1|BUSINESS RESEARCH METHODS NOTES BY ASAD ALI JUNEJO

Chapter 1:

Business Research: Business research is 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.
Managerial Value of Business Research:
Product Oriented: Describes a firm that priorities decision making in a way that
emphasizes technical superiority in the product.
Production Oriented: Describes a firm that priorities efficiency and effectiveness of
all production processes in making decision.
Marketing Oriented: Describes a firm in which all decisions are made with a
conscious awareness of their effect on the consumer.
Four Stages:
 Identifying problems or opportunities
 Diagnosing and assessing problems or opportunities
 Selecting and implementing a course of action
 Evaluating the course of action
(MANAGERIAL VALUE ENDS HERE)

When is Business Research Needed?

Time Constraints: Systematic research takes time, in many instances management
believes that a decision must be made immediately, allowing no time for research.
Although, making decisions without researching a situation is not ideal.
Availability of Data: When the manager lack adequate information then Research is
considered.
Nature of the Decision: The value of business research will depend on the nature of
the managerial decision to be made. A routine tactical decision that does not require a
substantial investment may not seem to warrant a substantial expenditure for research.
Benefits Versus Costs: Conducting research to obtain these benefits requires an
expenditure of money. In any decision – making situation, managers must identify
alternative courses of action and then weigh the value of alternative against its cost.

Applied research: It is solutions designed from basic research information, aimed at

the solution of business problems within the company. The goal of applied research is
change for the better, improvements in business management and practice aimed at
improving the human condition.
Basic research: It is another type of research, and it is driven purely by curiosity and
a desire to expand our knowledge. This type of research tends not to be directly
applicable to the real world in a direct way, but enhances our understanding of the
world around us. Basic research whether in business or any other field has as its basic
goal, to expand one's knowledge?
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Scientific Method: It is
the way researchers go
about using knowledge and
evidence to reach objective
conclusions about the real
world. It’s set of prescribed
procedures for establishing
and connecting theoretical
statements about events,
for analyzing empirical
events, and for predicting
events yet unknown.
(Scientific Method Steps)
 Assessment of relevant existing knowledge
 Formulation of concept and preposition
 Statement of hypothesis
 Design of research to test hypothesis
 Acquisition of meaningful empirical data
 Analysis and evaluation of data
 Proposal of an explanation of the phenomenon
and statement of new problems raised
by the research.
Scientific Method Graph:

Chapter 2:

Theory: A formal, logical explanation of some events that

includes predictions how things relate to one another.
Theories are net cast to catch what we call “the world”
to rationalize, to explain and to master it.
Goals of Theory:
• To understand
• To predict
• To influence
• To control
Accomplishing the first goal allows the theorist to gain an understanding of the
relationship among various phenomena.
Research Concepts & Constructs:
Concept: A concept is an abstraction reality that is the basic unit of theory
development. Concepts are mental representations and are typically based on
experience.
Ladder of Abstraction: organization of concepts in sequence from the most concrete
and individual to the most general.
Abstract Level: The level of knowledge expressing a concept.
Empirical Level: level of knowledge that is verified by experience or observation.

Prepositions and Hypothesis:

Prepositions: Statements explaining the logical linkage among certain concepts.
Hypothesis: a supposition or proposed explanation made on the basis of limited
evidence as a starting point for further investigation.
Empirical Testing: Examining a research hypothesis against reality using data.
Variables: The Empirical assessment of a concept.
Operationalizing: The process of identifying the actual measurement scales to assess
the variable of interest.
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Theory Building:
A theory may be developed with either deductive reasoning at abstract or conceptual
level or by inductive reasoning at empirical level.
Deductive Reasoning: The logical process of deriving a conclusion about a specific
instance based on a known general premise or something known to be true.
Inductive Reasoning: The logical process of establishing a general proposition on the
basis of observation of particular fact.
Ballistic Theory: it is a theory that deals with measurable factors and its state
relationship in detail.

Chapter 3:

Decision Making: The definition of decision making is the thought process of selecting
a logical choice from among the available options. A decision involves a choice that will
produce the best possible outcome against the goal or objectives being sought by the
organization or individual.

Types of Business Research:

Exploratory Research: Conducted to clarify ambiguous situations or it is a research
conducted for a problem that has not been clearly defined.

Descriptive Research: Descriptive research is conclusive in nature, as opposed to

exploratory. This means that descriptive research gathers quantifiable information that
can be used for statistical inference on your target audience through data analysis.
Descriptive research is used to describe characteristics of a population or phenomenon
being studied. It does not answer questions about how/when/why the characteristics
occurred. Rather it addresses the "what" question (What are the characteristics of the
population or situation being studied?

Causal Research: Research that involves finding the effect of one thing on another or
the effect of one variable on another, is called Causal Research. It allow casual
inferences to be made, seeks to identify cause and effect relationship.
Causal Inference: A conclusion when one thing happens, another specific thing will
follow.
Three Critical Pieces of Causal Evidence:
Temporal Sequence: It deals with the time order of events – the cause must occur
before the effect.
Concomitant Variation: It occurs when two events correlate, meaning they vary
systematically.
Nonspurious Association: It means any co variation between a cause and an effect
is true and not simply due to some other variable.
Causal Research should do all of the following:
 Establish the appropriate causal order or sequence of events.
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 Measure the concomitant variation between the presumed cause and presumed
effect.
 Examine the possibility of spuriousness by considering the presence of
alternative plausible causal factors.
Degree of Causality:
Absolute Causality: It means the cause is necessary and sufficient to bring about the
effect.
Conditional Causality: It means that a cause is necessary but not sufficient to bring
about an effect.
Contributory Causality: It means that a cause need be neither necessary nor
sufficient to bring about an effect.

Experiment: A carefully controlled study in which the researcher manipulates a

proposed cause and observes any corresponding change in the proposed effect.

Stages In The Research Process:

Alternatives In The Research Process: The researcher must choose among a
number of alternatives during each stage of process.
Stage 1. Defining the Research Objectives:
Research objectives rare the goals to be achieved by conducting research, the
objectives cannot really be determined until there is a clear understanding of the
managerial decision to be made on problem statement. The word problem suggest that
something went wrong.
Defining the Managerial Situation: In business research, “a problem well defined is
a problem half solved”. Careful attention to problem of the definition allows the
researcher to set the proper research objectives.
Points in Step 1.
 Exploratory research can be used to help identify and clarify the decisions
that need to be made.
 As the general rule, researcher should first investigate previous research to see
whether or not others may have already addressed similar research problems by
going through literature review.
 Almost all consumers take a test drive before buying the car, a pilot study
serves a similar purpose for the researcher. Pilot study is a small scale research
project that collects data from respondents similar to those to be used in full
study.
 After identifying and clarifying the problem, with or without exploratory research,
the research must formally state the research objectives.
Stage 2: Planning the Research Design:
Research design is a master plan that specifies the methods and procedures for
collecting and analyzing the needed information. After the researcher has formulated
the research problem, he or she must develop the research design as a part of research
process.
Stage 3: Planning the Sample:
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The sampling stage is a distinct phase of the research process. Sampling involves any
procedures that draws conclusions based on measurement of a portion of the
population. After the research design, the researcher must plan the sample design of
research process.
Stage 4: Collecting the Data:
The data gathering stage begins once the sampling plan has been formalized. Data
gathering is the process of collecting or gathering of information. Data may be gathered
by human observers, interviewers, etc.
Stage 5: Analyzing the Data:
After the field work has been completed, the data must be converted into a format that
will answer the manager’s questions. Data analysis is the application of reasoning to
understand the data that have been gathered, in its simplest form.
Stage 6: Formulating the Conclusion and Preparing the report:
One of the most jobs that a researcher performs is communicating the research results.
This is the final stage of the research project. The conclusions and report preparation
stage consists of interpreting the research results, describing the implications, and
drawing the appropriate conclusions for managerial decisions.

Chapter 5:

Problem Definition: The process of defining and developing a decision statement and
the steps in translating it into more precise research terminology, including a set of
research objectives.
Situation Frequency: Cyclical business situation lead to recurring business problems.
These problems can even become routine. In these cases, it is easy to define problems
and identify the types of research that are needed.
Dramatic Changes: when a sudden change in the business situation takes place, it
can be easier to define the problem.
Wide Spreading of Problem Symptoms:
The more scattered any symptoms are the more difficult it is to put them together into
some coherent problem statement.
Certainty: Awareness of the exact nature of problem, complete certainty means that
the decision maker has all information needed to make optimal decision.
Uncertainty: it means that the manager grasps the general nature of desired objective
but the information about alternatives is incomplete.
Ambiguity: it means that the nature of problem itself is unclear.

Problem definition Process:

Problem: It means gaps, a problem occurs then there is difference between the current
conditions and a more preferable set of conditions.
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Steps of Problem Definition process:

Understand the Business Decisions – Identify key symptoms: The situation
analysis is a good way of documenting the problem definition process, gaining an
awareness of marketplace conditions. A situation Analysis is the gathering of
background information to familiarize researchers and managers with the decision
making environment. Interviews with the key decisions makers also can be one of the
best ways to identify key problem symptoms. One of the most important questions the
researcher can ask during these interviews is, “what has changed?”.
Identify key problems from Symptoms:
Anticipating the many influences and dimensions of a problem is impossible for any
researcher or executive. The preceding interview is extremely useful in translating the
decision situation into a working problem definition by focusing on symptoms.
Write Managerial Decision Statement And Corresponding Research
Objectives:
It is a decision statement that says in what “ways” a problem can be solved is better
than one says in what “way”, a problem can be solved. Decision statements capture
these objectives in a way that invites multiple solutions.
Determine the unit of analysis:
A study indicates what or who should provide the data and at what level of
aggregation.
Determine the relevant variables:
Variable is anything that varies or changes from one instance to another can exhibit
differences in value, usually in magnitude in strength or in direction. What things should
be studied to address a decision statement? Researcher answer this question by
identifying key variables.
Types of variables:
Continuous Variables: It is one that can take on a range of values that correspond to
some quantitative amount.
Categorical Variable: A variable that indicates membership in some group.
Classificatory variable: another term for a categorical variable because it classifies
unites into categories.
Write research questions and or research hypothesis:
At the end of problem definition stage, the researcher should prepare a written
statement that clarifies any ambiguity about what the research hopes to accomplish,
this complete the translation process.

The Research Proposal: A research proposal is a document written by a researcher

that provides a detailed description of the proposed program. It is like an outline of the
entire research process that gives a reader a summary of the information discussed in a
project.
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Chapter 6:

Levels of Scale Measurement:

it relates to the types of statistics you can use to analyse your data.
Nominal Scale: This, the crudest of measurement scales, classifies individuals, companies,
products, brands or other entities into categories where no order is implied.
Ordinal Scales: ordinal scales involve the ranking of individuals, attitudes or items along the
continuum of the characteristic being scaled. Ranking scales allowing things to be arranged
based on how much of some concept they possess.
Interval Scale: Scales that have both nominal and ordinal properties, but that also capture
information about differences in quantities of a concept from one observation to the next.
Ratio Scale: The highest level of measurement is a ratio scale. This has the properties of an
interval scale together with a fixed origin or zero point. Examples of variables which are ratio
scaled include weights, lengths and times.

Index Measures: An index measures assigns a value based on how much of he concept being
measured is associated with an observation. Indexes ofter are formed by putting several
variables together.

Three Criteria of Good Measurement:

Reliability: The reliability of a measure indicates the extent to which it
Is without bias (error free) and hence ensures consistent measurement across time and
across the various items in the instrument. In other words, the reliability of
a measure is an indication of the stability and consistency with which the instrument
measures the concept and helps to assess the `goodness" of measure.
Test-retest Reliability: Test – retest method of determining reliability involves
administering the same scale to the same respondents at two separate times to test for
stability. If the measure is stable over time, the test, administered under the same
conditions each time, should obtain similar results.
Internal Consistency of Measures: Internal consistency of measures is indicative of
the homogeneity of the items in the measure that tap the construct.
Valitidy: The accuracy of a measure or the extent to which a score truthfully represent
a concept. Validity is the ability of an instrument (for example measuring
an attitude) to measure what it is supposed to measure. That is, when we ask a set of
questions (i.e. develop a measuring instrument) with the hope that we are tapping the
concept, how can we be reasonably certain that we are indeed measuring
the concept we set out to do and not something else?
Content Validity: The content validity of a measuring instrument (the composite
of measurement scales) is the extent to which it provides adequate coverage of
the investigative questions guiding the study.
Criterion-Related Validity: It uses some standard or criterion to indicate a
construct accurately.
Construct Validity:
Construct validity is for measures with multiple indicators. It addresses the question: If
the measure is valid, do the various indicators operate in consistent manner?
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Convergent Validity: This kind of validity applies when multiple indicators converge
or are associatedwith one another. Convergent validity means that multiple measures of
the same construct hang together or operate in similar ways.
Discriminant validity: represent how unique or distinct is a measure.

Chapter 8:

Frequency Distribution: a frequency distribution is a table that displays

the frequency of various outcomes in a sample.
Probability: it is the long – run relative frequency with which an event will occur.
Proportions: A proportion refers to the fraction of the total that possesses a certain
attribute.
Measures of Central Tendency:
Mean: Average. The sum of a set of data divided by the number of data.
(Do not round your answer unless directed to do so.)
Median: The middle value, or the mean of the middle two values, when the data is
arranged in numerical order. Think of a "median" being in the middle of a highway.
Mode: The value ( number) that appears the most. It is possible to have more than
one mode, and it is possible to have no mode. If there is no mode-write "no mode", do
not write zero (0) .

Measures of Dispersions:
Range: The simplest of our methods for measuring dispersion is range. Range is the
difference between the largest value and the smallest value in the data set.
Standard Deviation: Standard deviation (SD) is the most commonly used measure of
dispersion. It is a measure of spread of data about the mean. SD is the square root of
sum of squared deviation from the mean divided by the number of observations.