1.8. Problems encountered by researchers.

 Problems encountered especially in developing countries like Ethiopia are

i. Insufficient interaction between Academics and Practitioners

 Weak interactions between universities and research institution and business

establishments, government and industries. There is a need for developing

some mechanisms of a university—industry interaction programme so that

academics can get ideas from practitioners on what needs to be researched

and practitioners can apply the research done by the academics.

ii. Lack of training on the part of researchers- lack of a scientific training in the

methodology of research is a great impediment for researchers in our country. Most of

the work, which goes in the name of research is not methodologically sound. As result,

the research results, quite often, do not reflect the reality. Thus, a systematic study of

research methodology is an urgent necessity. Before undertaking research projects,

researchers should be well equipped with all the methodological aspects.

iii. Lack of confidence on the part of business units to give information

 Most of the business units in our country do not have the confidence . Most business

firms fear that information provided to researchers may be used against them, thus,

they are often reluctant in supplying the needed information to researchers.

 Thus, there is the need for generating the confidence that the information/data

obtained from a business unit will not be misused.

iv. Redundant Research studies
 Overlapping one another are undertaken quite often for want of adequate
information. This results in duplication and fritters away resources. This
problem

o Can be solved by proper compilation and revision, at regular intervals, of a list

of subjects/ research problems in various disciplines which are of immediate
concern to the industries.

v. Research resource.

• Secretary-Many researchers in our country also face the difficulty of adequate

and timely secretarial assistance. This causes unnecessary delays in the
completion of research studies.
• Data- There is also the difficulty of timely availability of published data from
various government and other agencies.
• Funds- Lack of adequate funds and bureaucracies.