Research Methods for Business A Skill-Building Approach, 6th Edition Solution Manual

Research Methods for Business A Skill-Building Approach, 6th Edition By Uma Sekaran and Roger Bougie

Research Methods for Business

CHAPTER 1 INTRODUCTION TO RESEARCH Instructional Goals 1. To generate interest in research for the students by driving home the point that successful managerial problem solving is nothing other than understanding and analyzing the situation at hand, which is what research is all about.

2. To help students differentiate between research-based problem solving and “going by gut-feeling”, the latter of which might sometimes help to solve problems in the short run, but might lead to systemic long-term adverse consequences.

3. To create an appreciation in students that research is useful for solving problems in ALL areas of business.

4. To help students develop an appreciation of the role of the manager in facilitating the researcher or the consultant’s work.

5. To stress the importance of skill development in research, as opposed to mere gathering of knowledge about research.

6. To emphasize that research and knowledge about research enhance managerial effectiveness.

7. To sensitize students to ethical conduct in business research.

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Research Methods for Business

Discussion Questions 1. Why should a manager know about research when the job entails managing people, products, events, environments and the like?

The manager, while managing people, products, events, and environments will invariably face problems, big and small, and will have to seek ways to find long lasting effective solutions. This can be achieved only through knowledge of research even if consultants are engaged to solve problems.

2. For what specific purpose is Basic Research important?

Basic research is important for generating and building upon the existing knowledge in the areas of interest. It offers the foundation for applied research by which one can circumvent reinventing the wheel.

3. When is applied research, as distinct from basic research, useful?

Applied research is useful in solving specific problems in particular situations where early action might be needed to solve problems in organizations.

4. Why is it important to be adept in handling the manager-researcher relationship?

The manager who knows how to relate to researchers facilitates the problem solving process and benefits the research team as well as the organization. The one who is not adept at this will frustrate and be frustrated during the research process and thereafter.

Being capable of handling the manager-researcher relationship is thus a big advantage and some of the nuances of handling research teams are: (i) knowing how much and what information to give to the team; (ii) meaningful and purposeful interactions with the team members; (iii)stating up front what records of the company will and will not be accessible to the team members and expressing the core values of the system.

5. Explain giving reasons which is more important – applied or basic research.

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Research Methods for Business Both are equally important. Without basic research, applied research cannot work as well, and if the results of basic research are not applied, such research would be futile. Whereas basic research is the foundation of knowledge, applied research is its practical application and helps to provide the additional information base for theory building and further generation of knowledge.

6. Give two specific instances where an external research team would be useful and two other scenarios where an internal research team will be deployed, with adequate explanations as to why each scenario is justified for an external or internal team.

The answers will vary.

For the external team, the suggestions could be: a. to help non-tech companies to build up sophisticated technology in their environment; (only those with specialized knowledge of technology can help non-tech companies) b. to evaluate the successful and deficient operations of the company (to avoid bias of internal team members).

For the internal team, it could be: a. to figure out how the companies affected by the September 11th disaster can rebuild themselves; (internal team would be more knowledgeable about the company and could rebuild faster); b. to solve the problem of consistent losses of a small division of a large company (only a small pocket of a large company is involved and the situation can be rectified by the internal team).

7. Describe a situation where research will help you as a manager to make a good decision.

Again, the answers will vary. One scenario is that a work team fails to deliver results time and again.

8. Given the situations below, (a) discuss with reasons, whether they will fall into the category of Applied or Basic research, and (b) for scenario 1 explain with reasons, who will conduct the research.

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Research Methods for Business

Scenario 1 Companies are very interested in acquiring other firms even when the latter operate in totally unrelated realms of business. For example, Coca-Cola has announced that it wants to buy China Huiyuan Juice Group in an effort to expand its activities in one of the world’s fastest-growing beverage markets. Such acquisitions are claimed to “work miracles.” However, given the volatility of the stock market and the slowing down of business, many companies are not sure whether such acquisitions involve too much risk. At the same time, they also wonder if they are missing out on a great business opportunity if they fail to take such risk.

Some research is needed here!

This is a general issue that relates to all or most companies contemplating acquisitions. Of course, the results of the study are likely to be useful to, and applied by all the concerned companies. This could fall into the realm of basic or applied research, depending on who sponsors the study. If one company or a consortium of companies investigates the issue to find an answer for immediate application, then it will be applied research On the other hand, if a Finance professor in a university undertakes the study as a matter of academic interest, it will be basic research. Either an individual such as a professor or a finance expert can do this basic research, or a company or consortium of companies can undertake the applied research.

Scenario 2

Reasons for Absenteeism A university professor wanted to analyze in depth the reasons for absenteeism of employees in organizations.

Fortunately, a company within 20 miles of the campus employed her as a consultant to study that very issue.

The basic research aspiration of the professor has taken the form of applied research in this particular system, where they would apply the findings of her research to solve the problem. No doubt, the professor would continue her research in a variety of organizations to add to the existing base of knowledge on absenteeism and continue the topic as a basic research project.

Scenario 3

Effects of Service Recovery on Customer Satisfaction

A research scientist wants to investigate the question: What is the most effective way for an organization to recover from

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Research Methods for Business a service failure? Her objective is to provide guidelines for establishing the proper "fit" between service failure and service recovery that will generalize across a variety of service industries.

This will be a case of basic research, the purpose of which was to study the efficacy of different service recovery strategies and add to the body of existing marketing knowledge.

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CHAPTER 2 THE SCIENTIFIC APPROACH AND ALTERNATIVE APPROACHES TO INVESTIGATION

Instructional Goals 1 To help participants comprehend that scientific research offers assurance to the manager that the results of a study can be relied upon and further action can be taken at low risk.

2. To impress on the students that business research, however rigorously conducted, cannot produce 100 percent scientific results in terms of precise solutions.

3. To sensitize participants to being watchful about observing the different cues in the environment which offer some idea of a gap in the desired and actual state of affairs.

4. To help students understand that applied research, though limited in generalizability, still has to be “scientific”.

Discussion Questions The first two questions are straightforward and the answers may be extracted from the text.

3. One hears the word research being mentioned by several groups such as research organizations, college and university professors,

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Research Methods for Business doctoral students, graduate assistants working for faculty, graduate and undergraduate students doing their term papers, research departments in industries, newspaper reporters, journalists, lawyers, doctors, and several other professionals and nonprofessionals. In the light of what you have learned in this unit, how would you rank the aforementioned groups of people in terms of the extent to which they might be doing “scientific” investigations. Why? To the extent that any of the above groups conforms to the hallmarks of science, they would be doing scientific investigation. It is quite possible that poor research is done by research agencies, and excellent research is conducted by a graduate assistant. The ultimate test is the rigor of the research which would lend itself to testability, replicability, accuracy and precision, generalizability, objectivity, and parsimony.

Research organizations and research departments in industries engage themselves in both basic and applied research and usually have the resources required to conduct scientific investigations using rigorous data collection methods, sampling designs, and data analysis. Most professors in colleges and universities are well trained to conduct scientific investigations, though their resources may not, in most cases, be as plentiful as that made available in research organizations and research departments. Because of restricted resources, professors may have to compromise somewhat on methodological rigor (e.g. use a small sample) which might restrict the generalizability of their findings.

However, their research might otherwise be scientific. Applied researchers doing action-oriented research, are somewhat restricted in even disseminating information about their findings due to the localized nature of their inquiry which may not pass many of the criteria of the hallmarks of science. Doctoral dissertations conducted under able guidance and supervision quite frequently make valuable contributions to the body of existing knowledge. Much of this research is later published as journal articles, and some get published as books because of their contributions to knowledge.

Students’ term papers are meant to be exercises in skill development for integrating materials and communicating ideas in written form.

Exceptional research papers, when refined and published, could qualify for being termed as scientific investigations. Newspaper reporters and journalists may obtain extensive primary and secondary data but their .

Research Methods for Business investigations are confined to a narrow range of current incidents, events, or individuals, which are of passing interest with little generalizability to other times, events or individuals. Hence, they cannot ordinarily be termed scientific investigations. Some newspaper articles, however – as for instance, economic and environmental investigations – provide data, analysis of these data, and valid conclusions drawn therefrom, which might later be used as secondary data by other researchers. These would be categorized as more scientific in contrast to articles or editorials in the paper.

Academic journals usually publish articles that are scientific and some of the practitioner-oriented articles are probably somewhat less scientific than the academic articles in terms of rigor and generalizability. To the extent that lawyers, doctors, professionals and nonprofessionals present their findings that have wide testability, replicability, generalizability, accuracy and precision, objectivity, and parsimony, they will be scientific. However, if these investigations are confined to single cases, incidents, or individuals, they cannot be called scientific investigations despite the fact that they may be found useful.

4. Explain the processes of deduction and induction, giving an example of each.

The hypothetico-deductive method of research helps the researcher to deduce or infer from the results of data analysis and hence is the deductive process. For example, if as a result of analysis of data collected, one infers that the problem of turnover can be minimized by three important factors: (i) flexible work hours; (ii) recognition of superior performance of workers through suitable merit pay raises; and (iii) enriching certain types of jobs, this is the deductive approach.

Induction is a process of drawing inferences from observed phenomena which may subsequently be put to the test through hypothetico-deductive method of research. For instance, if a manager observes that people residing at distances beyond 50 miles from the workplace remain absent more frequently than those he knows to reside close by, and infers thereby that distance is a factor in absenteeism, this is an inductive process.

5. If research in the management area cannot be 100 percent scientific, why bother to do it at all? Comment on this question.

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Research Methods for Business Research in the management area dealing with human behavior cannot be 100 percent scientific. However, such research is necessary and useful for detecting problems and coming up with solutions as also to ensure that problems do not get out of control. Management research makes a valuable contribution inasmuch as it can help organizations function smoothly and effectively and help managers and individuals at all levels in organizations experience and enjoy a better quality of life.

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What is epistemology and why is it important to know about different perspectives on research and how it should be done?

Epistemology questions the nature of knowledge or how we come to know. Knowledge of epistemology may help students to relate to and understand the research of others and the choices that were made in this research. Different researchers have different ideas about the nature of knowledge or on how we come to know. These different ideas translate into different approaches that are taken to research, into different research designs, and into different choices regarding the research methods used. Another answer to the question “Why do I need to know this?” is that students will probably have noticed that they prefer one research perspective over the other perspectives. Understanding your personal ideas on research and how it should be done allows you to determine which kinds of research questions are important to them and what methods for collecting and analyzing data will give you the best answer to these questions. It will also help students to make informed decisions during the research process, to have a clear understanding about what the findings of their study (do and do not) mean, and to understand the type of conclusions that a particular research approach allows one to draw. Like this, it helps to put research and research findings in perspective.

7. Discuss the most important differences between positivism and constructionism.

Constructionism criticizes the positivist belief that there is an objective truth.

Constructionists hold the opposite view, namely that the world (as we know it!) is fundamentally mental or mentally constructed. For this reason, constructionists do not search for the objective truth. Instead, they aim to understand the rules people use to make sense of the world by investigating what happens in people’s minds.

The research methods of constructionist researchers are often qualitative whereas research methods of the positivist are often quantitative in nature. Constructionists are often more concerned with understanding a specific case than with the generalization of their findings which is important for the positivist.

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Research Methods for Business 8. Is there a specific perspective on research that appeals to you? Why? Answers will vary.

9. Critique the following research done in a service industry as to the extent to which it meets the hallmarks of scientific investigation discussed in this chapter.

The Friendly Telephone Company Customer complaints were mounting, and letters of complaint regarding the problems they experienced with the residential telephones lines were constantly pouring in at the Friendly Telephone Company. The company wanted to pinpoint the specific problems and take corrective action.

Researchers were called in, and they spoke to a number of customers, noting down the nature of the specific problems they faced. Since the problem had to be attended to very quickly, they developed a theoretical base, collected relevant detailed information from a sample of 100 customers, and analyzed the data. The results are expected to be fairly accurate with at least an 85% chance of success in problem solving. The researchers will make recommendations to the company based on the results of data analysis.

The hallmarks of science are purposiveness, rigor, testability, replicability, precision and confidence, objectivity, generalizability, and parsimony. This study meets the basic criterion of purposiveness. It cannot be called a rigorous study inasmuch as a theoretical framework seems to have been formulated merely on the basis of conversation with a number of customers and no scientific data seem to have been collected thereafter. For this reason, the replicability and generalizability criteria also suffer. With customer complaints mounting, an 85% confidence level may not suffice. Unless we know the theoretical base, we cannot be sure that the criterion of parsimony is met. All in all, this is a good example of a non-scientific investigation.

10. Some people think that you should choose a particular research perspective based on the research questions of your study. Others feel that a particular research perspective “chooses” you. That is, they believe that you will have a rather strong preference for one particular research perspective; in turn, this will have an influence on the type of questions you ask. How do you feel about this matter? .

Research Methods for Business Answers will vary.

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The Dilemmas of Dorothy Dunning Dorothy Dunning, Chief Production Manager, was on top of the world just two years ago. In her nontraditional job, she was cited to be the real backbone of the company, and her performance was in no small measure responsible for the mergers the institution was contemplating with other well-known global corporations.

Of late though, the products of the company had to be recalled several times owing to safety concerns. Quality glitches and production delays also plagued the company.

To project a good image to consumers, Dunning developed a very reassuring web site and made sweeping changes in the manufacturing processes to enhance the quality of the product, minimize defects, and enhance the efficiency of the workers.

A year after all these changes, the company continues to recall defective products!

Creating a web site and making sweeping changes has not produced the desired results. The real problem is undetected and can be only identified through research. Maybe, the problem is not in the manufacturing processes, but the low motivation of employees! A scientific research of the problem situation will help to pinpoint the problem and solve it.

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Research Methods for Business

CHAPTER 3 THE BROAD PROBLEM AREA AND DEFINING THE PROBLEM STATEMENT Instructional Goals 1 To clarify to the students that though the Research Process has distinct phases, some of the steps follow an iterative, rather than a linear process. For example, the problem statement could be redefined after the theoretical framework is conceptualized, after data analysis, and in fact, at any of the stages in the process.

2. To illustrate that identifying the Broad Problem Area sets the stage for focusing on literature search and subsequently clearly defining the problem.

3. To emphasize that preliminary data collection through interviews offers a great opportunity to narrow down the problem and identify the prospective variables influencing it.

4. To develop interviewing and problem identification skills in students.

5. To create a mindset in students of viewing a problem as a gap between desired and actual state of things in a system, and a solution as narrowing this gap.

6. To encourage students to develop bibliographies by accessing available on-line data bases.

Discussion Questions 1. Explain the preliminary data collection methods.

Preliminary data can be obtaining through interviews and/or through .

Research Methods for Business literature search. These processes help to define the problem statement precisely and formulate the theoretical framework. Interviews conducted at various levels are aimed at obtaining background information on the system that is investigated, the structure and processes that operate in the system, the perceptions, attitudes, and behaviors of the people in the institution, and other related matters. The literature search will be based on the factors that seem pertinent to the problem that is investigated. After locating all the references in the area, the work relevant to the problem at hand will be studied and a literature review written up.

2. Why is it important to gather information on the background of the organization?

The background information of the company is likely to offer the researcher several clues on when the problems that are currently experienced by the company could have started and how they could have originated. One can also assess how the other companies operating in similar types of environment in the industry might be different and in what way. Since multiple factors can influence the problem, the possibility that some of the background features of the company are influencing the situational problem cannot be ruled out. Additionally, the background factors offer the researcher a good idea of how the philosophy and culture of the company are shaped, and to what extent they can be changed, if necessary.

Collecting background information also helps to focus on critical issues and raise appropriate questions during the interview process. Examples of this are provided in the book.

3. Should a researcher always find information on structural and job characteristics from those interviewed? Give reasons for your answer with examples.

It is almost always advisable for the researcher to gather some information on the structure and job characteristics even though it may appear that the problem may not be related to either of these factors. For example, the problem of not meeting the production deadlines may be directly related to the delayed deliveries of the raw materials by the suppliers. In such a case, the tendency might be to focus the data collection mainly as they relate to suppliers. However, interviewing the employees and ascertaining their reactions to their job, work-flow

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Research Methods for Business interdependencies, structure, and the like, might offer the solution that deadlines can be met even with delayed raw material supplies by changing the workflow patterns, or other structural aspects. It is for such reasons that some time should be spent on finding the job and structurerelated information.

There is also another way of looking at this. Human beings operating in organizations face a multitude of factors surrounding them, many of which, directly or indirectly influence their operating effectiveness. The structural factors such as policies and procedures and reward systems and job factors do play a critical part in how outcomes for the organization are achieved. Because of this, it certainly helps to get a feel for these factors. Of course, there is no need to spend a great deal of time on these unless there is some indication that there could be problems in these areas.

As an example, it is possible that the age of the machinery could be blamed for low production, and sophisticated machinery might be installed without any appreciable difference in the results. Further investigation might throw light on the fact that the current incentive system does not encourage high levels of production, and this fact, rather than the type of machinery used, is the problem. Not finding this before investing heavily on new equipment would be a costly mistake!

4. “The problem definition stage is perhaps more critical in the research process than the problem solution stage”. Discuss this statement.

Finding the right solution to an incorrectly identified problem helps no one because the original concerns will still continue to exist. Hence, pinpointing where exactly the gap lies, for which a solution is needed, is critical.

5. Why should one get hung up on problem definition if one already knows the broad problem area to be studied?

Since a problem statement is a clear, precise, and concise statement of the issue to be researched, it offers a focus and direction to the research. In other words, it sets out the exact purpose of the research and clearly states the question to which we are trying to find an answer. The broad problem area, however, due to its vagueness and wide scope of the issues that could be involved, leaves the focus of the research undetermined, and hence offers no sense of purpose or direction to the research. .

Research Methods for Business To put it differently, a broad problem area does not highlight the specific problem that exists. Unless the precise problem is identified, a solution to it cannot be found. This is akin to an individual going to a doctor saying he is losing weight (broad problem). Unless the physician can locate the reason for this weight loss (define the problem), the situation cannot be rectified.

6. Offer a clearly focused problem statement in the broad area of corporate culture.

Two examples of research questions are: What constitutes corporate culture? Or, How does corporate culture influence employee performance?

7. Below is the gist of an article from Business Week. After reading it, (a) identify the broad problem area, (b) define the problem, and (c) explain how you would proceed further.

While Chrysler’s minivans, pickups, and sports utilities take a big share of the truck market, its cars trail behind those of GM, Ford, Honda, and Toyota. Quality problems include, among other things, water leaks and defective parts. a. The broad problem is that the Chrysler cars are lagging behind in market share. b. Problem statement: Research objective: To improve the market share of Chrysler cars.

Research question: How can the market share of Chrysler cars be improved? b. It is best to interview the users of GM, Ford, Honda, and Toyota car users and obtain from them their reactions – both positive and negative to the cars they use and why they prefer them. Similar reactions from the users of Chrysler cars should also be gathered. One should proceed further based on the analysis of these responses.

8. What is the problem statement in the following situation?

Employee Loyalty Companies benefit through employee loyalty. Crude downsizing in organizations during the recession crushed the loyalty of millions. The economic

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Research Methods for Business benefits of loyalty embrace lower recruitment and training costs, higher productivity of workers, customer satisfaction, and boost the morale of fresh recruits. In order that these benefits may not be lost, some companies, while downsizing, try various gimmicks. Flex leave, for instance, is one. This helps employees receive 20% of their salary, plus employer-provided benefits while they take a 6-12 month sabbatical, with a call option on their services. Others try alternatives like more communication, hand holding, and the like.

Problem Statement.

Research Objective: To identify the factor that influence employee loyalty.

Research question: How can employee loyalty be maintained during periods of downsizing?

9. How would you define the problem in the following case?

Accounting Gets Radical The GAAP (Generally Accepted Accounting Principles) do an unacceptable job of accounting for the principal activities of the Information Age companies.

Today, investors are in the dark because the accounting is irrelevant. The basic purpose of accounting is to provide useful information to help investors make rational investment, credit, and similar decisions, but today’s most important assets and activities – intellectual capital and knowledge work – are totally ignored. Professor Robert A. Howell wants to reform the accounting system with the goal of making clear the measurement of how companies produce cash and create value.

Problem Definition: Research Objective: To reform the current accounting system.

Research question: What is the best way to improve the accounting system in the Information Age that would furnish useful data and information to investors to make rational decisions?

Practice Projects Answers will vary.

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Research Methods for Business

Additional Topics for Bibliography & Literature Survey Absenteeism Alienation Appraisal Systems Conflict Control Systems in Organizations Communication Competence Drug Abuse and Alcoholism in Industry Executive Stress

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Financial Markets Interpersonal Communication Leverage Buyout Price Wars Role Ambiguity Role Conflict Sense of Competence Stress Tax Reforms

Research Methods for Business

CHAPTER 4 THE CRITICAL LITERATURE REVIEW Instructional Goals 1. To clarify the purpose of a critical literature review and explain that the purpose of a critical literature review depends on the type of research.

2. To explain how to approach a critical literature review so that students are able to perform a critical literature review and to document the literature review.

3. To encourage students to develop bibliographies by accessing available on-line data bases.

4. To require students to write a good literature review in the areas of their research interests and to make them aware that most class term papers could use this type of introduction to enhance their value.

5. To discuss the ethical issues of documenting the literature review.

Discussion Questions 1. What is the purpose of the literature survey?

Basically to make sure that none of the important variables are left out in the study and to generate a parsimonious set of factors which would help to explain or predict the phenomenon under investigation.

2. How would you go about doing literature survey in the area of corporate

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Research Methods for Business social responsibility?

I would first obtain all the references and abstracts relating to the area of CSR through on-line systems, then organize the studies based on the particular aspects they address, and finally, write up a review of the available literature.

3. Why is appropriate citation important? What are the consequences of not giving credit to the source from which materials are extracted?

Most published articles are copyrighted. There are rules as to how much can be quoted from the original text without obtaining the journal’s and the author’s permission. If permission is not obtained for quotes exceeding the autthorized limit, the individual quoting the material is liable to be sued for plagiarism and can even be expelled from the professional society to which he or she belongs.

4. After studying and extracting information from all the relevant work done previously, how does the researcher know which references, articles, and information should be given prominence in the literature survey?

The mass of information extracted from the various published research and technical and other reports, will indicate to the researcher the key variables that need to be considered in the particular situation where the problem has been identified. The choice of the variables for inclusion in the study will be a function of the frequency with which they are repeatedly found to be significant in the various research studies, the relevance of the variables to the current research context, and considerations of parsimony. Having decided on the key variables for inclusion in the study, the researcher can then integrate the information found in the studies that discuss these variables. Other studies which had equally relevant variables but which had to be excluded from the current research for certain valid reasons should also be briefly discussed. The reasons for their exclusion should be explicitly stated in the literature survey section.

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CHAPTER 5 THEORETICAL FRAMEWORK AND HYPOTHESES DEVELOPMENT Instructional Goals 1. To clarify the differences in the four types of variables – dependent, independent, mediating, and moderating. Students find it particularly difficult to differentiate between mediating and moderating variables.

2. To elucidate the three basic components of the theoretical framework emphasized in the book and to explain that paying attention to these, at this stage, enables students to generate well-developed, testable hypotheses at the subsequent step.

3. To stress the importance of formulating directional alternate hypotheses whenever it is possible.

4. To require students to work on the 14 small exercises interspersed in the chapter, at the appropriate times, and to discuss these in class as the lecture and discussions on the different types of variables progress.

Discussion Questions 1. Because literature survey is a time-consuming exercise, a good, indepth interview should suffice to develop a theoretical framework.

Discuss this statement.

Literature survey is an important though time-consuming exercise and has to be done for several reasons. Even an in-depth interview may not surface some important factors that may be relevant for finding answers to the problems. In other words, certain critical factors may be

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Research Methods for Business overlooked both by the interviewee and the researcher, in which case no solution to the problem will emerge even after the research findings are implemented. A literature review will sensitize and make the researcher aware of all the important factors that have been found to be related to the problem in past studies. It will also help the researcher eliminate trivial factors or variables from the investigation, thus ensuring parsimony and increasing effectiveness. Secondly, a good documentation of the previous work done in the area not only lends credibility to the results found, but also adds to the scientific quality of the research by increasing replicability, generalizability, and parsimony.

Finally, a good literature survey, and a theoretical framework formulated on the basis of past studies contribute to the growth of scientific knowledge, rather than research becoming a futile exercise in reinventing the wheel.

2. Good models are complex. What’s more, a good model should include both moderating and mediating variables. Discuss this statement.

There is no relationship between the quality of a model and the complexity of a model. Recall that parsimony is one of the hallmarks of scientific research: Simplicity in explaining the phenomena or problems that occur, and in generating solutions for the problems, is always preferred to complex research frameworks that consider an unmanageable number of factors.

A good theoretical framework identifies and defines the important variables in the situation that are relevant to the problem. Moderating and mediating variables may or may not be important to the problem. A good model does not necessary include moderating and mediating variables.

3. Academic researchers usually develop more complex and elaborate models than applied researchers. Discuss this statement.

No. The complexity of a model is not related to type of research in terms of basic versus applied research. Again, parsimony is one of the hallmarks of scientific research. The term scientific research applies to both basic and applied research.

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Research Methods for Business 4. In an applied research context you do not need to explain the relationships between the variables in your conceptual model. Discuss this statement.

A theoretical framework is the foundation of hypothetico-deductive research as it is the basis of the hypotheses that you will develop. A theoretical framework represents your beliefs on how certain phenomena (or variables or concepts) are related to each other (a model) and an explanation on why you believe that these variables are associated to each other (a theory). Both the model and the theory flow logically from the documentation of previous research in the problem area.

Integrating your logical beliefs with published research, taking into consideration the boundaries and constraints governing the situation, is pivotal in developing a scientific basis for investigating the research problem.

A good theoretical base thus adds rigor to a purposive study. Rigor connotes carefulness, scrupulousness, and the degree of exactitude in research investigations. Rigor is one of the hallmarks of scientific research which pertains to both basic and applied research.

5. There is an advantage to stating the hypothesis both in the null and the alternate; it adds clarity to our thinking about what we are testing. Explain.

The null hypothesis is set so that the alternate hypothesis becomes testable. When the observed Z value is greater than or equal to the critical Z value for a given confidence level (usually 95 percent), then we know that we ought to accept the alternate hypothesis. If, however, the critical Z value is more than the observed Z value for a given level of confidence, we would be inclined not to reject the null but to reject the alternate. Setting up the null, thus helps us to understand that though the null hypothesis itself is not testable, it helps to decide whether we should accept or reject the alternate.

6. It is advantageous to develop a directional hypothesis whenever we are sure of the predicted direction. How will you justify this statement?

In a directional hypothesis, we might conjecture on some sound and logical basis, that variable X is greater than variable Y. In the nondirectional hypothesis we merely conjecture that X and Y will not be equal, meaning that either of the one can be greater than the other. The directional hypothesis involves a one-tailed significance test, and the

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Research Methods for Business non-directional involves a two-tailed test. To reach a level of significance p=.05, the critical value of the observed Z should be 1.64 for a one-tailed test, and 1.96 for a two-tailed test. Supposing the true observed Z value in a particular case is 1.72, then we would accept the hypothesis if it was stated directionally, and reject it if it was stated nondirectionally. In a sense, the two-tailed test is more conservative but a hypothesis that is logically derived as a one-tailed test would be rejected if it is non-directionally stated, and we would be incorrectly rejecting a hypothesis that is true, thus committing a Type II error. It is for this reason that we should state a directional hypothesis when we are sure of the predicted direction based on good theory and logic.

7. In recent decades, many service markets have been liberalized. For this reason, incumbent service firms are facing new competitors and must address customer switching. You are discussing the determinants of customer switching with a service firm manager. She believes that product quality, relationship quality, and switching costs are important determinants of customer switching.

You agree with the contention that product quality and relationship quality are important determinants of switching. However, you believe that switching costs moderates the relationships between product quality, relationship quality and customer switching.

Provide arguments for this contention.

Switching costs include the time, money and effort the customer perceives, when changing from one provider to another. We expect that switching cost do not directly affect customer switching. That is, we posit that a customer will not switch service providers because the switching costs are low or high. Instead, we propose that the negative relationship between product and relationship quality and customer switching is stronger in situations with low switching costs. When switching costs are low customers switch service providers when the relationship quality and product quality is low.

However, when switching costs are substantial, customers are likely to maintain business relationships with existing service providers even when the relationship and product quality is low.

8. For the following case titled Sleepless Nights at Holiday Inn (published in Business Week and adapted here):

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Research Methods for Business a.

Identify the problem

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Develop a theoretical framework

c.

Develop at least four hypotheses.

Sleepless Nights At Holiday Inn Just a few years ago, Tom Oliver, the Chief Executive of Holiday Hospitality Corp., was struggling to differentiate among the variety of facilities offered to clients under the Holiday flagship – the Holiday Inn Select designed for business travelers, the Holiday Inn Express used by penny pinchers, and the Crowne Plaza Hotels, the luxurious hotels meant for the big spenders. Oliver felt that revenues could be quadrupled if only clients could differentiate among these.

Keen on developing a viable strategy for Holiday Hospitality which suffered from brand confusion, Tom Oliver conducted a customer survey of those who had used each type of facility, and found the following. The consumers didn’t have a clue as to the differences among the three different types. Many complained that the buildings were old and not properly maintained, and the quality ratings of service and other factors were also poor.

Furthermore, when word spread that one of the contemplated strategies of Oliver was a name change to differentiate the three facilities, irate franchises balked. Their mixed messages did not help consumers to understand the differences, either.

Oliver thought that he first needed to understand how the different classifications would be important to the several classes of clients, and then he could market the heck out of them and greatly enhance the revenues. Simultaneously, he recognized that unless the franchise owners fully cooperated with him in all his plans, mere face lifting and improvement of, customer service would not bring added revenues.

Problem Statement: Research question: How can brand awareness be brought about to increase the revenues of Holiday Inn?

Theoretical Framework Only after Oliver has understood how the different classifications would be important to the three classes of intended clients through survey data, can a meaningful theoretical framework be developed. But, based on what information is currently available, the following framework can be attempted.

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Research Methods for Business The nature of the building facilities, how the buildings are maintained, and the quality of service provided – the three independent variables – would differentiate the three distinct types of Holiday Inn facilities and increase brand awareness among the users. The better the buildings, the better their maintenance, and the more differentiated the services provided, the greater will be the perceived differences in the three types of Holiday Inn facilities by clients. However, if the Franchise owners do not cooperate in highlighting these differences to clients, no amount of the improvements made in the independent variables will help to increase the brand awareness. It is only when the Franchise owners actively promote the idea of differentiated facilities- the moderating variable – can the brand awareness be increased, and as a consequence, the revenues.

Hypotheses 1. The more differentiated the building facilities, the more the brand awareness.

2. The more differentiated the maintenance of the facilities, the more the brand awareness.

3. The more differentiated the services to the clients, the more the brand awareness.

4. Differentiated building facilities, maintenance, and service will influence brand awareness only if the Franchise owners cooperate and actively promote the idea of differentiation. If they don’t, no amount of differentiation of the three independent variables will help clients to understand the differentiation (increase brand awareness).

9. Develop a conceptual model for the scenario below.

Incidence of smoking in movies has started to increase again, after having declined for several decades. According to the National Cancer Institute smoking is seen in at least three out of four contemporary box-office hits. What’s more, identifiable cigarette brands appeared in about one-third of all movies in 2008. Exposure to smoking in movies is an important predictor of adolescent smoking initiation: smoking in movies has been shown to affect adolescents’ intentions to start smoking.

In turn, the intentions to start smoking are determined by a more positive attitude toward smoking after seeing a film character smoke. Recent research has revealed

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Research Methods for Business that the relationship between seeing a film character smoke and the attitude toward smoking is stronger when a person’s identification with a film character increases.

These findings are consistent with social learning theory, which predicts that attitudes and behaviors are modeled by observing the behaviors of others.

Exposure to smoking in movies

Attitude toward smoking

Smoking intentions

Identification with a film character

10. Develop a theoretical framework for the following case.

Once given, perks are extraordinarily hard to take away without sapping employee morale. The adverse effects of these cuts far outweigh the anticipated savings in dollars. Research has shown that when the reason behind the cuts is explained to employees, morale does not drop.

Perks (IV) boost the morale of employees (DV), while understandably, withdrawing the same saps it. However, if the reasons for the cuts in perks (MV) are explained to the employees, they see the logic behind the cuts and their morale is not affected. Thus, only when the reason for cut in perks is explained to employees, does their morale not sag.

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Product placement is a form of advertising in which a company’s products and name are intentionally positioned in motion pictures, television programs, radio broadcasts, and the like. Product placement can take many forms: verbal mentions in dialogue, actual use by a character, or visual displays (for instance a company logo on a vehicle or billboard).

Develop a theoretical framework on this issue, based on a review of the current literature. This framework should include: - a specification and definition of an appropriate dependent variable; - a conceptual model that describes the relationships between the dependent variable, at least one independent variable, and either a moderating or a mediating variable; - a theory on why you would expect these relationships to exist; - an appropriate number of testable hypotheses.

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Research Methods for Business Answers will vary.

Answers to Exercises 5.1 To 5.14 in the Text Book Exercise 5.1 The dependent variable is reaction to new information because it is the primary variable of interest to the researcher.

Exercise 5.2 The dependent variable is product desirability.

Exercise 5.3 VARIABLE Accuracy of forecasts Amount of information

LABEL Dependent variable

REASON Main variable of interest

Independent variable

(Helps to explain the variance in accuracy of forecasts)

Exercise 5.4 VARIABLE Persuasiveness of message Attractiveness spokespersons

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LABEL Dependent variable

REASON Variable of primary interest

Independent variable

Explain the variance in persuasiveness

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Exercise 5.5 VARIABLE Productivity Off-the-job classroom training Age

LABEL Dependent variable Independent variable Moderating variable

Explanation The main variable of interest to the manager is productivity - the dependent variable - the variance in which is expected to be explained by the independent variable, off-the-job classroom training. The more off-the-job training given to the workers, the greater their productivity However, only those who are under fifty years of age would increase their productivity with increased off-the-job training.

This will not be true for those who are over fifty years of age since their interest in classroom training and the like will not be high. Thus age is the moderating variable.

Exercise 5.6 VARIABLE Behavioral intention to insure Fear appeals Anxiety

LABEL Dependent variable Independent variable Moderating variable

Exercise 5.7 Situation 1 Motivation to Work as an Independent Variable The performance of employees is influenced by their motivation to work.

Situation 2 Motivation to Work as an Intervening Variable

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Research Methods for Business Employees perform better when they are given challenging jobs, because such jobs tend to motivate them to work.

Situation 3 Motivation to Work as a Moderating Variable The performance of employees with low levels of motivation to work will not improve despite increases in job challenge.

Exercise 5.8 VARIABLE Problems Following Accounting Principles Confusion Experience in Book Keeping

LABEL Dependent variable Independent variable Intervening variable Moderating variable

Explanation The extent to which accounting principles are followed – the independent variable – explains the variance in the dependent variable problems for the organization. If individuals do not follow the accounting principles, confusion ensues (intervening variable that results as a consequence of the independent variable at time T2). But, the failure to follow the principles will result in confusion and problems only for those individuals who have no experience in book keeping. Those who have knowledge of book keeping will figure out ways to deal with the situation. Hence, experience is the moderating variable.

Exercise 5.9 VARIABLE Morale Working conditions Pay scale Vacation benefits Side income Happiness

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LABEL Dependent variable Independent variable Independent variable Independent variable Moderating variable Intervening variable

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Explanation The independent variables of improved working conditions, better pay, and vacation benefits influence the dependent variable, morale. When these three independent variables are high in a work situation, then morale is also high.

However, increased pay will not increase the morale of all workers. Only those who do not have good side incomes will experience greater happiness (the intervening variable) when their pay is increased, and their morale also increases.

For others, the relationships between pay and morale will not hold good. The intervening variable, happiness, is a function of high pay (for those without side incomes). It clarifies the relationship between pay and morale.

Exercise 5.10 Problem Statement What are the benefits of using avatars as company representatives on commercial Web sites?

Conceptual Model Involvement

Informative Site

Satisfaction with the Company

Entertaining Site

Purchase Intentions

Avatar Presence

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Exercise 5.11 Problem Statement Can cancer patients’ successful recovery be improved through quick and correct diagnosis, carefully following the doctor’s instructions, and keeping the patients in peaceful and quiet surroundings?

Theoretical Framework for Exercise 5.11 Cancer patients’ successful recovery is of main interest to the study, and successful recovery is expected to be predicted by three independent variables.

Thus, recovery is the dependent variable in the study and the three independent variables are: (1) quick and correct diagnosis by the doctor; (2) careful following of instructions by the nurses; and, (3) peace and quiet in the vicinity. An intervening variable in the situation is rest, and a moderating variable is the stage of cancer.

When the disease is quickly and correctly diagnosed by the doctor as soon as the patient comes in for the initial check-up, the chances of the patient being successfully cured of cancer are greater, since the cancerous growth would then be arrested in time. Also, when the nurses carefully follow the instructions of the doctor and administer to the patient the proper medicines at the right time, give them the diet as prescribed by the doctor, etc., the patients will recover without relapses. The human system needs certain medical, dietary and other aids to recover, which need to be administered at the right time and in the right quantities, and when this is done, the patients’ recovery is almost assured. Peace and quiet in the vicinity of the patients will allow the patient to rest properly, without any disturbances, which in turn, would help the successful recovery of the cancer patient since the body would now have a chance to build new healthy cells through the rest created by the peaceful surroundings. Thus, rest is an intervening variable, which is facilitated by the peaceful and quiet surroundings.

While the three independent variables of diagnosis, following instructions, and peace and quiet would help the patients to successfully recover from cancer, these three will not influence the recovery for those patients who come for .

Research Methods for Business treatment at advanced stages. In other words, only those cancer victims who come for treatment at the early stages of the disease would be helped to recover successfully when the doctor diagnoses the disease correctly and quickly, the nurses follow the doctor’s instructions carefully, and the patients are kept in quiet and peaceful surroundings. Those coming for treatment while in the advanced stages will not be helped.

Exercise 5.12 1. Ho: There is no relationship between working conditions and the morale of employees.

HA: If working conditions are improved, then the morale of the employees will also improve.

2. Ho: There is no relationship between vacation benefits and employees’ morale.

HA: Better vacation benefits will improve employees’ morale.

3. Ho: There is no difference in the relationship between pay and happiness among those who have side incomes and those who do not.

HA: Only those who do not have side incomes will become happier if their pay is increased.

4. Ho: There is no relationship between happiness and morale.

HA: Happiness and morale are positively correlated. .

Research Methods for Business 5. Ho: Working conditions, vacation benefits, and pay have no influence on the morale of employees.

HA: Working conditions, vacation benefits, and pay all have a positive influence on morale.

Exercise 5.13 Problem Statement How can the job performance (output) of the employees be increased through enriched jobs and rewards?

Theoretical Framework Job performance is the main variable of interest since the production manager is interested in increasing the output levels of employees. Job performance is, thus, the dependent variable. Job enrichment and rewards are the two independent variables which directly influence performance through the intervening variables of motivation and satisfaction. However, the valence of rewards to the recipient moderates the relationship among rewards, motivation, satisfaction and performance.

When the jobs done by the workers are such that they are more challenging and utilize all the skills that the workers have, then the workers will be both satisfied that they are able to use the skills they possess, and be motivated to engage in work behavior. When employees are thus motivated and satisfied, their performance levels will be high. Also, motivation and satisfaction will mutually influence each other. That is, when satisfaction is high, motivation will be high, and the higher level of motivation will, in turn, increase satisfaction. Thus, the two will mutually influence each other, and both together will influence performance.

If, on the other hand, the job is dull and repetitive, employees will not derive any satisfaction at the workplace since they will be bored, and their inclination to engage in work behaviors (motivation) will be low. When employee satisfaction and motivation are low, their levels of output (performance) will also be low.

Increased rewards will also offer employees both satisfaction and motivation, because employees will know that the effort put in by them is recognized and rewarded. This increased satisfaction and motivation will spur

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Research Methods for Business them on to perform even better since they will now have more zeal and enthusiasm. However, the relationship between increased rewards and the intervening variables of motivation and satisfaction will hold good only for those who desire and value the rewards dispensed by the organization. Those recipients who do not find the rewards valuable or desirous will not be turned on by the rewards, and their levels of satisfaction, motivation, and performance will not be enhanced. The valence of rewards thus moderates the relationship between rewards and the intervening and dependent variables.

Hypotheses HA1: If the job is enriched and utilizes all the skills possessed by the employee, then employee satisfaction will be high.

HA2: If the job is enriched and utilizes all the skills possessed by the employee, then employee motivation will also be high.

HA3: There will be a positive correlation between satisfaction and motivation.

HA4: Greater rewards will influence motivation and satisfaction only for those employees who find the rewards valent; not for the others.

HA5: Satisfaction and motivation will positively influence performance.

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Research Methods for Business HA6: The more enriched the job and the greater the skills utilized by the job, the higher the level of employee performance.

Exercise 5.14 Problem Statement How can minority women be retained in organizations?

Theoretical Framework Retention of minority women is the main variable of interest to the study, and hence, is the dependent variable. The independent variables that are likely to explain the variance in the retention of minority women are: (a) influential mentors willing to help, (b) informal networking with influential colleagues, (c) role models, and (d) high visibility projects. The intervening variable is satisfaction.

When influential officials in the system are willing to serve as formal or informal mentors minority women can learn the ropes for progressing in the organization. When women can network with influential colleagues, they will learn a lot about the political system of the organization and know where and when there are opportunities to advance. Role models help women to emulate the characteristics necessary to climb the ladder of success in the system. When women work on high visibility projects, they attract the attention of those in power and are likely to be promoted to higher level positions.

When the above four factors are absent in the work environment, dissatisfaction results due to the frustration of not having avenues for advancement. Dissatisfaction, which surfaces as a function of the absence of the four independent variables, is then the intervening variable which enables us to see why women quit the organization. It should, however, be noted that not all dissatisfied minority women leave the organization. Only those who have the resources and confidence to start their own business leave the institution. The others remain trapped in the system. Thus, wherewithal to start own business becomes the moderating variable.

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More Exercises on Theoretical Framework (with Answers) Note: These can also be used as exam questions.

I. Develop a theoretical framework for the following situation and state one testable hypothesis in the null and the alternate.

A school administrator is interested in finding how the threatened teachers’ strike can be averted. He knows that pay demands and the classroom’s physical environment are the two main issues in the situation. He, however, feels that these two are not major concerns for the teachers who are extremely dedicated to teaching.

Answer Theoretical Framework Since the administrator’s main concern is about the strike, teachers’ strike is the dependent variable, and an interest is evinced in averting it. Pay and the physical environment of the classroom are the two independent variables, which influence the strike situation. The greater the pay demands made by the teachers, the greater the possibility of a strike, since the school administration will not easily give in to a high pay hike which would bring any current negotiations between the two parties to an impasse and would precipitate a strike. The more uncongenial the classroom physical environment, the more difficult it will be for teachers to do an effective job in the classroom, and hence the greater the possibility of teachers going on strike to have the situation rectified. Thus, both pay demand and classroom physical environment would explain the variance in the probability of teachers going on strike. However, this relationship between the independent variables and the dependent variable will be true only for those teachers who are not dedicated to teaching for its own sake. The truly dedicated teachers would be more concerned about doing a good job despite the hardships faced by them, and hence for them, the pay demands and the classroom environment will not be factors influencing their decision to join the strike.

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Research Methods for Business

Hypothesis: H01: Dedication to teaching will not alter the relationship between the independent variables of pay and classroom environment and the dependent variable of teachers’ decision to go on strike.

HA1: Only for those teachers who are not truly dedicated to teaching, will pay considerations and classroom environment be factors that would influence their decision to go on strike.

2. A factory foreman is concerned about the high rate of absenteeism of his workers every Monday morning. His hunch is that the workers drink too much during the weekend, have a hangover on Monday mornings and cannot attend work. He also feels that the high rate of pay they receive allows them to become lethargic. From an informal talk with his employees, the foreman finds that almost every single worker drinks during the weekend. However, some said that they could handle drinks very well and never had hangovers. “Ha! Now I know,” mused the foreman, “only those who do not have an adequate tolerance level for alcoholic beverages suffer the effects of hangover and remain absent on Monday mornings. Of course, high pay may also be a reason.”

Given the above situation, answer the following: a. What would be the problem statement?

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Research Methods for Business b. Evolve a Theoretical Framework. c. Develop three hypotheses for testing.

ANSWER: a. Problem Statement Would pay and drinking influence absenteeism?

b. Theoretical Framework Absenteeism is the dependent variable, the variance in which is to be explained by the two independent variables, pay and weekend drinking. The more the pay received by workers, the more they tend to be lethargic (intervening variable), spending their time lazing around in the house, since they have enough money to take care of their immediate needs without working. They thus tend to remain absent. Excessive drinking during the weekend also contributes to absenteeism on Monday mornings, since the hangover from the weekend drinking (the intervening variable) would persist until late on Monday, which would prevent them from going to work. However, for those who have a high tolerance for liquor, hangover will not be a problem. In other words, tolerance for drinks is the moderating variable which has a contingent effect on the relationship between the extent of drinking and the extent of hangover people have. When people have hangovers, they will tend to remain absent since they will not be fit to perform their normal duties. In sum, pay and weekend drinking will have an effect on the absenteeism of workers. However, only for those who have a low tolerance for liquor, will more drinking during the weekends result in their experiencing hangovers on Mondays, which would prevent them from attending work. Those who have high tolerance levels will not experience hangover and will not remain absent from work.

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c. Hypotheses: HA1: The higher the pay of the worker, the higher will be the rate of his absenteeism from work.

HA2: Only for those who have a low tolerance for liquor, will heavy drinking lead to hangover, not for others.

HA3: Hangover due to heavy weekend drinking and absenteeism will be positively correlated.

3.a. With the following variables, develop a theoretical framework, using one of the variables (appropriately) as an intervening variable, and one as a moderating variable.

1) Job level (i.e., managerial versus non-managerial levels); 2) Loyalty (extent of loyalty felt for the organization in which the employee works); 3) Age (of employee); 4) Length of service (of employees); 5) Pride in working for the organization; 6) Organizational commitment (involvement with the system); 7) Lust for job hopping. b. Develop three hypotheses based on the theoretical

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Research Methods for Business framework, one of which should include the intervening variable, and other the moderating variable. c. What is the problem statement for which you have developed your theoretical framework?

Answer: a. Theoretical Framework The four independent variables–job level, age, length of service, and pride in working for the organization influence the organizational commitment of the members in work systems. Persons holding highly responsible positions tend to get committed to the organization since they help shape the organization through their policies and decision-making. Generally, older persons tend to be more loyal to the place where they work since opportunities to move on to other organizations become limited. Those who have served for a long time in the organization would also be more loyal to the organization (IW) and hence get committed to it. If one is proud of being a member of the organization, naturally the individual’s loyalty to the system (of which he is a part) would increase. We can also expect to find a correlation between length of service and employees’ pride in working for the organization. The longer employees work for the organization, the more they would tend to feel that they are an integral part of the organizational system and feel they belong to it. These feelings, in turn, will develop a sense of loyalty and attachment to the system. Once loyalty is developed, commitment to stay in the organization and doing one’s best for the organization would increase. However, high position, pride in working for the organization, age, and length of service, would not be instrumental in developing the organizational loyalty of such members as have a great adventurous spirit and a great desire to move from one job to another in different organizations. Thus, lust for job hopping would be the moderating variable which influences the relationship between the independent variables and the intervening variable, and thus, the relationship between the independent and the dependent variables.

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Research Methods for Business

b. Hypotheses: HA1: Only for those employees who do not have a lust for job hopping, would job level, age, length of service, or pride in working for the organization be correlated to their feelings of loyalty for the organization.

HA2: The more the employees are loyal to the organization the stronger will be their sense of commitment to the organization.

HA3: The longer people work for the organization, the more their feelings of pride in working for the organization are likely to be.

c. Problem Statement: What factors would account for employees’ commitment to the organization?

4. Develop a theoretical framework and three hypotheses for the following statement.

People high in their Need for Achievement (N.Ach) and who have high Protestant Work Ethic values, will be highly motivated to work. When they get motivated, they also slowly become involved in their jobs.

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Research Methods for Business

Answer: Theoretical Framework N.Achievement and work ethic values are the two independent variables that would account for the variance in the dependent variable of interest–job involvement. This relationship could be better understood through the intervening variable–motivation. That is, those who have a high need to achieve and accomplish things in their jobs, would be motivated to engage in work behavior, which in due course of time will get them so absorbed in doing their jobs that their egos will be tied to the job. Likewise, those who have high work ethic values, would feel that unless they work, they are no good, and hence would keep engaging in work behavior. This again is bound to increase their level of motivation to work. These frequent interactions with work will again get them ego-involved in their work. Thus, N.Ach and work ethic values will motivate people to work, which in turn would get them ego-involved in work.

Hypotheses HA1: The higher the Need for Achievement, the greater will be the level of motivation.

HA2: The greater the Protestant work ethic values people hold, the greater will be their level of motivation to work.

HA3: The greater the motivation in individuals, the greater their level of job involvement.

5. Here are eight variables: 1) Understanding Student Needs (by teacher); 2) Developing appropriate teaching strategies (by teacher);

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Research Methods for Business 3) In-class examples and exercises; 4) Student entry level skills; 5) Student understanding; 6) Student exam performance; 7) Difficulty of exam; 8) Stress. a. With these eight variables, develop a Theoretical Framework, treating variable #4 as a moderator, and variable #5 as an intervening variable. b. Develop four hypotheses.

Answer: Theoretical Framework a. The variance in the performance of students in the exam can be accounted for by the four independent variables – teacher’s understanding of the needs of the students, the different teaching strategies developed by the teacher, the number of in-class examples and exercises that the teacher gives, and how difficult the exam itself happens to be. When the teacher understands students’ difficulties and needs in terms of coaching and evolves appropriate teaching strategies in order to meet the needs of the students to understand what is being taught, student understanding will increase. In addition, if the teacher uses several examples to put across the points and gives exercises in class to test the extent to which students have understood, then, the students’ level of understanding of what is being taught will increase. However, the entry-level skills of the students should be sufficiently adequate to enable them to understand what is being taught. If the students’ entry level skills and comprehension are very low, then no amount of the teacher making efforts to understand student needs, evolving strategies, and giving new examples and exercises, will help the student to understand better, since they do not have the basic prerequisite knowledge for understanding what is going on in the class. If, however, the entry level skills are adequate, then the teacher taking all the above steps would help enhance student learning. When students’ level of understanding increases, their level of performance in the exam will also be better.

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Research Methods for Business The level of difficulty of the exams is also another factor that would account for the variance in student performance. The more difficult the exam, the more stressed the students will feel while answering the exam, and the lower will be their performance level in the exam. Thus, stress is the intervening variable here

In sum, the three variables of understanding student needs, teaching strategies, and in-class exercises and examples will help increase the level of student understanding, which, in turn, will enhance the level of their exam performance. However, the more difficult the exam, the more the stress experienced by the students, and the lower their level of performance in the exam.

b. Hypotheses HA1: Only for those who have the requisite entry level skills, will more in-class exercises and examples help increase the students’ level of understanding of the subject taught.

HA2: The more difficult the exams, the greater the stress experienced by the students.

HA3: The higher the level of stress experienced by the students, the lower their level of performance in the exam.

HA4: When students understand the subject better, they will perform better in the exam.

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Research Methods for Business

Marketing 1. Factors Influencing Decision to Purchase The four independent variables, quality, price, felt need for the product, and brand name influence customers’ decision to purchase products. When a product is of good quality, consumer confidence in the product grows (the intervening variable), and the stronger becomes the decision of the consumer to purchase the product. A reasonable price and a good brand name also induces the consumers to purchase the product. Of course, the more the consumer needs the product (such as basic needs or essentials), and the better the price, the quality, and the brand name, the greater the prospect for the consumer making the decision to buy the product. Usually, the better known the brand name, the greater the desire to purchase a product bearing the good brand name. However if a prospective consumer happens to have a strong brand loyalty for another brand than the one marketed, then, the brand name of the product will not influence the purchase decision. Thus, only for those who do not have a strong brand loyalty to a different product, will the relationship between brand name (IV) and purchasing the product (DV) hold true.

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Research Methods for Business 2. Factors Affecting Coupon Redemption Rates

Coupon redemption, a strategy for spurring sales, is the variable of interest to this study. Needless to say that this sales strategy will be effective when the distribution channels for the product in question are well planned, when there is sufficient advertising to let the consumers know about the promotion, when the package clearly indicates the coupon redemption scheme with the expiration date, if any, and the packaging of the product is of the right size (neither too big nor too small to serve the needs of the consumer). Of course, all these factors will not help, unless there is an established frequent need for the product for consumers (Moderating variable).

Accounting 3. Factors Influencing the Selection of Auditors by Companies.

The influence of the reputation of the auditing firm, the fees charged, and the quality of service rendered, on the selection of the auditor for a firm is quite simple. The greater the reputation of the auditing firm, the more the likelihood of its being selected, the better the quality of service

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Research Methods for Business rendered, and the more reasonable the fee that is charged, the more likely is a particular auditing firm going to be chosen.

Interactions is the intervening variable that helps us to see how the proximity of the auditing firm to the business plays a part in auditor selection. If the auditing firm is proximal to the business, the closeness encourages frequent interactions between the two parties to have matters clarified at low cost. This, in turn, influences the business to choose an auditing firm that is proximal. However, the very big business companies will not choose any but the big eight Accounting firms.

Hence, for them, the choice of auditors from any but the big eight will not be influenced by the independent variables in the model. Thus, the size of the business firm becomes the moderating variable.

4. Factors that Account for the Variance in Bad Debts

Bad debts is the variable of interest to this study, the variance in which is theorized to be explained by the three factors of credit policy, monitoring of receivables, and pay-out period on installment loans. A sensible credit policy, no doubt, will reduce bad debts. A follow up on accounts receivable will further reduce bad debts by recovering as much as possible before things get out of control. The pay-out period will also have an effect on the amount of bad debts. If the pay-out period is too

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Research Methods for Business long (stretching over, say, several years), there is likely to be a tendency to slack off on the installment payments (the intervening variable), especially if the value of the product depreciates substantially. However, customers who consider their reputation for creditworthiness as paramount, will still honor their commitments despite the long drawn out payment periods. Thus, class of customers will moderate the relationship between the independent variable, pay-out period, and the intervening variable, slacking off on payments.

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Research Methods for Business

Finance 5. What are the most important factors that influence the profits of a firm?

6. Critical Factors that Influence the Value of a Company’s Stock.

The value of the company’s share is of interest to the study. If a company sustains its high earnings year after year, its credibility as a successful company would be enhanced and the public will believe it has further prospects for growth (intervening variable). This will help to explain how sustained earnings will increase the stock value of the company. Faith in the managerial competence of the key people in the company will hold the stock value high, even in times of mild recession.

Thus the perceived managerial competence of the individuals in the company would influence the stock value.

Usually, the higher the dividends, the higher the stock value; however, if the higher dividend declared is perceived as a stunt to hoodwink the public, the stock value will not go up. Only when the public expects that the dividend policy will be maintained by management in the future (moderating variable), will the stock value of

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Research Methods for Business the company be influenced by the higher dividends that are declared.

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Research Methods for Business

CHAPTER 6 ELEMENTS OF RESEARCH DESIGN Instructional Goals 1. To clarify the various components of research design as indicated in Figure 5.1 of the book; 2. To highlight obvious combinations in research design choices; for example, a lab or field experiment is invariably conducted to establish cause and effect relationships; a lab experiment is always done in a contrived setting with maximal researcher interference and in a longitudinal fashion.; 3. To stress the importance of making optimal research design choices aimed at balancing scientific rigor and research costs (and feasibility).

Discussion Questions 1. What are the basic research design issues? Describe them in some detail.

Basic research design issues are primarily a function of the purpose of the study (whether it is exploratory, descriptive, or hypothesistesting), and relate to such aspects as the type of study to be done (causal or correlational), the setting in which it will be done (natural or contrived), how much of researcher control will have to be exercised (very little in the case of field studies, to very much in the case of experimental designs), how many times data will have to be collected (one shot versus longitudinal), and the unit of analysis – i.e. the level at which data will be aggregated. For most correlational studies, the field setting with minimal researcher influence will be the choice. Most field studies are generally cross-sectional, though some could be longitudinal.

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Research Methods for Business Longitudinal studies, though better for understanding the dynamics of the situation fully, also consume more time and resources. Thus, the costs of a study also determine some of the design choices. The unit of analysis depends on whether the research question focuses on individuals, dyads, groups, or entire systems.

2. Why is it important to consider basic research design issues before conducting the study and even as early as at the time of formulating the research question?

The research design ensures that the purpose for which a study is conducted, is effectively addressed. Some studies are focused on finding results which will be highly reliable, whereas some others, might be interested in “getting some idea” of what is going on, rather than wanting to know the “absolute truth”. If the rigor needed can be achieved at only high cost (e.g. more manipulation and control, conducting the study over an extended period of time with a big sample, etc), and if this cost is considered too much, then the goals of research might have to be revised or even completely changed. Thus, thinking through the research design issues at the early stages helps in averting several problematic issues later.

3. Is a field study totally out of the question if one is trying to establish cause and effect relationships?

Generally, lab and field experiments rather than field studies, are useful for establishing greater internal validity, or faith in cause and effect relationships. However, when longitudinal data are collected from field studies, or when particular types of statistical analyses are done on cross sectional data gathered from field studies, it is sometimes possible to establish the existence of causal relationships. More specifically, cross-lagged correlation analysis (not discussed in the book) using data collected at more than one point in time, can indicate causal relationships.

Even using cross-sectional data (i.e. with data collected at one time only), statistical techniques such as path analysis, can identify cause and effect relationships. However, in such cases, the data and the theory will have to lend themselves to certain assumptions which are not always easily met.

4. “An exploratory study is just as useful as a predictive study”.

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Research Methods for Business Discuss this statement.

Without exploratory studies, new areas of knowledge cannot be developed. Every theory we now have must at one time have started as an exploratory research study. Exploratory research lays the groundwork for understanding new phenomena, and developing new measures to test these. The exploratory studies of today blossom into the predictive studies of tomorrow, and in that sense both types of studies are useful and essential to generate knowledge, understanding, and prediction of business phenomena.

5. Why is the unit of analysis an integral part of the research design?

The unit of analysis is an important issue to be considered to find the right answers to the research questions posed. The unit of analysis also determines the sample size. For example, if one is interested in researching the factors that influence the stock market in three different European countries, it is the behavior of stock markets in those three countries that are of central interest to the study, and not the individual stock market within each country. At the time of data analysis, the data gathered from each of the stock markets within each country will somehow have to be meaningfully aggregated, and only those three data points, which will form the three samples, have to be taken into consideration. Thus, the unit of analysis is a function of the research question posed, and is an integral part of the research design. As will be seen later, research design decisions relating to sampling also depend on the unit of analysis. Let us say a researcher decides to have a sample size of 30 for a study. Sampling 30 individuals in an organization when the unit of analysis is individuals, is not as problematic as sampling 30 organizations when the unit of analysis is organizations, or sampling 30 countries when the unit of analysis is countries. Thus, the unit of analysis influences other decisions such as the sampling design, the sample size, data collection methods, etc.

6. Discuss the inter-relationships among: non-contrived setting, the purpose of the study, type of investigation, researcher interference, and time horizon of the study.

A non-contrived setting simply indicates that the research is conducted where the flow of events normally takes place – i.e. in the natural system. Such research could be either field studies or field experiments. The purpose of the field study could be for exploration and

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Research Methods for Business understanding of phenomena, for describing phenomena, or for hypothesis-testing. The field study is a correlational study, and not usually initiated to explore cause and effect relationships. Researcher interference in field studies is minimal. Field studies could be either cross sectional or longitudinal. Field experiments, on the other hand, are undertaken to establish cause and effect relationships, are longitudinal in nature, and researcher interference in field experiments is much more than in field studies, since the independent variable will have to be manipulated. These are mostly hypothesis-testing studies, though they could be exploratory in nature, as well.

7. Below are three scenarios. For each, indicate how the researcher should proceed with the following, giving reasons: a. The purpose of the study b. The type of investigation c. The extent of researcher interference d. The study setting e. The time horizon for the study f. The unit of analysis.

Scenario A Ms. Joyce Lynn, the owner of a small business (a woman’s dress boutique), has invited a consultant to tell her how she is different from similar small business within a 60-mile radius, in regard to her usage of the most modern computer technology, sales volume, profit margin, and staff training.

Answer This will be a descriptive study (describing how she compares with the others). Data will be collected from small businesses on the use of computers, sales volume, profit margin, and training programs and comparisons made. Some of these descriptions might be qualitative, as for example, in describing training methods. This will be a field study (using many similar small businesses), and researcher interference will be minimal. It will be a one-shot study, and the unit of analysis will be small business systems.

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Research Methods for Business Scenario B Mr. Paul Hodge, the owner of several restaurants is concerned about the wide differences in the profit margins of the various restaurants. He would like to try some incentive plans for increasing the efficiency levels of those restaurants that are lagging behind. But, before he introduces this, he would like to be sure that the idea will work. He asks a researcher to help him on this issue.

Answer This would be a causal, hypothesis-testing study. It will be a field experiment, using one or two restaurants to manipulate incentive plans and see if this causes an increase in profit margins in those restaurants. Because of the manipulation, there will be some researcher interference with the natural flow of events. The time horizon for the study would be longitudinal since data will be obtained on sales, profits, etc., both before and after the manipulation. The unit of analysis would be the restaurant.

Scenario C A manager is intrigued why some people seem to derive joy from work and get energized by it, while others find it troublesome and frustrating.

This would be a correlational, hypotheses-testing, field study with minimal researcher interference. It will be a one-shot study and the unit of analysis will be individuals.

Exercises Doing the exercises in the chapter will help the students to apply the basic elements of research design to different scenarios. More in-class exercises are offered at the end of this chapter (with answers), that can be used either in the classroom or as exam questions.

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Research Methods for Business Answers to Exercises in the Book

Exercise 6.1 A foreman thinks that the low efficiency of the machine tool operators is directly linked to the high level of fumes emitted in the workshop. He would like to prove this to his supervisor through a research study.

1. Would this be a causal or a correlational study? Why? 2. Is this an exploratory, descriptive, or hypothesis-testing (analytical or predictive) study? Why? 3. What kind of a study would this be : field study, lab experiment, or field experiment? Why? 4. What would be the unit of analysis? Why? 5. Would this be a cross-sectional or a longitudinal study? Why? 1. This would be a causal study because the operator wants to prove to the supervisor that the fumes are causing operators to be low in their efficiency. In other words, the machine tool operator is trying to establish the fact that fumes cause low efficiency in workers.

2. This is an analytical study because the machine tool operator wants to establish that fumes cause low efficiency and convince her workshop supervisor through such analysis (i.e. establish cause and effect relationship).

3. This would be a field experiment. Though the study would be set up in the natural environment of the workers where the work is normally done, the amount of fumes will have to be manipulated while other factors such as atmospheric pressure may have to be controlled. Because of the location of the study, it will be a field experiment.

4. The unit of analysis would be the individual operators. The data will be collected with respect to each operator and then the conclusion will be made as to whether the operators are less efficient because of the fumes emitted in the workshop.

5. This would be a longitudinal study because data will be gathered at more than one point in time. First, the efficiency of the operators would be assessed at a given rate of fume emission. Then the fumes emitted

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Research Methods for Business would be manipulated to varying degrees, and at each manipulation the efficiency of the workers would again be assessed to confirm that the high rate of fume emission causes a drop in operators’ efficiency.

Exercise 6.2 You want to examine how exposure to thin or heavy models in advertisements influences a person’s self-esteem. You believe that the effect of exposure to models in advertisements depends on the extremity of the model's thinness or heaviness.

Discuss the design decisions that you as a researcher will make to investigate this issue, giving reasons for your choices.

An experimental study (causal study) will be needed since the goal of the study is to test a cause-and-effect relationship.

A pretest will help you to select advertisements containing female models for the following four conditions: moderately thin, extremely thin, moderately heavy, and extremely heavy; - participants view an advertisement booklet containing ads with female models.

- participants rate each model in terms of size (-5 =extremely overweight, +5 = extremely thin) and attractiveness (-5 = extremely unattractive, + 5 = extremely attractive).

Based on these scores, you will be able to select advertising models in each condition.

Note that models should differ from each other in terms of size but not in terms of attractiveness (you have to perform post hoc comparisons to test for this).

In the actual experiment, participants must be randomly assigned to one of the four conditions of the 2 (model size: thin vs. heavy) * 2 (extremity of model size: moderate vs. extreme) between-subjects design. Participants are then provided with a booklet containing ads: ads with models, pertaining to their condition, and filler ads with no models (randomize the order of the ads). Eventually (after one or more filler tasks) participants complete a self-esteem scale such as for instance the Appearance SelfEsteem Scale (Heatherton and Polivy 1991).

Exercise 6.3 .

Research Methods for Business You want to investigate the specific effects of specific emotions on customers' behavioral responses to failed service encounters across industries.

Discuss the design decisions that you as a researcher will make to investigate this issue, giving reasons for your choices.

Because it is difficult (and probably unethical) to induce specific emotions in an experiment a field study seems to be the more logical choice. Note however, that when you use a field study, that it is very important to control for variables that might potentially bias your results such as complaint success likelihood and switching costs.

The critical incident technique is a method that may help you to collect a wide variety of negative experiences with service organizations.

Exercise 6.4 War on Cancer Dr. Larry Norton of Memorial Sloan-Kettering Cancer Center predicts that cancer treatment will undergo major changes. Several drugs are being developed to battle cancer without harming healthy tissues. It is a question of discovering which of these drugs does the job best.

Design a study that would help find which drug would do the trick.

An experimental study (causal study) of the Solomon Four-Group design will be needed. A count of the healthy tissues in cancer patients at more or less the same stage of cancer progress will first be taken, with about 20 patients in each group. Each group, but the control group, will be treated with the different new drugs. The cancer cell count will be taken both before and after treatment for a period of time (say, 3 to 6 months) to see which has the most beneficial effect.

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Research Methods for Business Thus it would be a longitudinal study with some manipulation (drug variation) and control (matched or randomized groups). The unit of analysis will be groups.

More in-Class Exercises on Research Design (with Answers) Several situations are given below. For each situation, respond to the following research design questions. a. What would be the nature of the study that would be designed Exploratory, descriptive, or hypothesis-testing? b. Give reasons for your answer to (a) above. c. Would it be a Field study, Comparative study, Lab experiment or Field experiment? d. Would it be a causal or correlational study? e. Justify the reasons for your answer to (d). f. Would it be a longitudinal or cross-sectional study? g. How would you explain your answer to (f) above? h. What would be the unit of analysis? i. Defend your answer to (h) above.

1. A researcher wants to test the theory that low levels of oxygen in the mines is the single most important factor that tires the miners easily.

ANSWER: a & b: Hypothesis-testing, because the researcher wants to analyze and test if the low levels of oxygen would, in fact, cause tiredness in miners. c: Will be a Field Experiment, because there would be manipulation of the levels of oxygen in the natural environment of the workers. d & e: Causal study, because the researcher wants to see if low levels of oxygen cause tiredness in miners. He wants to establish a cause .

Research Methods for Business and effect relationship between the independent and the dependent variables. f & g: It would be a Longitudinal study because data on tiredness will be collected from the same batch of workers before and after each manipulation of the extent of oxygen injected into the environment. h & i: The unit of analysis will be individual miners because the data will not be aggregated across groups, but each individual miner’s level of tiredness will be recorded and used in data analysis.

2. An Auditor is interested in knowing the relationship among the three variables – depreciation, assets accounting, and taxes paid.

ANSWER: a & b: Hypothesis testing, because the manager wants to analyze the correlations among the three variables. c: Comparative Field study since the data will be gathered from several firms. d & e: Will be correlational since the relationship (and not cause and effect relationships) among the variables is being studied. f & g: Cross sectional since the data will be gathered only once. h & i: Unit of analysis will be the firms.

3. The head-nurse in a hospital would like to have a profile of the patients that come to her ward.

ANSWER: a & b: Descriptive since the head nurse only wants a profile–a mere description of the type of patients who come to her ward. c: Field study, since the people coming to her ward (natural setting) will be studied. d & e: It is a descriptive study, using merely frequency distributions and means and standard deviations. It is thus neither a causal nor a correlational study. f & g: Cross sectional, since data will be gathered from each person just once to get the profile. h & i: Unit of analysis will be individual patients since individual profiles will be studied.

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Research Methods for Business 4. A basic researcher wants to engage in a research project which will enable her to establish the relationship between certain personality characteristics and the risk taking tendencies of stock brokers.

ANSWER: a & b: Hypothesis-testing, since the researcher would have formulated a conceptual framework of the type of personality characteristics that would induce stock brokers to take more risks, and would want to test her hypotheses. c: Field study since subjects will be studied in the natural environment in which they usually operate. d & e: Correlational study since the relationships among the personality characteristics and risk-taking are studied. f & g: Cross sectional since data will be gathered at only one point in time. h & i: Unit of analysis will be individuals (stock brokers) since the data analysis will be done on each individual’s responses without any aggregation across groups.

Note: This can also be set up as a Lab experiment in which Finance majors are put in a contrived setting and offered some investment assignments that call for risk taking. Their personality characteristics can be obtained through a questionnaire survey, and their risk taking behavioral tendencies assessed by manipulating the level of financial risks involved in the investments.

5. Bob’s Nissan and Toyota dealership is suffering from a severe decline in the number of car sales. Bob decides to test two approaches to sales. He randomly assigns his 12 salesmen to two groups. He then trains one group to use the “hard sell” approach and the other to use the “soft sell” approach so that he can determine which method is more effective.

ANSWER: a & b: Predictive, hypothesis testing study since Bob wants to be able to test which one of the two sales approaches will help sell more cars (i.e. predict which sales approach is effective). c: Field experiment since the independent variable “sales approach”

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Research Methods for Business is manipulated to be either hard or soft sell and tried in the natural environment in which sales usually take place and not in an artificial lab setting. d & e: Causal study, since Bob wants to know which approach would cause sales to increase. f & g: Longitudinal, because the sales levels, both before the manipulation and after, will be measured. h & i: Unit of analysis will be groups since the sales of each of the two groups – “soft sell” and “hard sell” salesmen – will be aggregated and compared.

6. A production manager wants to see if by providing enhanced automation technology, the productivity of the workers in the plants can be raised. However, before trying this with all the five plants, she would like to try this with a group of apprentices who work in one plant.

ANSWER: a & b: Hypothesis testing, analytical study, since the manager wants to be able to analyze the cause and effect relationship between enhanced automation and worker productivity. c: Field experiment, since the study will be conducted in the natural environment where events usually take place. d & e: Causal study, since causal relationships are trying to be established. f & g: Longitudinal, since productivity measures will be taken from the same workers before and after the introduction of the enhanced automation. h & i: Individuals will be the unit of analysis since there will be no aggregation of data across group members.

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Research Methods for Business

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Research Methods for Business

CHAPTER 7 DATA COLLECTION METHODS: INTRODUCTION AND INTERVIEWS

Instructional Goals 1. To introduce students to different methods of data collection including observational surveys, electronic surveys, and collecting information from unobtrusive sources; 2. To emphasize the advantages of obtaining data from multiple sources, and multiple methods of data collection; 3. To offer an idea of which data collection method would be appropriate during different stages of research.

4. To develop interviewing skills in students;

Discussion Questions 1. Describe different data sources, explaining their usefulness and disadvantages.

Secondary sources of data constitute all available sources from which existing information can be extracted. This could be published or unpublished information in the Library, in Government or Company records, in data tapes, on the internet, etc. Primary sources of data can be any source which provides information elicited directly for the first time. This could be organizations, individuals, trash cans, or whatever source from which the desired information can be obtained.

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Research Methods for Business Secondary data sources are useful because they offer a base on which to build further research without having to reinvent the wheel.

Past findings can spur new research; past data can also offer opportunities to analyze them from a different perspective or angle.

Under certain circumstances, however, secondary data might be misleading if one does not take the changed circumstances into consideration. For example, if old archives of national data are utilized to examine and draw conclusions about gender differences at the workplace, this might become an exercise in futility. The workplace has changed much now compared to 20 years ago – there are more educated career women, their aspirations are different, their current expectations of life are in contrast to what they were two decades ago, etc. As such, one has to be cautious while using secondary data sources.

Primary data will offer more correct and up-to-date information when phenomena are investigated. However, it costs more to collect fresh data, access to organizations is not always readily obtained, and people knowledgeable in research have to be co-opted. Generally, data collected through unobtrusive methods are more reliable than data gathered through surveys.

2. As a manager, you have invited a research team to come in, study, and offer suggestions on how to improve the performance of your staff. What steps would you take to allay their apprehensions even before the research team sets foot in your department?

As the manager, I would inform the employees of the Department in a meeting called for the purpose, that unless we can turn around and make some profits, the organization may have to lay off people. Since management does not see laying off personnel as an acceptable solution, at least at this stage, we are inviting outside experts to examine our operations and give us some ideas on how we may be able to increase our profits. If we all cooperate with the research team that will be coming in shortly, and provide them with whatever information they might need, it would help the company to implement the steps and processes necessary to increase output, make a profit, and retain the current employees.

3. What is bias and how can it be reduced while interviewing?

Bias is any error that creeps into the information gathered. Biases occur whenever incorrect information is provided to the researcher by

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Research Methods for Business whoever offers the information. Sometimes, genuine mistakes might be made and hence incorrect information could be provided. However, biases frequently occur because the researcher phrases the question in a particular way, inflects the voice in a particular manner, or simply because the respondent, zealous of pleasing the researcher, provides an answer that the individual believes is what the researcher would like to hear, even though it is not factual.

Bias can be reduced in interviewing by choosing the appropriate environment in which the interview is conducted, by establishing trust with the respondent, by phrasing questions so that they do not lead the interviewee to respond in a particular manner, by clarifying issues when the respondent seems confused, by not coming across as evaluative or judgmental, and by not placing special emphasis on specific words.

4. Discuss the advantages and disadvantages of personal and telephone interviews.

See Table 7.1 (page 126).

5. What are projective techniques and how can they be profitably used?

Projective techniques help the respondent to offer answers to questions which might otherwise be rather difficult or cumbersome to respond to. Projective methods which include such techniques as word association, sentence completion, thematic apperception, and ink-blot tests, usually tap the deep-seated motivations of the respondent and provide relevant answers to difficult questions. However, the responses have to be analyzed by individuals well trained in interpreting the answers, if they are to be meaningfully utilized for research purposes.

Marketing research can benefit substantially by using projective techniques, as for example, in developing products, designing ads, and selecting appropriate media.

6. How has the advancement of technology helped data gathering?

Laptops, Ipads, Iphones and the like used in field interviews are very useful for collecting and recording information from many individuals.

The recorded information can be checked for accuracy the same day.

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Research Methods for Business Electronic surveys by way of interviews or questionnaires, have the advantage of self correction in data, in the sense that out of range responses etc., are automatically corrected on the spot, and skip patterns can be conveniently applied (e.g. if answer is no to question # 5, proceed to question # 19).

The only drawback is that people might ignore and not respond to electronic surveys, and some may not have the requisite facilities.

Exercise 7.1 Answers will vary.

Exercise 7.2 Design an interview schedule to assess the Intellectual capital as perceived by employees in an organization after identifying the dimensions and elements.

The dimensions of intellectual capital would primarily comprise, among other things, the following: The knowledge-base of the employees; Their know-how The patents owned by the organization; The secret formulas, etc., utilized by the company (special formulas / manufacturing process, and the like).

The extent to which the company has an edge over others in terms of specialized knowledge and skills.

The Unstructured Interview Schedule would basically ask for the employees’ ideas as to what the term means and what they consider are the essentials of intellectual capital.

The Structured Interview Schedule will be on the following lines: 1. Department: 2. Nature of job: 3. Age: .

Research Methods for Business 4. Designation: 5. To what extent do you think your organization depends on the knowledge of operations of workers for its success?

6. To what extent do you think the success of this organization is due to the specialized knowledge and skills possessed by employees?

7. Should some of the employees leave this organization, how difficult will it be to recruit others with the same or similar knowledge?

8. To what extent is the know-how relating to certain operations confined to particular individuals who alone know how to do their job?

9. How many patents have been owned by your company in the last 5 years?

10. To what extent would you say your company has far more valuable patents than your competitors in the industry?

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Research Methods for Business

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Research Methods for Business

CHAPTER 8 DATA COLLECTION METHODS: OBSERVATION

Instructional Goals 1. To introduce students to different methods of data collection; 2. To offer an idea of when data collection via observation would be appropriate during different stages of research; 3. To develop observation skills in students.

Discussion Questions 1.

Describe the key purpose of observation.

To collect data on actions and behavior 2.

Discuss four dimensions that distinguish various approaches to observation.

The four dimensions that distinguish various approaches to observation are discussed on page 131-134.

3.

Under which circumstances would you prefer observation as a method to collect data over other methods of data collection such as interviews and questionnaires?

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Research Methods for Business The answer to this question is closely related to the advantages of observation. One of the main advantages of observation is its directness. Whereas interviews and questionnaires elicit verbal responses about actions and behavior from the subjects (which merely allows behavior to be inferred from these verbal responses), observation allows the researcher to gather behavioral data without asking questions. People can be observed in their natural work environment or in the lab setting, and their activities and behaviors or other items of interest can be noted, recorded, analyzed, and interpreted.

Apart from the activities performed by the individuals under study, their movements, work habits, the statements made and meetings conducted by them, other – environmental -- factors such as layout, work-flow patterns, the closeness of the seating arrangement, and the like, can also be noted. In observational studies, it is also relatively easy to discern situational factors such as the weather (hot, cold, rainy), the day of the week (midweek as opposed to Monday or Friday), and other factors that might have a bearing on, for example, productivity, the sales of a product, traffic patterns, absenteeism, and the like. These factors can be recorded and meaningful patterns might emerge from this type of data.

Another advantage of observation is that is possible to observe certain groups or individuals -- for example, very young children and extremely busy executives -- from whom it may be otherwise difficult to obtain information. Children can be observed to investigate their interests and attention span with various stimuli, such as their involvement with different toys. Such observation would help toy manufacturers, child educators, day-care administrators, and others deeply involved in or responsible for children’s development, to design and model ideas based on children’s interests, which are more easily observed than traced in any other manner. The data obtained through observation of events as they normally occur are generally more reliable and free from respondent bias.

4.

How does participant observation differ from structured observation?

Observational studies can be of either the nonparticipant-observer or the participant-observer type. Both of these, again, can be either structured or unstructured.

5.

Discuss how ethnography and participant observation are related.

Box 8.1 (page 131-132) may be used as a basis for this discussion.

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Research Methods for Business 6.

How does moderate participation differ from complete participation?

Moderate participation occurs when the researcher does not actively participate and only occasionally interacts with the social group under study.

7.

Although participant observation combines the processes of participation and observation it should be distinguished from both pure observation and pure participation. Explain.

Pure observation seeks to remove the researcher from the observed actions and behavior; the researcher is never directly involved in the actions and behavior of the group under study. Pure participation has been described as “going native”; the researcher becomes so involved with the group under study that eventually every objectivity and research interest is lost.

8.

What is rapport and how is rapport established in participant observation?

Establishing rapport involves establishing a trusting relationship with the social group under study, by showing respect, being truthful, and showing commitment to the wellbeing of the group or the individual members of the group, so that they feel secure in sharing (sensitive) information with the researcher. The degree to which rapport is established influences the degree to which the information that is collected in participant observation is accurate and dependable. In a similar vein, rapport has been referred to as “the only basis on which really reliable information can be obtained” (Villa Rojas, 1979, p. 59). Rapport is built over time. Hanging out with the subjects under study -- that is, meeting and chatting with them to develop relationships over an extended period of time -- is the process through which the researcher gains trust and establishes rapport with participants. Establishing rapport involves active listening, reciprocity (giving back something to the subjects under study), and confidentiality; the subjects must be assured that they can share personal and sensitive information without their identity being exposed to others.

9.

Field notes are often regarded as being simultaneously data and data analysis. Why?

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Research Methods for Business Field notes are a construction of the researcher; it is the researcher who decides what goes into the field notes, the level of detail to include, how much context to include, and so on. For this reason field notes are often regarded as being simultaneously data and data analysis, or as the first step in the process of data analysis.

10.

Is it possible to test hypotheses with structured observation? Why (not)?

Yes, it is possible to measure specific variables via observation and to test relationships between these variables.

11.

How does a simple checklist differ from a sequence record on time-scale?

A simple checklist provides information about how often a certain event has occurred. A sequence record allows the researcher to collect information on how often an event occurs and about the order in which the events occur.

12.

“One of the main advantages of observation is its directness.” Discuss.

Whereas interviews and questionnaires elicit verbal responses about actions and behavior from the subjects (which merely allows behavior to be inferred from these verbal responses), observation allows the researcher to gather behavioral data without asking questions. People can be observed in their natural work environment or in the lab setting, and their activities and behaviors or other items of interest can be noted, recorded, analyzed, and interpreted.

13.

What is reactivity?

Reactivity is the extent to which the observer affects the situation under study.

14.

A disadvantage of observation is observer bias. Discuss at least two ways of minimizing observer bias.

To minimize observer bias, observers are usually given training on how to observe and what to record. Good observational studies would also establish inter-observer reliability.

This could also be established during the training of the observers, when videotaped stimuli could be used to determine inter-observer reliability.

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Research Methods for Business 15.

Discuss the ethics of concealed observation.

Concealed observation raises ethical concerns since it may violate the principles of informed consent, privacy, and confidentiality. For this reason, concealed observation may harm the subjects in several ways.

Answers will vary. There are no strict rules for assessing the ethicality of concealed observational research. Instead, a careful, well-judged assessment of the potential harmful consequences of concealed observational research should be made by the researcher. Frederichs and Ludtke (1975, p. 12) provide an elegant guideline for such an assessment: the research plan “should be able to justify itself to the members of the scientific community as well as to those involved in the study.

Exercise 8.1 You are investigating the service quality of restaurants. You are collecting primary data through interviews and observation. Your task is to go to a restaurant and collect descriptive observational data on the following factors: space (layout of the physical setting), objects (physical elements such as equipment, tables, chairs, and the like), actors (staff and clients), and interactions between staff members and clients.

Answers will vary.

Exercise 8.2 Seek permission from a professor to sit in two sessions of his or her class, and do an unstructured, nonparticipant-observer study. Give your conclusions on the data, and include in the short report your observation sheets and tabulations.

Answers will vary.

Exercise 8.3 .

Research Methods for Business Read all relevant information regarding Thomas Perks’ study. From this information, develop a coding scheme to test the effect of GDA labels on the consumption of candy bars (chocolate bars). Do not forget to include categories allowing you to collect data on relevant covariates.

Answers will vary.

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Research Methods for Business

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Research Methods for Business

CHAPTER 9 DATA COLLECTION METHODS: QUESTIONNAIRES

Instructional Goals 1. To introduce students to different methods of data collection including observational surveys, electronic surveys, and collecting information from unobtrusive sources; 2. To emphasize the advantages of obtaining data via questionnaires.

3. To develop skills to design questionnaires in students;

Discussion Questions 1. Discuss the advantages and disadvantages of personally administered, questionnaires, mail questionnaires, and electronic questionnaires.

Table 9.1 (p. 148) provides an overview of the advantages and disadvantages of personally administered, questionnaires, mail questionnaires, and electronic questionnaires.

2. Explain the principles of wording, stating how these are important in questionnaire design, citing examples not in the book. a.

The wording of the question and the level of sophistication of the language used are important. These are important because, if the respondent does not understand the words, obviously, he or she is not going to be able to respond to the questions. An underground coal miner and a top business executive may need to be asked some of the same issues differently. Thus, using words that fit the level of sophistication of understanding of the respondent is necessary. To take an extreme example, to assess the experienced quality of family life, a poorly educated farm hand may be first asked to list

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Research Methods for Business the activities he normally engages in when he gets home from work, and then asked to rate the extent of satisfaction gained from each of these activities. An index of quality of family life might then be calculated by examining the family-related activities listed by the respondent. With a business executive, on the other hand, the same concept can be tapped by asking the individual to rate his or her satisfaction to questions such as: Balance between work and family life; the impact of travelling on experiencing quality time with the family, and the like. b.

Both positively and negatively worded questions need to be asked in the questionnaire so that the respondent does not mechanically answer the items without much mental engagement. For example, if one question asks for the level of excitement that a particular advertisement evoked, another could ask the extent to which that same advertisement seemed irrelevant. Obviously, when both are tapped on the same scale, the response to both cannot be the same. This break in the way the questions are worded both positively and negatively, helps to enhance the attention span of the respondents who might otherwise respond mechanically. c.

Double barreled questions should be avoided. If one asks the question, “Do you value and manage a diverse workforce well”?, there may be no clear response given to the question because one may value a diverse workforce, but hardly know how to manage it! In such cases, it would be better to ask two separate questions rather than one. d.

Ambiguous questions should also be avoided. Questions such as “Do you discuss your work with the president regularly”? or “Do you go to the movies frequently”? are ambiguous, because the terms regularly and frequently are left open to the interpretation of each respondent. One individual might discuss work with the president on a daily basis, and another every six months. Both are “regularly” (or at regular intervals) discussing work! But is this what the researcher is looking for? Similarly, frequently going to the movies might mean one movie every week to one person, one movie every month to another, and three times a week to a third person! Since these terms are not defined, biased data will be procured from the respondents. e.

Recall dependent questions will also introduce biases. For example, not many people remember when exactly they started smoking, or why they quit a particular school and joined another when they were 10 years old. f.

Leading questions also result in biased responses because the interviewee might be led to believe that a particular type of answer is sought and might try to oblige the interviewer, even if the response is not what the individual believes to be true. An example of a leading question is: Don’t you think that more women should be promoted to decision-making line positions in organizations? Such a question is likely to elicit the obvious response, “Surely, Yes”!

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Research Methods for Business g.

Loaded questions should also be avoided because of the emotionality it invokes, thus eliciting biased responses. As an example: “Don’t you think that the L.A.P.D. is biased against blacks?” is a question with racial overtones which will bring forth emotional, rather than objective responses to the question. h.

Questions invoking social desirability will also produce biased responses. An example would be to ask if anyone felt that workforce diversity is bad for the system. In the context of the changing demographics of the workforce, even if some felt that diversity at the workplace is disastrous, they would tend not to disagree because it is not a socially acceptable response. i.

It is also important to avoid lengthy questions which might confuse the respondent and introduce several types of biases. An example of a long question is: To what extent would asking for responses from different groups of employees, such as for instance, production, marketing, R & D, advertising, and sales, on such issues as the policy governing the organization, the organizational culture, staff discipline and other related matters, provide valid data to the president, to enable him to make some critical decisions on how to run the company effectively and efficiently?

3. How are multiple methods of data collection and from multiple sources related to reliability and validity of the measures?

If there is convergence or strong correlation among the data obtained from different data collection methods on the same variable, then one can establish convergent validity because the data converge even when collected by different methods. The same holds true when there is a strong and significant correlation between the data obtained on the same variable from different sources. Though reliability cannot be directly assessed from multi-methods or multi-sources of data collection, usually, since a valid instrument is reliable (though the converse may not necessarily be true), one can presume reliability if validity is established through the multi-trait, multi-matrix method.

4. Every data-collection method has its own built-in biases. Therefore, resorting to multi-methods of data collection is only going to compound the biases. Critique this statement.

It is true that most data collection methods in the social sciences have their own built-in biases. For instance, interviews are susceptible to interviewer and respondent biases, observational data will have observer and actor biases, and so on. But when data are collected through multiple methods and compared, if the correlations among the several types of responses received through the different data collection methods are high, we can be fairly confident that the data have good validity and reliability – i.e. they are “good.” If the correlations are low, however, we would start wondering about the

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Research Methods for Business goodness of our data. We would then pay closer attention to the methods used. For instance, if respondents say that they experience a high level of meaningfulness in their jobs when they are interviewed, and when the concept is measured through several items in the questionnaire, we would be inclined to treat these as acceptable data even though both may have a low correlation to data obtained from a sentence completion motivational research. If, however, there is no correlation at all among any of the methods, the goodness of the data collected will be highly suspect.

Thus, multi-methods of data collection help us to make certain judgments about the goodness of our data and serves to make decisions on which sets of data may perhaps be more acceptable than others.

5. One way to deal with discrepancies found in the data obtained from multiple sources is to average the figures and take the mean as the value on the variable.

What is your reaction to this?

Wherever possible “objective” data through unobtrusive methods, need to be obtained.

For instance, if employees’ performance is to be measured, it is better to go through the person’s records and evaluation forms of the superiors (in case more objective measures of output are not available). However, such records are usually confidential in nature and are not likely to be made accessible to the researcher. Hence data will be sought from multiple sources–for example, from the subject, the co-workers, the immediate supervisor, other superiors, and perhaps even the subordinates. If there is not much consistency in the data obtained through these various sources, there is no option left but to average these. However, the researcher should point out the biases inherent in this and acknowledge this limitation in the report.

6. How has the advancement of technology helped data gathering via questionnaires?

Electronic surveys by way of interviews or questionnaires, have the advantage of self correction in data, in the sense that out of range responses etc., are automatically corrected on the spot, and skip patterns can be conveniently applied (e.g. if answer is no to question # 5, proceed to question # 19).

The only drawback is that people might ignore and not respond to electronic surveys, and some may not have the requisite facilities.

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Research Methods for Business

Exercises Exercise 9.1 a.

The wording of the question and the level of sophistication of the language used are important. These are important because, if the respondent does not understand the words, obviously, he or she is not going to be able to respond to the questions. An underground coal miner and a top business executive may need to be asked some of the same issues differently. Thus, using words that fit the level of sophistication of understanding of the respondent is necessary.

Problematic are: OBS is reliable?

OBS is innovative?

These questions are also ambiguous because different participants may interpret the questions in a different way. b.

Both positively and negatively worded questions need to be asked in the questionnaire so that the respondent does not mechanically answer the items without much mental engagement. For example, if one question asks for the level of excitement that a particular advertisement evoked, another could ask the extent to which that same advertisement seemed irrelevant. Obviously, when both are tapped on the same scale, the response to both cannot be the same. This break in the way the questions are worded both positively and negatively, helps to enhance the attention span of the respondents who might otherwise respond mechanically.

David has not used any negatively worded questions. c.

Double barreled questions should be avoided. If one asks the question, “Do you value and manage a diverse workforce well”?, there may be no clear response given to the question because one may value a diverse workforce, but hardly know how to manage it! In such cases, it would be better to ask two separate questions rather than one.

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Research Methods for Business David uses two double-barreled questions: “Employees of OBS are helpful and friendly” and “OBS fully informs you about the products and services it provides within your organization and about everything else you may want to learn from OBS or its employees”. d.

Ambiguous questions should also be avoided. Questions such as “Do you discuss your work with the president regularly”? or “Do you go to the movies frequently”? are ambiguous, because the terms regularly and frequently are left open to the interpretation of each respondent.

OBS is reliable?

OBS is innovative? e.

Recall dependent questions will also introduce biases. For example, not many people remember when exactly they started smoking, or why they quit a particular school and joined another when they were 10 years old.

Not a problem here. f.

Leading questions also result in biased responses because the interviewee might be led to believe that a particular type of answer is sought and might try to oblige the interviewer, even if the response is not what the individual believes to be true. An example of a leading question is: Don’t you think that more women should be promoted to decision-making line positions in organizations? Such a question is likely to elicit the obvious response, “Surely, Yes”!

Not a problem here. g.

Loaded questions should also be avoided because of the emotionality it invokes, thus eliciting biased responses. As an example: “Don’t you think that the L.A.P.D. is biased against blacks?” is a question with racial overtones which will bring forth emotional, rather than objective responses to the question.

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Research Methods for Business Not a problem here. h.

Questions invoking social desirability will also produce biased responses. An example would be to ask if anyone felt that workforce diversity is bad for the system. In the context of the changing demographics of the workforce, even if some felt that diversity at the workplace is disastrous, they would tend not to disagree because it is not a socially acceptable response.

Not a problem here. i.

It is also important to avoid lengthy questions which might confuse the respondent and introduce several types of biases. An example of a long question is: To what extent would asking for responses from different groups of employees, such as for instance, production, marketing, R & D, advertising, and sales, on such issues as the policy governing the organization, the organizational culture, staff discipline and other related matters, provide valid data to the president, to enable him to make some critical decisions on how to run the company effectively and efficiently?

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Research Methods for Business Not a problem here.

The classification data: also important may be: -

How long is person working for organization?

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How long in current position?

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Much experience with OBS?

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When was the last time person has done business with OBS

- And so on.

Exercise 9.2 A production manager wants to assess the reactions of the blue-collar workers in his department (including foremen) to the introduction of computer-integrated manufacturing (CIM) systems. He is particularly interested to know how they would perceive the effects of CIM on: a. their future jobs b. additional training that they will have to receive c. future job advancement.

Design a questionnaire for the production manager.

Questionnaire Cria Software Enterprises 4571 Southwood Ave Cupertino, California 94024 Date Dear Employee, As we had discussed in our meetings, Computer Integrated Manufacturing (CIM) will form a part of our operations in the future. We would like to know how

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Research Methods for Business you visualize certain aspects of the future environment as we introduce the changes. Please take a few minutes to complete this short questionnaire and return it to the locked box with the slit on the top, in the front office. Thank you for responding within the next five days. sd George Coelho Production Manager 1. Personal Information (place a mark on the appropriate box) JOB STATUS

NUMBER OF YEARS WORKED IN THE DEPARTMENT □ Less than 1 □ 1-2 □ 3-5 □ 5-10 □ Over 10 years

□ Machinist □ Fitter □ Loader □ Inspector □ Foreman □ Surveyor □ Other

SHIFT CURRENTLY WORKING IN

□ □ □

Day Evening Night

2. Your Opinions regarding the following.

Please circle the appropriate number for each of the following items using the scale below.

STRONGLY AGREE 1

AGREE 2

NEITHER AGREE NOR DISAGREE

1. I will need additional training to work in the changed environment.

2. The new system will offer me better opportunities for advancement.

3. The opportunities for training will have to be enhanced with CIM.

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DISAGREE STRONGLY 4 DISAGREE 5

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3 2

3

4

5

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2

3

4

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Research Methods for Business 4. I am not sure if CIM will need all the people we now have in this department.

5. I feel that most of us may not have better opportunities for future promotions in the new manufacturing environment.

6. Most of us will need special training to work with CIM. 7. I am sure the future looks bright for most of us here.

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Items 4 and 7 measure opinion about their future jobs 1, 3, and 6 measure perceived training needs 2 and 5 measure job advancement

Exercise 9.3 Answers may vary. The questionnaire should include valid and reliable scales measuring service quality, customer satisfaction, and customer loyalty.

Additional Exercises in Questionnaire Design Two simple exercises on Questionnaire Design follow, and these can be used for class discussion after the students have individually worked on them as homework assignments. Different students can then be asked to write on the chalk board different parts of the questionnaire–for example, the introduction, instructions to respondents, measures for different concepts with scaling, and the end part of the questionnaire. The class as a whole can then critique the exercise on the board. See also Exercises 10.1 to 10.5 in the Book. These can also be used for class discussions including discussions on possible ways of establishing reliability and validity for the measures.

1. The Marketing Director of a pharmaceutical company wants to examine the effects of number of sales personnel, population density, the average sales calls made to the doctors in the region, and the average monthly sales calls made on the chemists in the region, on the sales of the pharmaceutical products of the company. She has six particular regions in mind. Design a questionnaire to do the study. Also discuss what sources of data you will gather information from.

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Research Methods for Business Population density can be had directly from the Census Bureau’s Directory.

All the other information should be readily available from the Regional Sales Headquarter Records, or from the local offices. If necessary, a simple questionnaire asking direct questions of the Regional Director to tap the variables could be used.

2. An R&D Project Manager wants to elicit the reactions of the machine operators in the Production Department to three different types of machines currently in use – Type A, Type B, and Type C. If he knows how the machinists experience these three types in terms of ease of handling, sturdiness, flexibility for different adaptations, and maintenance, he would be able to decide whether or not to develop a new prototype he has in mind. Design a questionnaire for the purpose.

This is also a relatively simple questionnaire that will be administered to the machinists, asking for their views on the three types of machines, aiming the questions to particular aspects of ease of handling, sturdiness, flexibility for different adaptations, and maintenance.

Next to Chapter 3, this Chapter is perhaps the one which would demand more in-class exercises and discussions to ensure that students have understood and can incorporate the learnings into their research project work. When the group puts together a draft of the questionnaire for administering it to the organization when they do their class project, the instructor can play a key role in offering constructive criticisms and suggestions, and all in all, help students to understand how to design reasonably good questionnaires.

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Research Methods for Business

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Research Methods for Business

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Research Methods for Business

CHAPTER 10 EXPERIMENTAL DESIGNS Instructional Goals 1. To offer students knowledge about what experimental designs are, and why, how, and when they are used.

2. To pinpoint the differences among causation, covariation, and mutual causation, with examples, as the one below.

Causation refers to one variable A, causing another variable B to occur or to change. As an example, the pollution of the burning oil wells in Kuwait caused a lot of breathing difficulties for the Kuwaiti children.

Covariation refers to one variable A, changing, as another variable B, also changes. For example, when the winds blow lightly toward the city, the Kuwaiti children1 s breathing difficulties are very low, but as the velocity of the wind increases (carrying with it increased spread of pollution), the breathing difficulties also increase. In other words, the velocity of wind and breathing difficulties vary together or covary.

Mutual causation occurs when variable A causes variable B to change, and variable B, in turn, also causes variable A to change. For example, a high level of confidence is instrumental in achieving success, and success (experiences), in turn, is instrumental in enhancing individuals’ confidence level. The two mutually reinforce each other and the increase in one is instrumental in increasing the other.

3. To explain the terms manipulation, control, matching, and randomization with several examples.

4. To clarify the concepts of internal and external validity, the threats to each, and the trade-off between internal and external validity. Students should know that it is possible to ensure both types of validity by doing a lab experiment first and a field experiment next, should circumstances warrant this. .

Research Methods for Business 5. To familiarize students with some of the more commonly used experimental designs to trace cause and effect relationships, and the types of factors that would undermine or enhance internal validity in each of these designs.

6. To sensitize students to the ethical dilemmas, particularly as they relate to experimental designs.

7. To introduce to the more advanced students, other experimental designs as discussed in the Appendix to the book chapter.

Discussion Questions 1. What are the differences between causal and correlational studies?

Correlational studies are always conducted in the environment in which the events studied naturally occur, and there is very little researcher interference with the setting. In causal studies, however, there is much greater researcher influence, and lab experiments are always conducted in artificially created settings. All causal studies are longitudinal in nature, whereas most correlational studies are one-shot studies.

2. In what ways do Lab experiments differ from Field experiments?

Lab experiments are always conducted in contrived settings, whereas, field experiments are always conducted in the natural environment where the flow of events normally occur. Lab experiments are tightly controlled by either matching or randomly assigning members to the various groups. In field experiments, however, tight controls are not possible because people or events preexist and cannot be altered. Lab experiments offer greater internal validity but lower external validity, whereas field experiments offer more external validity and lesser internal validity.

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Research Methods for Business external validity, whereas field experiments offer more external validity and lesser internal validity.

3. Define the terms control and manipulation. Describe a possible Lab experiment where you would need to control a variable. Further, include a possible variable over which you would have no control, that could affect your experiment.

Manipulation refers to deliberate variations in the independent variable to test its effect on the dependent variable. Control refers to the efforts made to mitigate the contaminating effects of nuisance factors that might affect the internal validity of the experiment.

A Possible Lab Experiment with controllable and uncontrollable factors.

A pharmaceutical company wants to test the effects of incremental doses of AZT administered to AIDS patients, isolating them in a special hospital-type environment.

A possible factor to control, might be the age of the patient, since older people might react slower to certain chemicals. This nuisance factor can be controlled either by matching all three groups for age or by randomly assigning the members to the three groups. A possible uncontrollable factor could be a sudden flu epidemic which might kill many of these patients and make the testing of the effects of incremental doses of AZT impossible.

4. Explain the possible ways in which you can control “nuisance” variables.

Nuisance variables, if known, can be controlled by matching the members in all the groups for the contaminating (or nuisance) factors.

For example, if subjects’ level of experience would be a contaminating factor for a particular experiment, members of all groups could be so matched that, overall, all groups have members with the same experience level. An even better way of controlling for all possible nuisance factors is to assign the members randomly to the various groups. By doing this, all known and unknown contaminating factors will have a high probability of being equally distributed among all the groups. Thus, randomization is an effective way to control for known and unknown nuisance factors.

5. What is internal validity and what are the threats to internal .

Research Methods for Business validity?

Internal validity refers to the confidence that one can place in the cause and effect relationship. Internal validity is maximal in a welldesigned lab experiment where the possible contaminating factors are tightly controlled.

The threats to internal validity are the following possible contaminating factors: the effects of history, maturation, testing, instrumentation, selection, statistical regression, and mortality (explained in detail in the book).

6. Explain the concept of “trade-off1 between internal and external validity.

In lab experiments where the nuisance factors that are likely to contaminate the cause and effect relationships are tightly controlled, one can confidently say, if the results warrant the statement, that variable A causes variable B. However, because the contaminating factors are tightly controlled, one cannot be sure that this cause and effect relationship will be generalizable to (i.e. hold true in) the real-world business setting where several contaminating factors do exist. Thus, the generalizability of the cause and effect relationship found in the lab experiment is limited.

In the field experiment, on the other hand, where there is a manipulation of the independent variable but no tight controls, one is not sure that variable A and it alone causes B (since some other factors might also have an effect on B). However, any relationship found is likely to be generalizable to other similar business settings because, many of the possible contaminating factors have not been deliberately and artificially controlled.

Thus, lab experiments have high internal validity but low external validity or generalizability, but field experiments have high external validity but low internal validity. This is the trade-off between internal and external validity in the lab and field experiments.

7. Explain how the selection of participants may affect both the internal and external validity of your experiments.

Text in book: Another threat to both the internal and external validity of our findings is the selection of participants. First, .

Research Methods for Business we will discuss how selection may affect the external validity of our findings. Then, we will discuss how selection may affect the internal validity.

In a lab setting, the types of participants selected for the experiment could be very different from the types of employees recruited by organizations. For example, students in a university might be allotted a task that could be manipulated to study the effects on their performance. The findings from this experiment cannot be generalized, however, to the real world of work, where the employees and the nature of the jobs would both be quite different. Thus, subject selection would pose a threat to external validity.

The threat to internal validity could come from improper or unmatched selection of subjects for the experimental and control groups. For example, if a lab experiment is set up to assess the impact of working environment on employees’ attitudes toward work, and if one of the experimental conditions is to have a group of subjects work for about 2 hours in a room with some mild stench, an ethical researcher might disclose this condition to prospective subjects, who may decline participation in the study. However, some volunteers might be lured through incentives (say a payment of $70 for the 2 hours of participation in the study). The volunteers so selected may be quite different from the others (inasmuch as they may come from an environment of deprivation) and their responses to the treatment might be quite different.

Such bias in the selection of the subjects might contaminate the cause-and-effect relationships and pose a threat to internal validity as well. Hence, newcomers, volunteers, and others who cannot be matched with the control groups would pose a threat to internal validity in certain types of experiments. For this reason, randomization or matching groups is highly recommended.

8. Explain the difference between main and interactive testing effects. Why is this difference important?

Frequently, to test the effects of a treatment, subjects are given what is called a pretest. That is, first a measure of the dependent variable is taken (the pretest), then the treatment is given, and after that a second measure of the dependent variable is taken (the posttest). The difference between the posttest and the pretest scores is then attributed to the treatment. However, the exposure of participants to the pretest may affect both the internal and external validity of the findings. Indeed, the afore-mentioned process may lead to two types of testing effects.

A main testing effect occurs when the prior observation (the pretest) affects the later observation (the posttest). Main testing effects typically occur because participants want to be consistent. Let us assume that we have tested the effect of a television commercial (the treatment) on attitudes towards the brand using a pretest and a posttest. Suppose that no significant difference in attitude towards the brand was found. This finding could lead to the conclusion that the commercial was ineffective. However, an alternative explanation is that our participants tried to be consistent and answered the later questions so that their answers were similar to the answers they gave the first time. The pretest may thus have affected the results of the experiment. Along these lines, main testing effects are another threat to internal validity.

Interactive testing effects occur when the pretest affects the participant’s reaction to the treatment (the independent variable). Again, let’s assume that we are testing the effect of a television commercial on attitude towards the brand using a pretest and a posttest. It is possible that because of the pretest the participants watch the television commercial more closely than consumers that do not take part in the experiment. For this reason, any effects that are found may not necessarily be generalizable to the population. Hence, interactive treatment effects are a threat to the external validity of an experiment.

In sum, testing effects may affect both the internal and external validity of our findings. The difference between main and interactive testing effects is important because main testing effects threaten the internal validity, whereas interactive testing effects threaten the external validity of an experiment.

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Research Methods for Business 9. History is a key problem in a time series design. “Other problems are main and interactive testing effects, mortality, and maturation.” Explain.

A main testing effect occurs when the prior observation affects the later observation. Main testing effects typically occur because participants want to be consistent. Interactive testing effects occur when the prior observations affect the participant’s reaction to the treatment (the independent variable).

Maturation: Cause-and-effect inferences can also be contaminated by the effects of the passage of time—another uncontrollable variable. Such contamination is called maturation effects. The maturation effects are a function of the processes—both biological and psychological—operating within the respondents as a result of the passage of time. Examples of maturation processes could include growing older, getting tired, feeling hungry, and getting bored.

Mortality (the dropout of individuals from groups) is a problem for all experimental designs, including this one.

10. Explain why mortality remains a problem even when a Solomon four-group design is used.

Solomon Four-Group Design: One experimental group and one control group can be given both the pretest and the posttest. The other two groups will be given only the posttest. Here the effects of the treatment can be calculated in several different ways. To the extent that we come up with almost the same results in each of the different calculations, we can attribute the effects to the treatment. This increases the internal validity of the results of the experimental design. This design, known as the Solomon four-group design, is perhaps the most comprehensive and the one with the least number of problems with internal validity.

However, mortality (the loss of participants during the course of the experiment) is possible in the pretest-posttest conditions.

11. If a control group is a part of an experimental design, one need not worry about controlling for other exogeneous variables. Discuss this statement.

All groups, including the control group have to be matched for all the exogeneous factors that could contaminate the cause and effect relationships. In other words, the contaminating factors need to be spread equally among all the groups – both experimental and control groups – so that the effects of manipulating the independent variable on the dependent variable can be assessed without any doubt as to whether other covarying factors were responsible for accounting for the results found. The controlled exogeneous variables can be distributed among all the groups through either deliberately matching the groups with respect to these factors, or simply by randomly assigning members to the groups. Thus, controlling for exogeneous variables through a process of matching or by randomly assigning members is a must in good experimental designs, even when control groups are part of the

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Research Methods for Business design.

12. The Solomon Four Group Design is the answer to all our research questions pertaining to cause and effect relationships because it guards against all the threats to internal validity. Comment.

The Solomon Four Group Design is probably the best experimental design that would reduce many of the threats to internal validity.

Though the history, maturation, and testing effects are avoided in this design, and the selection and statistical regression effects can also be minimized through the process of randomization, instrumentation effects might still pose a threat to internal validity unless it is carefully guarded against (especially in cases where posttest evaluations are done by different people, etc.). Mortality effects are also a problem, if the experiment is carried over a long period of time. Thus, the Solomon Four Group Design also faces some threats to internal validity.

13. Below is an adapted note from Business Week published some time ago. After reading it, apply what you have learned in this chapter, and design a study after sketching the theoretical framework.

The Vital Role of Self-Esteem Why do some people earn more than others? Economists focused on the importance of education, basic skills, and work experience - what they called human capital - on increased productivity, and said these were reflected in greater earning power. Researchers also found that self-esteem was instrumental in acquiring human capital.

It would seem that self-esteem causes the three components of human capital to emerge and develop. Once developed, human capital would be correlated to productivity, for which earnings would be a surrogate measure.

The theoretical framework for this can be depicted as per the following diagram: This study can be done in two ways. One, as a correlational field study, obtaining data on each of the five variables above, and doing a path analysis. This will trace the cause and effect relationship between self-esteem and human capital, and between human capital and earnings (productivity). This is the easiest way to trace the causal connection between self-esteem and human capital. A second way to conduct the study is to first see if the three components of human capital are

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Research Methods for Business indeed correlated to earnings from which an index of human capital can then be developed based on the predictive power of each of the three variables.

A Lab study can then be conducted recruiting College students to perform a task. An index of human capital (HC) would be first developed by giving appropriate weightage to the three factors of education, skills, and work experience.

The causal effects of self-esteem on human capital can be tested by randomly assigning individuals to four groups and manipulating the self-esteem of individuals. This can be done by praising the intelligence of one group and telling them that the task at hand would be child’s play for them; telling the second group, that they may have some, but not all the necessary talent to do the task at hand well; telling the third group that they may not have what it takes to accomplish the task at hand; and saying nothing to the fourth group.

A pretest (before manipulating self-esteem) of the components of HC can be obtained from all groups. The task to be done can then be explained to all four groups, and just before the task is given , all the subjects can be asked to respond to a short questionnaire eliciting how prepared they feel for the task in terms of their background education, skills, and previous work experience to accomplish the task. If the differences are found in HC among the groups, then a causal relationship can be established. In other words, if the HC is felt to be the greatest in Group 1, a little less in group 2, worse than before in group 3, with no change in group 4, then the causal connection can be determined.

As a matter of interest, a similar questionnaire can be administered a third time after the task is completed, to see if there are changes in the reported HC. An organization would like to introduce one of two types of new manufacturing processes to increase the productivity of workers, and both involve heavy investment in expensive technology. The company wants to test the efficacy of each process in one of its small plants.

In the plant where the efficacy of the processes is desired to be tested, the two types of machines can be leased for about six months. Then, three comparable production groups can be formed, the first two to test the efficacy of the two different machines, and the third as a control group.

The productivity of all three groups can be measured before the introduction of the new machines and six months after the machines are installed.

It is expected that the productivity of the two experimental groups would be more

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Research Methods for Business than that of the control group. If so, the group with more productivity can be attributed to the machine used by it.

To ensure that this is correct, a similar field experiment can also be set up at another plant to see if similar results emerge.

14. Design a study to examine the following situation.

An organization would like to introduce one of two types of new manufacturing processes to increase the productivity of workers, and both involve heavy investment in expensive technology.

The company wants to test the efficacy of each process in one of its small plants.

Answers will vary

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Research Methods for Business

CHAPTER 11 MEASUREMENT OF VARIABLES: OPERATIONAL DEFINITION Instructional Goals 1. To pinpoint the need to operationally define variables.

2. To highlight the importance of identifying the dimensions, and later during discussions of content validity, to reconnect the dimensions of a concept to the establishment of its content validity.

Discussion Questions 1. Define measurement.

Measurement is the assignment of numbers or other symbols to attributes of objects according to prespecified rules.

2. Explain why it is impossible to measure an object.

You cannot measure a person, you measure attributes of that person such as for instance his or her weight, height, shoe size, arousal seeking tendency, loyalty proneness, job satisfaction et cetera.

3. Provide relevant measurable attributes for the following objects. a. Restaurant: e.g., atmosphere, food quality, responsiveness of employees, location. b. Business person: e.g., job satisfaction, job loyalty, career success, income. c. Consumer: e.g., price consciousness, shopping enjoyment, attitutude toward internet shopping, impulsiveness. d. Tennis racket: e.g., brand image, price, product quality.

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Research Methods for Business e. Strategic business unit: e.g., sales, market share, organizational effectiveness, ROI, market orientation.

4. Why is it wrong to use correlates of a concept to measure that concept?

Because if we use the correlates of a concept to measure it, we do not measure the right thing. Instead of measuring the concept that we want to measure we will measure variables we do not intend to measure nor were we are interested in.

5. What is meant by operational definition, when is it necessary, and why is it necessary?

Operational definition refers to the process of defining an abstract concept in such a manner that it can be measured. It is necessary because it allows us to measure subjective characteristics and phenomena which do not lend themselves to objective measurement.

6. Operationally define the following: a. Customer loyalty Airline example (Agustin and Singh 2005) •I would continue flying with this airline.

•The next time I need to air travel, I would fly with this airline.

•I would consider this airline my first choice to air travel.

•I would use the services of this airline in the next years.

b. Price consciousness Lichtenstein, Ridgway, and Netemeyer (1993) I tend to buy the lowest-priced brand of (category) that will fit my needs.

When buying a brand of (category), I look for the cheapest brand available.

When it comes to buying (category), I rely heavily on price.

Price is the most important factor when I am choosing a brand of (category). c. Career success

Career Success could be either objective (as judged by the profession), or subjective (as judged by oneself).

Objective career success is usually defined in terms of the prestige of the position and status one holds, and by one’s salary. Subjective career success is defined in terms of how one feels about where one aspired to be at that particular point in one’s career and where one actually is.

Some items to measure subjective career success are:

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Research Methods for Business To what extent do you feel you have: i.

Achieved whatever you had hoped to achieve at this stage in your career

ii.

Accomplished the kinds of goals you had set for yourself

iii.

Compared to others of similar background, made progress in your career

7. Is it useful to draw on existing measures to measure abstract and subjective constructs such as for instance customer loyalty? Why (not)?

The use of existing measurement scales has several advantages. First, it will save you a lot of time and energy. Second, it allows you to verify the findings of others and to build on the work of others (this is very important in scientific research but impossible if you would use measures that differ from the measures that our predecessors have used!).

Hence, if you want to measure something, see if it has been measured before and then use this measure (adapt it to your specific needs whenever this is needed).

Exercises Exercise 11.1 Identify the object and the attribute. Give your informed opinion about who would be an adequate judge. a.

Price consciousness of car buyers. Judge: car buyer

b.

Self-esteem of dyslexic children. Judge: psychologist

c.

Organizational commitment of school teachers. Judge: school teacher.

d.

Marketing orientation of companies. Judge: researcher, consultant.

e.

Product quality of tablets (such as the Apple iPad and the Samsung Galaxy Tab). Judge: consumer, computer expert.

Exercise 11.2

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Research Methods for Business a. Read the paper of Cacioppo and Petty (1982) and describe how the authors generated the pool of 45 scale items that appeared relevant to need for cognition.

You can find the paper on John Cacioppo’s website: http://psychology.uchicago.edu/people/faculty/cacioppo/jtcreprints/cp82c.pdf Students should provide a detailed account of the four studies that were undertaken to develop the need for cognition scale. Specific goals of these studies have to be discussed and a detailed account of the method and procedure should be provided per study. You can organize a discussion on why (these or all) four studies are needed. b. Why do we need 34 items to measure “need for cognition”? Why do three or four items not suffice?

Because this ensures that the measure includes an adequate and representative set of items that tap the concept “need for cognition” (= content validity).

Exercise 11.3 Try to come up with two unidimensional and two multidimensional abstract concepts. Explain why these concepts have either one or more than one dimension.

Answers will vary: Examples of multidimensional scales: -

service quality (dimensions: responsiveness, reliability, assurance, empathy, and tangibles)

-

store loyalty (dimensions: cognitive, affective, and conative loyalty)

-

power bases (dimensions: reward power, coercive power, legitimate power, referent power, and expert power)

Examples of unidimensional scales:

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-

anger

-

price perception

-

endorser attractiveness

-

buying intention

Research Methods for Business

Exercise 11.4 Provide an operational definition of the concept of service quality and develop questions that would measure service quality.

Answers will vary.

Exercise 11.5 Compare your service quality measure to the measure of Zeithaml, Parasuraman, and Berry (1988) presented in Journal of Retailing. a. How does your measure differ from this measure in terms of dimensions and elements?

Service quality: the consumer’s overall impression of the relative inferiority/ superiority of the organization and its services (Bitner and Hubert, 1994).

Zeithaml, Parasuraman, and Berry (1988) have operationalized service quality by assessing service and performance on 22 items believed to represent five key dimensions (reliability, responsiveness, assurance, empathy, and tangibles) of service quality (you can find the paper on Valerie Zeithaml’s webpage: http://areas.kenan-flagler.unc.edu/Marketing/FacultyStaff/zeithaml/Selected%20Publications/Forms/AllItems.aspx.

Reliability items: 1. When XYZ Company promises to do something by a certain time, it does so.

2. When you have a problem, XYZ Company shows a sincere interest in solving it.

3. XYZ Company performs the service right the first time.

4. XYZ Company provides its services at the time it promises to do so.

5. XYZ Company keeps customers informed about when services will be performed.

Responsiveness items: 1. Employees in XYZ Company give you prompt service.

2. Employees in XYZ Company are always willing to help you.

3. Employees in XYZ Company are never too busy to respond to your request.

Assurance items: 1. The behavior of employees in XYZ Company instills confidence in you.

2. You feel safe in your transactions with XYZ Company.

3. Employees in XYZ Company are consistently courteous with you.

4. Employees in XYZ Company have the knowledge to answer your questions.

Empathy items: 1. XYZ Company gives you individual attention.

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Research Methods for Business 2. XYZ Company has employees who give you individual attention. 1 3. XYZ Company has your best interests at heart.

4. Employees of XYZ Company understand your specific needs. 1 Tangibles items: 1. XYZ Company has modern-looking equipment.

2. XYZ Company's physical facilities are visually appealing.

3. XYZ Company's employees appear neat.

4. Materials associated with the service (such as pamphlets or statements) are visually appealing at XYZ Company.

5. XYZ Company has convenient business hours.

b. Would you prefer using your own measure or the measure of Zeithaml, Parasuraman, and Berry? Why? The use of existing measurement scales (in these case the Zeithaml, Berry, and Parasuraman scale) has several advantages. First, it will save you a lot of time and energy. Second, it allows you to verify the findings of others and to build on the work of others (this is very important in scientific research but impossible if you would use measures that differ from the measures that our predecessors have used!). Hence, if you want to measure something, see if it has been measured before and then use this measure (adapt it to your specific needs whenever this is needed).

Exercise 11.6 Find the paper “Consumer values orientation for materialism and its measurement: Scale development and validation,” written by Marsha Richins and Scott Dawson. a.

Provide an overview of the dimensions and elements of Richins and Dawson’s materialism scale .

Dimensions: acquisition centrality, acquisition as the pursuit of happiness, and possession-defined success Elements: Table 3 of Richins and Dawson’s paper provides an overview of the elements of the materialism scale.

b.

.

Use Bruner, Hensel, and James’ the Marketing Scales Handbook to find at least two other materialism scales. Compare the scales you have found with the Richins and Dawson scale.

Research Methods for Business Answers will vary.

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Research Methods for Business

In-Class Exercises Operational Definition Beyond the exercises in the book, you might want students to operationally define some other concepts to see if they have understood how to measure variables. A list of further concepts for use as in-class exercises is provided.

While discussing these exercises, many opportunities will present themselves, where, as earlier mentioned, students would define the correlates of a concept as its dimension. The more the in-class exercises, the greater will be the clarity provided to students.

Advertsing effectiveness Brand Loyalty Compensation scheme Competence Group support Intention to Turnover Job skills Life satisfaction Media Trust Mental health Organizational climate Police excesses Role ambiguity Role conflict Role overload Role stress Work ethic Work environment policies

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Research Methods for Business

CHAPTER 12 MEASUREMENT: SCALING, RELIABILITY, VALIDITY Instructional Goals 1. To start preparing students to think in terms of the power of the scales for increasing levels of sophistication in data analysis (elaborated in the next section).

2. To explain the different rating and ranking scales.

3. To help students understand how scaling techniques are applied, and how some of the rating scales are treated as Likert-type interval scales.

4. To stress the importance of establishing the goodness of measures.

5. To explain the different types of validity and reliability.

Discussion Questions 1. Describe the four types of scales.

The four scales are nominal, ordinal, interval, and ratio.

The nominal scale separates individuals or items into categories – e.g. seniors and juniors. The ordinal scale helps to rank order the separated items. The interval scale helps to determine the extent to which the items are different from each other. In other words, is the difference between item 1 and 2 the same as the difference between 4 and 5? The ratio scale helps to determine the proportion of differences among items since it has an absolute zero origin, and is the most powerful of the four scales.

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Research Methods for Business 2. How is the interval scale more sophisticated than the nominal and ordinal scales?

Whereas the nominal and ordinal scales group and rank the subjects, respectively, the interval scale, in addition, also indicates the magnitude of the differences. The distance between any two points on the interval scale is the same. If an individual prefers A to B, and another prefers C to D, we know that the difference in the magnitude of the preferences for both individuals is the same (if this is captured on an interval, rather than on an ordinal scale).

Because of the above reason, an interval scale lends itself to more sophisticated statistical analysis. The mean and standard deviation can be calculated for the variables tapped on an interval scale, which cannot be done for those on an ordinal scale.

3. Why is the ratio scale the most powerful of the four scales.

The ratio scale is the most powerful of the four scales, because it not only indicates the magnitude, but the proportion of the differences. Whereas an interval scale only indicates that the distance between any two points on the scale is the same, and any identical additions or subtractions will maintain the differences, the ratio scale, because of its true zero origin, also indicates the proportion of the differences. A person with IQ 150 is expected to be two times as intelligent as the one who has scored 75 on the IQ test. Any division or multiplication of the data by the same number, will still maintain this proportion. Because of this, the geometric mean and the coefficient of variation can be calculated.

4. Briefly describe the difference between attitude rating scales and ranking scales and indicate when the two are used.

As their names indicate, ranking scales rank the order of preferences, whereas, rating scales rate subjects on a continuum. Ranking scales are used with ordinal data, and rating scales with interval or ratio scaled data. While the latter lend themselves to sophisticated analyses, such as calculating the mean and standard deviation, the former lends itself only to less sophisticated, non-parametric statistical analyses.

Attitudinal scales are used for measuring nebulous subjective concepts (such as attraction and weariness) where states of mind, feelings, and impressions are tapped. Ranking scales are used to tap preferences among objects, such as preferences for types of nursing homes, schools, etc.

5. Why is it important to establish the “goodness” of measures and how is this done?

The goodness of measures indicates whether the scale we use are reliable and valid. In other words, they indicate to what extent we are accurately measuring the concept

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Research Methods for Business (reliability), and whether we are indeed measuring whatever we are supposed to measure (validity). If we are not measuring the intended concept accurately, then, our study will not yield the correct results.

Reliability is established by assessing the stability of the measure through test-retest reliability and parallel form reliability, and internal consistency of the measure through Cronbach’s alpha.

Validity is established through construct validity, criterion-related validity (concurrent and predictive), and congruent validity (convergent and discriminant).

6. Describe the difference between formative and reflective scales.

In a reflective scale, the items (all of them!) are expected to correlate. Unlike the items used in a formative scale, discussed next, each item in a reflective scale is assumed to share a common basis (the underlying construct of interest). Hence, an increase in the value of the construct would translate into an increase in the value for all the items representing the construct.

A formative scale is used when a construct (such as for instance job satisfaction) is viewed as an explanatory combination of its indicators (promotions, pay, satisfaction with supervision, coworkers, and work); that is, when a change in any one of the indicators (dimensions) is expected to change the score of the overall construct, regardless of the value of the other indicators (dimensions).

7. Explain why it does not make sense to assess the internal consistency of a formative scale.

While it makes sense to test the inter-item consistency of reflective scales, it does not make sense to test the inter-item consistency of formative scales. The reason is that we do not expect the items in a formative scale to be homogeneous; in other words we do not expect all the items to correlate. For this reason, tests of the consistency of respondents’ answers to the items of a formative measure do not tell us anything about the quality of our measuring instrument. Note that there are other methods to asses the goodness of formative scales (see for instance, Jarvis, MacKenzie, and Podsakoff, 2003).

8. “The job involvement measure described in the appendix is reflective in nature.” Comment on this statement.

Yes, each item in this scale is shares a common basis (the underlying construct of .

Research Methods for Business interest, in this case job involvement). Hence, an increase in the value of the construct would translate into an increase in the value for all the items representing the construct.

9. Construct a semantic differential scale to assess the properties of a particular brand of tea or coffee.

Semantic Differential Scale for Upton Tea Bags Fine Flavor 8 7 Smooth Brew 8 7 Good Taste 8 7 Lifts the spirit 8 7 Gives Energy 8 7

6

5

4

3

6

5

4

3

6

5

4

3

6

5

4

3

6

5

4

3

No Flavor 2 Thick Brew 2 Distasteful 2 Depresses 2 Debilitates 2

1 1 1 1 1

10. “Whenever possible, it is advisable to use instruments that have already been developed and repeatedly used in published studies rather than develop our own instruments for our studies”. Do you agree? Discuss the reasons for your answer.

It is always advisable to use well-validated instruments that have been repeatedly used in published studies, rather than going through the cumbersome process of developing one’s own instruments and laboriously establishing their validity and reliability. However, simply because an instrument is used in some published studies does not necessarily make it a good instrument. It is always x wise to examine the psychometric properties established for the instrument before using it. In case this is not easily available, a pilot study can be conducted to see if the measures have at least acceptable reliability.

11. “A valid instrument is always reliable, but a reliable instrument is not always valid”. Comment on this statement.

If an instrument is valid, especially in terms of content validity, we would expect to have a reliable instrument. However, an instrument can have both consistency and stability, but may not be measuring what it is intended to measure – i.e. have low validity.

However, if an instrument does measure the concept that it is supposed to measure, it will be reliable. Thus, a valid instrument will be reliable, but a reliable instrument need not necessarily be valid.

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Research Methods for Business

Exercises Exercise 12.1 Two variables that lend themselves to nominal scaling, along with mutually exclusive and collectively exhaustive categories, are as follows: Types of Employees in a Computer Firm □ Accounts clerk □ Machine operator □ Mechanic

□ Systems analyst □ Supervisor □ Manager □ Other (specify)

Types of Departments in a Research Laboratory □

Mathematics department

□

Physics department

□

Chemistry department D Statistics department

□

Computer sciences department

□

Operations research department

□

Other (specify)

Exercise 12.2 The following is an ordinal scale for consumer preferences for different brands of beer.

Rank the following brands of beer in the order of your preference. In the boxes provided next to each brand name, write the number that denotes your ranking.

That is, write 1 next to your favorite brand, 2 next to the next favorite one, and so on, until each brand name has a number. If you do not drink beer at all, put a check mark ( ) in the last box. □ Budweiser □ Coors □ Michelob

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□ Olympia □ Pabst □ Strohs

Research Methods for Business □ Miller

□ Do not drink beer at all

Exercise 12.3 One of them could be Satisfaction with Organizational Facilities provided.

To what extent are you satisfied with the following facilities provided by your organization? Please circle the appropriate response for each item, using the scale indicated below.

Very Satisfied 1

1. With the vacation 2. Time off for emergencies 3. Flexible work hours 4. Career counseling 5. Training for career mobility 6. Transfer policies

Somewhat Neither Satisfied 2 Satisfied Nor Dissatisfied 3 1 2 1 2 1 2 1 2 1 2 1 2

Satisfied 4

Very Satisfied 5

3 3 3 3 3 3

4 4 4 4 4 4

5 5 5 5 5 5

Exercise 12.4 SCALE Nominal

Ordinal Interval

Ratio

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VARIABLE AND EXPLANATION Buyers of a product can be nominally grouped under three categories: those who like the product and buy, those who are indifferent to the product and buy, and those who do not like the product, yet buy it anyway.

Customer rank ordering of preferences for various name brands of jeans.

Extent of appeal of a particular advertisement to customers on a five point scale ranging from very little to very much. Here customers are split into five groups; they are ranked from those who like very little to those who like very much; there is also an assessment of the extent of the appeal; and we know that the difference between two adjacent points in the scale have the same magnitude of difference.

Percentage of sales increase of a product. There is an absolute zero

Research Methods for Business origin (when there is no additional sale made at all during a particular year, the sales increase is zero), and a 10 percent increase in sales is twice as much as a 5 percent increase. Thus this scale has both a zero origin and a measure of proportion. Hence, it is a ratio scale.

Exercise 12.5 Develop and name the type of measuring instrument you would use to tap the following: a. Which brands of beer are consumed by how many individuals; Nominal scale will be used.

The questionnaire might simply ask the name of the brand consumed by each individual and when the responses are received, categorize them under the different brands, or The popular brands can be categorized with a final item “Other” and respondents asked to mark the one they consume. b. Among the three types of exams – multiple choice, essay type, and a mix of both , which is the one preferred most by students; An ordinal scale will be used for this.

Rank your preferences for the types of exams below. For the most preferred one, place 1 beside the item, for the next preferred, 2, and the least preferred, 3.

Multiple Choice Exams Essay type Exams Mix of multiple choice and Essay questions

_______ _______ _______

c. To what extent do individuals agree with your definition of accounting principles.

This will be tapped on a Likert scale (interval scale).

Use the following scale to respond to the item below: Strongly Disagree

Disagree

1 To what extent do you agree with my definition of Accounting Principles as described below?

2 1

.

Neither Agree nor Disagree 3 2

Agree 4 3

Strongly Agree 5 4

5

Research Methods for Business d. How much people like an existing organizational policy.

Interval-scaled item as below.

For the item below, circle the appropriate number, using the scale below Very Much 1 How much do you like the existing organizational policy?

e.

To some Extent 2 1

Neither Like nor Dislike 3 2

Somewhat Dislike 4 3

Dislike Intensely 5 4

5

The age of employees in an organization.

Ratio scale asking for the actual age of employees. f.

The number of employees in each of the 20 departments of a company.

Ratio scale counting the exact number of employees in each of the departments.

Exercise 12.6 “The SERVQUAL-scale described in the appendix is formative in nature.”

Comment on this statement. Explain why it does not make sense to assess the inter-item consistency of this scale.

A formative scale is used when a construct is viewed as an explanatory combination of its indicators. The SERVQUAL-scale contains five dimensions (e.g., responsiveness, reliability, tangibles). It does not make sense to test the inter-item consistency of this scale because we do not expect the items in a formative scale to be homogeneous; in other words we do not expect all the items to correlate.

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Research Methods for Business

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Research Methods for Business

CHAPTER 13 SAMPLING Instructional Goals 1. To impress upon the students that the hallmarks of science discussed at the beginning of the course, i.e. generalizability, replicability, and precision and confidence are mainly ensured by the sampling design chosen, including the sample size.

2. To explain how the probability sampling designs are representative of the population.

3. To highlight the advantages and the drawbacks of different types of probability sampling designs.

4. To make students realize that probability sampling designs are not always feasible, and sometimes nonprobability sampling designs are the only viable alternative available.

5. To elucidate that either too large or too small a sample size could be detrimental for drawing meaningful and valid conclusions.

6. To explain the notions of efficiency in sampling and the trade-off between precision and confidence.

7. To clarify the choice points in sampling design shown in Figure 11.3 in the textbook and provided in Powerpoint.

8. To introduce the need for identifying and articulating the sample characteristics in terms of gender, age, job level, tenure, etc., for purposes of replicability, and for comparing the results of different research studies.

Note: The above aspect in item 8 is brought out later in the book, but is worth stating now.

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Research Methods for Business However, sensitizing students about sample characteristics at this stage will help them to understand why a good description of sample characteristics is important and why they should pay attention to it in their final report.

In-Class Exercises on Sampling Designs What kinds of sampling designs would be used for the following: a. A study to get a quick idea of the medical acceptability of a new aspirin substitute which cannot be dispensed over the counter without prescription. b. A study involving a sample of 325 students in a university where 2,000 students are enrolled. c. An investigation of the career salience of professionals in the fields of medicine, engineering, business, and law. d. The generalizability of the attitudes of blue collar workers from a sample of 184, to the total population of 350 blue collar workers in the entire factory of a particular company.

Answers a. Purposive Judgment Sampling. b. A Systematic sampling design (using university listing of students). c. A Stratified Random sampling with stratification along profession, gender, age, etc. d. Simple random sampling because of the importance attached to high generalizability.

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Research Methods for Business Estimation of Population Characteristics from Sample Characteristics The book works out a problem on the estimations of the population characteristics from the sample characteristics for different levels of precision and confidence. Another example that can be used in class is provided below.

Problem la.

You want to estimate the production days that would be lost during the next three months by sampling the vacation intentions of a few employees.

You randomly select 36 employees in the organization and find that the average number of days they intend taking off is 16 during the coming three Summer months, with a standard deviation of seven (7) days. Based on these sample statistics, you want to estimate at a 99 percent confidence level, the days that will be lost due to the entire population of workers taking vacation time during the next three months, so that the plant manager knows how much temporary help he should plan on hiring during the summer months in order for work to proceed smoothly.

Calculation μ = X  zSx

S x = S/ n = 7 / 6 = 1.167

μ = 16  ( 2.576 1.167 ) = 16  3.01 = 12.99 to19.01

If there are 100 employees in the organization expected to take vacation during Summer, then, the most optimistic estimation of the days lost through vacation time during the summer would be (13  100 =) 1,300 days and the most pessimistic would be (19  100 =) 1,900 days. This would mean that temporary help would be needed anywhere between 1,300 and 1,900 days worth of labor, for production to proceed smoothly.

Ib. Now you might want to narrow the gap in the estimation since 1,300 and 1,900 days is a wide range, and you would like more precision using the same information that is available to you. Well, it can be done only at the cost of taking .

Research Methods for Business more chances that your estimation, though more precise, may not be stated as confidently as before. You may, however, decide to lower your confidence level to gain more precision in your estimation. At the 95 percent confidence level, the most pessimistic and the most optimistic estimations would range from 1372 to 1828, a narrower range – we are now gaining more precision, i.e., narrowing confidence interval–but only at the risk of being wrong five percent (as opposed to one percent of the times). We could seek a further narrower interval range at the 90 percent confidence level (1408 to 1792), if taking a higher risk in being wrong in the estimation is not going to be disastrous. You as a manager will have to decide on the amount of risk you want to take by increasing or decreasing the confidence level.

Estimating Sample Size Estimating the sample size for given levels of required accuracy and precision is discussed in the book with examples. Further problems can be given to students in class. A sample problem given to them could be as follows.

Problem How large a sample do you need if you want to estimate the mean age of a population of 100 residents and be within 3 years of the true mean with a 95 percent level of confidence, when you know that the sample mean is 28 years and the standard deviation is 17 years?

Solution Sx = 3 /1.96 = 1.53

Sx = s / n 1.53 = 17 / n 1.53  n = 17

n = 17 /1.53 n = 123

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Research Methods for Business

Discussion Questions 1. Identify the relevant population for the following research foci, and suggest the appropriate sampling design to investigate the issues, explaining why they are appropriate. Wherever necessary, identify the population frame as well. a.

A company wants to investigate the initial reactions of heavy softdrink users to a new “all natural” soft-drink.

Initial reactions” non-probability sampling.

Heavy soft-drink users: purposive sampling

b. A gun manufacturing firm would like to know the types of guns possessed by various age groups in Washington, D. C. When guns are sold, the dealers are expected to maintain records of the names and ages of the buyers, and the types of guns sold. Thus, the population frame for gun owners can be had from the records of gun dealers in the Washington, D.C. area. Once a complete list is compiled, a stratified random sampling of appropriate age groups can be done, and the relevant information obtained. c. A hospital administrator wants to examine if the single parents working in the hospital have a higher rate of absenteeism than parents who are not single.

The marital status and parental status of the employees may be available from the records of the hospital. If so, the population frame would be the hospital records from which the information can be directly extracted. A stratified random sampling design can be used and a t-test done to examine if there are differences in absenteeism in the two groups. If the marital or parental status of the employees is not available, then a convenience sample of those who are known to be single parents and those who are known to be not single parents can be used to check their records for absenteeism. d. A researcher would like to assess the extent of pilferage in the materials from storage warehouses of manufacturing firms in the East coast.

First, the researcher will have to randomly select some big, medium.

Research Methods for Business size, and small cities in the East coast – say two of each. Thereafter, three warehouses from each of the large, medium, and small size cities will be randomly selected. This then will form the sample for study. The pilferage rates can then be assessed by checking the records of original supplies to the warehouses, the amount of stocks sold, and the balance at hand. e. The Director of Human Resources wants to investigate the relationship between drug abuse and dysfunctional behaviors of blue collar workers in a particular plant.

Identifying drug abusers is very difficult, unless there is a mandatory drug test administered. Also, what is meant by dysfunctional behaviors has to be clearly defined. If a list of drug abusers is available through drug tests, then depending on the numbers, either all of them (if the number is small), or a random sample among them (if the number is large) can be observed for any dysfunctional behaviors and compared with the behaviors of a random sample of those who are not drug abusers. f.

A marketer wants to generate some ideas on how women differ from men in acquiring product knowledge about cars.

Some ideas = non-probability sampling Women versus men = quota sampling.

2a. Explain why cluster sampling is a probability sampling design. b. What are the advantages and disadvantages of cluster sampling? c. Describe a situation where you would consider the use of cluster sampling. a. Cluster sampling is a probability sampling design since each cluster has a known chance of being selected as the sample. b. Cluster samples offer ease of data collection within a relatively short time frame. However, being homogenous, they do not offer the advantage of efficiency in sampling. c. Cluster sampling could be used to assess the types of films (comedies, fighting, violence, social dramas, adventure, etc.,) that are most popularly rented by theater owners. Different theater complexes, each of which might have anywhere from .

Research Methods for Business four to eight different films being shown at any given time, could be treated as clusters. More homogeneity within clusters, and heterogeneity between clusters can also be expected since different complexes might be catering to different types of clientele. As such, cluster sampling would be ideally suited for this purpose.

3a. Explain what precision and confidence are and how they would influence sample size.

Precision indicates how close the sample statistics are to the population parameters. Usually, a bigger sample size offers greater precision than a smaller one, especially when the population is heterogenous in the characteristics of interest to the study. Confidence indicates the percentage of times when our projected statistics will be truly reflecting the population parameters. This again, is a function of the sample size – a bigger sample size will allow for a projection to be made at a higher level of confidence. But, for any given sample size, we cannot increase both precision and confidence simultaneously.

3b. Discuss what is meant by the statement: There is a trade off between precision and confidence under certain conditions.

There is a trade-off between precision and confidence as a function of sample size. For any given sample size, if the precision has to be increased, then the level of confidence will go down. On the other hand, if one needs more confidence, then the precision will have to go down.

In other words, for any given sample size, either the precision or the confidence, but not both, can be increased. As a matter of fact, either can be increased only at the expense of the other.

4. The use of a convenience sample in organizational research is correct because all members share the same organizational stimuli and go through almost the same kinds of experiences in their organizational life. Comment.

It is not correct to say that all organizational members share the same kinds of experiences because different supervisors, different departments, and different work environments offer different kinds of stimuli to organizational members. Hence, selecting a few members based on convenience sampling and generalizing the results to the total population would not be advisable. Even among the same group of

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Research Methods for Business people exposed to the same kinds of stimuli, perceptions will vary due to individual differences in selective perception and interpretation.

Hence, a probability sampling design, rather than a convenience sample would be more appropriate to project the properties of the sample on to the population.

5. Use of a sample of 5,000 is not necessarily better than having a sample of 500. How would you react to this statement?

Not only is a sample of 5,000 not necessarily better, but it could also be detrimental, since the probability of rejecting the null hypothesis becomes too large – i.e., every trivial differences become significant.

We could compare this to using an electron microscope to examine the differences between two atoms. The differences will be enormously magnified if we use the “power” of the electron microscope when actually, the difference between two atoms is negligle. In fact, Statistical tables are available which specify the appropriate sample size for desired levels of confidence. Too big a sample size is likely to lead to erroneous conclusions, since with larger sample sizes, even small correlations reach statistical significance, and thus, the probability of our committing Type I error is high.

6. Nonprobability sampling designs ought to be preferred to probability-sampling designs in some cases. Explain with an example.

The above statement is true in cases where the information needed for research can be obtained only from a select category of people who are not plentiful in numbers and for whom a population frame does not exist. In such cases, the nonprobability purposive judgement sampling design is the most useful one. Here the most conveniently available members of the limited population of individuals who have the necessary information are contacted to obtain information. This is the only meaningful way to get information since a simple random sampling or any other probability sampling design is impossible without the availability of a relevant population frame. As an example, information on the effectiveness of AZT (even after taking into consideration its side-effects), for cancer patients, can be best obtained only from those who are suffering from cancer and using AZT. 7. Because there seems to be a tradeoff between accuracy and confidence for any given sample size, accuracy should be always

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Research Methods for Business considered more important than precision. Explain with reasons, why you would or would not agree with this statement.

Whether confidence or precision is more important is a decision that each researcher has to make, based on the goals of the research. In some cases, confidence may be more important to the research, and in others, precision. For instance, a salesperson might want to place greater emphasis on the confidence in the projected number of sales he is likely to make, than wanting to know the exact number of sales he will make – i.e. he desires greater confidence in the projection than precision. In other words, he may be willing to accept an error margin of seven percent (rather than a three percent) so long as he is sure that the chances of being off the mean is no more than .01 percent! On the other hand, a marksman might insist on more precision (how close he will hit the bull’s eye, thus testing his potential abilities to shoot the target) and not so concerned about the percentage of times he is likely to hit the bulls eye (the confidence level). He might prefer precision, because if he knows he has the abilities, he can practice more and improve the probability of his chances for success. These examples illustrate the trade-off between accuracy and precision. The decision whether accuracy or confidence is more important has to be made by the researcher and for good reasons, and one may not always necessarily be preferred over the other.

8. Over-generalizations give rise to a lot of confusion and other problems for researchers who try to replicate the findings. Explain what is meant by this.

A careful description of the sample characteristics is necessary to enable the reader to judge the extent to which the conclusions drawn from the research findings are generalizable. If the sample is not adequately described and sweeping generalization are made, then the researchers who try to replicate the findings will run into difficulties, since the findings of the previous study may not be replicated, simply because what is relevant to one population may not be so for another.

The conflicting findings would cause confusion and researchers will not know whether the discrepancies are due to faulty theories or methodological problems. It is for this reason that research reports should carefully describe the population and the sample characteristics.

9. Double sampling is probably the least used of all sampling designs in

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Research Methods for Business organizational research. Do you agree? Provide reasons for your answer.

Double sampling is probably used more in the exploratory stages of research where data are collected several times from subsets of a sample–e.g., a subset of those who were interviewed with unstructured questions are again interviewed with structured questions in order to obtain more specific and focused information on phenomena that may not be well-understood. For instance, double sampling is not uncommon in cross-cultural research, in research on dual career families, and the like. While quantitative data through questionnaires are essential, for more in-depth probing of certain phenomena, structured interviews are sometimes conducted with a subset of the sample from whom questionnaire responses have been obtained.

10. Why do you think the sampling design should feature in a research proposal?

Details of the sampling design giving details of how many and what cadres of personnel will be included in the survey, helps the sponsor to see if such people would be available and could respond to the survey. It also helps determine the extent to which the findings will be generalizable to the entire organization.

In published studies, it also helps the reader become aware of the settings to which the findings can be generalized.

Exercises For the situations below, what would be the relevant population and the most appropriate sampling design? Make sure you discuss the reasons for your answers.

Exercise 13.1 The medical inspector desires to estimate the overall average monthly occupancy rates of the cancer wards in 80 different hospitals which are evenly located in the Northwestern, Southeastern, Central, and Southern suburbs of New York city.

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Research Methods for Business All the 80 hospitals in the four parts of New York city form the population from which the overall occupancy rates are to be established. A simple random sampling design would be best suited because hospitals of different sizes, and those serving clientele from different socio-economic status would then be included in the survey, and be most representative of the population.

Exercise 13.2 A magazine article suggested that “Consumers 35 to 44 will soon be the nation’s biggest spenders, so advertisers must learn how to appeal to this “over-the-thrill crowd”. If this suggestion appeals to an apparel manufacturer what should be the sampling design to assess the tastes of this group?

The population would, of course, be all those between the ages of 35 and 44. However, targeting this population would be difficult since a population frame would not be available (excepting with the Bureau of Census). A good way to obtain access to a portion of this population could be through retail store outlets like J.C. Penney, Ross, or Mervyns. If their cooperation can be obtained to generate a list of this age group through their credit card information (which might have customers’ date of birth on them), then a random sample or a systematic sample of this population can be used to administer a mail survey. The responses obtained from consumers from a variety of cities can then be used to formulate an idea of what the tastes of the target group are.

Exercise 13.3 The McArthur Co. produces special vacuum cleaners for conveniently cleaning the inside of cars. About a thousand of these are produced every month with stamped serial numbers and stored serially in a stock room. Once a month, an inspector does a quality control check on fifty of these. When he certifies them as to quality, the units are released from the stock room for sale. The production and sales managers, however, are not satisfied with the quality control check, since quite often, many of the units sold are returned by customers because of various types of defects, What would be the most useful sampling plan to test the fifty units?

A systematic sampling design would be most useful since a probability sampling design is called for, and also because it would be easy to locate the

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Research Methods for Business pieces to be sampled since they have serial numbers and stored according to the serial numbers.

Exercise 13.4 A consultant had administered a questionnaire to some 285 employees using a simple random sampling procedure. As she looked at the responses, she suspected that two questions might not have been clear to the respondents. She would like to know if her suspicion is well founded.

A double sampling design will be used in this case. That is, a sub-sample of the original sample can be approached to see whether or not the two questions were clear to them.

Exercise 13.5 The Executive board of a relatively small university located in Europe wants to determine the attitude of their students toward various aspects of the University. The university, founded in 1928, is a fully accredited government financed university with 11,000 students.

The university specializes in the social sciences and humanities and has 5 faculties, 6 service departments, 8 research centers, and 2 graduate schools. The Executive board has asked you to come up with a sampling plan. Develop a sampling plan and pay attention to the following aspects: target population, the sampling frame, the sample technique and the sample size

The population will comprise all the students of the University. A sampling frame is available, hence probability sampling is a viable option. There are identifiable subgroups (students of the five different faculties and graduate schools) which may be expected to have different parameters to the variable of primary interest (attitude). For that reason you may want to use a stratified sampling design. A minimum sample size of 30 for each stratum is necessary.

Exercise 13.6 T-Mobile is a mobile network operator headquartered in Bonn, Germany. The company has enlisted your help as a consultant to develop and test a model on the determinants of subscriber churn in the German mobile telephone market. Develop a sampling plan and pay specific attention to the following aspects.

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Research Methods for Business Define the target population. Discuss in as much detail as possible the sampling frame and the sampling design that you would use. Give reasons for your choice.

Target population: German T-mobile mobile phone subscribers.

Sampling Frame: A database with subscribers on a recent date (for instance 6 months ago). This database will include both customers who have remained loyal to T-mobile and customers who have switched mobile phone providers.

Sampling design: proportionate stratified sampling with loyal customers and customers who have switched mobile phone providers in proportion to their original numbers in the population.

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CHAPTER 14 Quantitative Data Analysis Instructional Goals 1. To make statistics come alive and become meaningful to the students through examples that they can relate to.

2. To get the students to analyze data using any of the available PC software programs.

3. To impress on the students that the data collected should first be edited, the blank responses given an appropriate value, and then entered for analysis.

4. To stress the importance of getting a feel for the goodness of data after recoding.

5. To explain how the frequency distribution becomes a tool for explaining sample characteristics; 6. To connect the application of descriptive statistics such as the means, standard deviations, and variance to the dependent and independent variables of interest to any study in order to get an idea of the central tendencies and to obtain a feel for the data; 7. To make sense out of Pearson Correlations, by interpreting significant correlations, and to sensitize students to extremely high correlations (over .8) which might cause concerns regarding the discriminant validity of the measures; 8. To help them interpret the results they obtain from data analyses.

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Exercises on Data Interpretation Practice in the interpretation of the results of data analyses can be encouraged through the exercises below. These can be done either as in-class exercises or given as take-home assignments.

Exercise #1 On Frequency Distributions Below is a tabulation of the demographic data from the Frequency distribution of a survey done by Ms. Sandra Jones. Her sample consisted of 148 of a total of 3,700 clerical employees in three service organizations. Based on the tabulation provided below, describe the sample characteristics.

Table 1: Frequency Distributions of Sample (n = 148) RACE Non-whites = 48 (32%) Whites = 100 (68%)

AGE < 20 = 10(7%) 20-30 = 20(14%) 31-40 = 30(20%) >40 = 88(59%)

EDUCATION High School = 38 (26%) College Degree = 74 (50%) Masters Degree = 36 (24%)

# OF YEARS IN ORG. < 1 year = 5 (3%) 1-3 = 25(17%) 4-10 = 98(66%) >10 = 20(14%)

GENDER Males = 11(75%) Females = 37 (25%)

MARITAL STATUS Single 20 (14%) Married 108 (73%) Divorced 13 (9%) Alternative7 (4%) Lifestyle

Answer The tabulation indicates the percentages on all the demographic data (as shown in parentheses above). A profile of the respondents will be as follows.

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Research Methods for Business Population and Sample The population consisted of 3,700 clerical employees in three service organizations. Of these a sample of 148 clerical employees was drawn. Based on the demographic characteristics provided in the table, we can say that the majority of the respondents are white (67.6 percent of the sample), have at least a college degree (50 percent with college degrees and 24 percent with Masters degrees), are married (73 percent), are above 40 years of age (59 percent), and have served in their organizations for four to ten years (66 percent).

Further breakdowns of educational levels can be given, depending on the nature of the study, and the necessity for detailed descriptions.

Exercise #2 on Means, Standard Deviations, and Other Statistics Here is another tabulation of the Means, Standard Deviations, etc., for Ms. Jones’ data. How would you interpret these data?

Table 2: Means, Standard Deviations and Other Statistics VARIABLE Age # of Years Married Stress Job Involvement Performance

MEAN 37.5 12.1 3.7 3.9 3.6

STD. DEV 18 24 1.79 1.63 0.86

MODE 38 15 3 4 3

MIN 20 0 1 2 3

MAX 64 32 5 5 5

Answer The mean age of the respondents is 37.5 and since the mode is also 38, it can be presumed that many of the respondents are about 38 years old. The average number of years the respondents have been married is about 12, with some not married at all (minimum = 0).

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Research Methods for Business The amount of stress experienced by the subjects in this sample seems to be a little over the average, but not high (3.7 on a 5-point scale); the same can be said for their performance level (3.6 on a 5-point scale). The extent of their job involvement is close to a 4 (four) on a 5-point scale and can be considered to be moderately high.

While there is more variance in stress and job involvement (1.79 and 1.63), the variance in performance is rather low (.86 ). This would indicate that there is greater dispersion in the experienced stress and extent of job involvement, but most of the people have been performing at the same “just above the average” level.

We would thus describe the profile of the average worker in these three organizations-assuming that the sample is representative of the population-as being about 38 years old, married for about 12 years, performing at just above the average level, fairly involved in the job and experiencing a moderate amount of stress.

Exercise #3 on Correlations From the same research done by Ms. Jones, the following intercorrelation matrix is shown. Interpret these results.

Table 3: Pearson Correlations VARIABLE Age # of yrs. married Stress Job Involvement Performance

AGE 1.0 .86 −.43 .53 .09

# OF YRS. MARRIED

STRESS

JOB INVOLVEMENT

PERFORMANCE

1.0 −.61 .32 −.06

1.0 .58 .49

1.0 .36

1.0

a. All correlations above .30 are significant, at least at the .05 level. b. All correlations above .50 are significant, at least at the .01 level.

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Answer Eight correlations in the above matrix are significant at least at the .05 level, of which, four are significant at least at the .01 level. Only two of the ten correlations in the matrix are not significant.

Age and the number of years married are highly correlated (r = .86) and this is not surprising, because older people are likely to have been married for a longer period of time than younger persons.

Older persons also experience less stress (r = −.43) possibly because they have either learned the ropes well and things do not stress them, or they are better able to handle stress and hence hardly experience them as stress, or they are given easy jobs.

Older people are also more job involved (r =.53), but age is not related to performance. That is, though the older employees may be more involved in their jobs than the younger ones, they do not necessarily perform better than the latter.

Those experiencing more stress are more involved in their jobs (r = .58) and also perform better (r = .49). The more the job involvement, the better the performance (r = .36). The above relationships do not indicate causality, merely correlations.

Those married for a longer period, experience less stress, possibly because the family demands are less on them since they would have settled down to a routine family life which does not induce stress. The persons who are married for longer periods of time are also more involved in their jobs. But the length of marriage is not related to performance (r = −.06; n.s.).

If performance is the main variable of interest to this study we would say that neither age nor the length of marriage has any relationship to performance, but that the amount of stress, and the level of job involvement do have significant bivariate relationships with the performance of employees. The more job involved people are, the better they perform; the more stress they experience, the better they perform.

Note: Based on the correlations among stress, job involvement, and performance, it would be inappropriate to conclude that the high performer gets job involved and hence experiences stress. Causal inferences cannot be drawn from correlational analyses.

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Research Methods for Business

Discussion Questions 1. What activities are involved in getting the data ready for analysis?

After data are obtained through questionnaires, they need to be coded, keyed in, and edited. That is, a categorization scheme has to be set up before the data can be typed in. Then, outliers, inconsistencies, and blank responses, if any, have to be handled in some way.

2. What does coding the data involve?

Data coding involves assigning a number to the participants’ responses so they can be entered into a database.

3. Data editing deals with detecting and correcting illogical, inconsistent, or illegal data in the information returned by the participants of the study. Explain the difference between illogical, inconsistent, and illegal data.

An example of an illogical response is an outlier response. An outlier is an observation that is substantially different from the other observations. An outlier is not always an error even though data errors (entry errors) are a likely source of outliers. Because outliers have a large impact on the research results they should be investigated carefully to make sure that they are correct.

Inconsistent responses are responses that are not in harmony with other information.

Illegal codes are values that are not specified in the coding instructions.

4. How would you deal with missing data?

One way to handle a blank response is to ignore it when the analyses are done. An alternative solution would be to look at the participant’s pattern of responses to other questions and from these answers deduce a logical answer to the question for the missing response. A second alternative solution would be to assign to the item the mean value of the responses of all those who have responded to that particular item. In fact, there are many ways of handling blank responses, each of them having its own particular advantages and disadvantages.

5. What is reverse scoring and when is reverse scoring necessary?

Take for instance the perceived inequity measure of the Excelsior Enterprises case. Perceived

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Research Methods for Business inequity is measured by five survey items: (1) ‘I invest more in my work than I get out of it’; (2) ‘I exert myself too much considering what I get back in return’ ; (3) ‘For the efforts I put into the organization, I get much in return’ (reversed); (4) If I take into account my dedication, the organization ought to give me a better practical training’; and (5) In general, the benefits I receive from the organization outweigh the effort I put in it (reversed). For the first, second and fourth item, a score indicating high agreement would be negative, but for the third and fifth question a score indicating high agreement would be positive. To maintain consistency in the meaning of a response, the first, second, and fourth item have to be reverse scored (note that we are measuring equity and not inequity). In this case, a 5 (I completely agree) would be transformed to a 1 (I completely disagree), a 4 to a 2, and so forth.

6. There are three measures of central tendencies: the mean, the median, and the mode.

Measures of dispersion include the range, the standard deviation, and the variance (where the measure of central tendency is the mean), and the interquartile range (where the measure of central tendency is the median).Describe these measures and explain which of these measures you would you to provide an overview of a) nominal, b) ordinal and c) interval data?

Scale

Nominal

Measures of Central Tendency …for a Single Variable Mode

Measures of Dispersion …for a Single Variable -

Visual Summary -------------------------…for a Single Variable Bar chart, pie chart

Ordinal

Median

Semi-interquartile range

Bar chart, pie chart

Interval

Arithmetic mean

Histogram, scatter plots, boxand whisker plot

Ratio

Arithmetic or geometric mean

Minimum, maximum, standard deviation, variance, coefficient of variation Minimum, maximum, standard deviation, variance, coefficient of variation

Histogram, scatter plots, boxand whisker plot

Measure of Relation …between Variables Contingency Table (CrossTab) Contingency Table (CrossTab) Correlations

Visual Summary of Relation …between Variables Stacked bars, Clustered bars

Correlations

Scatterplots

Stacked bars, Clustered bars Scatterplots

Measures of Central Tendency The Mean. The mean or the average is a measure of central tendency that offers a general picture of the data without unnecessarily inundating one with each of the observations in a data

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Research Methods for Business set. The mean or average of a set of say, 10 observations, is the sum of the 10 individual observations divided by 10 (the total number of observations).

The Median. The median is the central item in a group of observations when they are arrayed in either an ascending or a descending order.

The Mode. In some cases, a set of observations would not lend itself to a meaningful representation through either the mean or the median, but can be signified by the most frequently occurring phenomenon.

Measures of Dispersion Range. Range refers to the extreme values in a set of observations.

Variance. The variance is calculated by subtracting the mean from each of the observations in the data set, taking the square of this difference, and dividing the total of these by the number of observations.

Standard Deviation. The standard deviation, which is another measure of dispersion for interval and ratio scaled data, offers an index of the spread of a distribution or the variability in the data.

Other Measures of Dispersion. When the median is the measure of central tendency, percentiles, deciles, and quartiles become meaningful. Just as the median divides the total realm of observations into two equal halves, the quartile divides it into four equal parts, the decile into 10, and the percentile to 100 equal parts. The percentile is useful when huge masses of data, such as the GRE or GMAT scores, are handled. When the area of observations is divided into 100 equal parts, there are 99 percentile points. Any given score has a probability of .01 that it will fall in any one of those points. If John’s score is in the 16th percentile, it indicates that 84% of those who took the exam scored better than he did, while 15% did worse.

Oftentimes we are interested in knowing where we stand in comparison to others—are we in the middle, in the upper 10 or 25%, or in the lower 20 or 25%, or where? For instance, if in a company-administered test, Mr. Chou scores 78 out of a total of 100 points, he would be unhappy if he were in the bottom 10% among his colleagues (the test-takers), but would be reasonably pleased if he were in the top 10%, despite the fact that his score remains the same.

His standing in relation to the others can be determined by the central tendency median and the percentile he falls in.

The measure of dispersion for the median, the interquartile range, consists of the middle 50% of the observations (i.e., observations excluding the bottom and top 25% quartiles). The interquartile range could be very useful when comparisons are to be made among several groups.

For instance, telephone companies can compare long-distance charges of customers in several

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Research Methods for Business areas by taking samples of customer bills from each of the cities to be compared.

7. A researcher wants to provide an overview of the gender of the respondents in his sample. The gender is measured like this: What is your gender?

0 Male 0 Female What is the best way to provide an overview of the gender of the respondents?

Provide a frequency table.

8. Consider the following reliability analysis for the variable customer differentiation.

What could you conclude from it?

R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Item-total Statistics

CUSDIF1 CUSDIF2 CUSDIF3 Reliability Coefficients N of Cases = 111.0 Alpha = .5878

Scale Mean if Item Deleted 10.0405 9.7432 9.6486

Scale Variance if Item Deleted 5.4733 5.0176 5.3754

ItemTotal Correlation .2437 .5047 .4849

Corrected Alpha if Item Deleted .7454 .3293 .3722

N of Items = 3

The scale is not reliable. We can delete item 1 to increase the Cronbach’s alpha will increase to .7454.

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Research Methods for Business

CHAPTER 15 Quantitative Data Analysis: Hypothesis Testing Instructional Goals 1. To make students understand and apply the different types of analyses and tests to get at the inferential information they need.

2. To help them interpret the results they obtain from data analyses.

Discussion Questions 1. What kinds of biases do you think could be minimized or avoided during the data analysis stage of research?

The purpose of hypothesis testing is to determine accurately if the null hypothesis can be rejected in favor of the alternate hypothesis. Based on the sample data the researcher can reject the null hypothesis (and therefore accept the alternate hypothesis) with a certain degree of confidence: there is always a risk that the inference that is drawn about the population is incorrect.

There are two kinds of errors (or two ways in which a conclusion can be incorrect), classified as type I errors and type II errors. A type I error, also referred to as alpha (α), is the probability of rejecting the null hypothesis when it is actually true. In the Excelsior Enterprises example introduced in Chapter 14, a type I error would occur if we concluded, based on the data, that burnout affects

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Research Methods for Business intention to leave when, in fact, it does not. The probability of type I error, also known as the significance level, is determined by the researcher. Typical significance levels in business research are 5% (<0.05) and 1% (<0.01).

A type II error, also referred to as beta (β), is the probability of failing to reject the null hypothesis given that the alternate hypothesis is actually true; e.g., concluding, based on the data, that burnout does not affect intention to leave when, in fact, it does. The probability of type II error is inversely related to the probability of type I error: the smaller the risk of one of these types of error, the higher the risk of the other type of error.

A third important concept in hypothesis testing is statistical power (1 – β).

Statistical power, or just power, is the probability of correctly rejecting the null hypothesis. In other words, power is the probability that statistical significance will be indicated if it is present.

Statistical power depends on: 1. Alpha (α): the statistical significance criterion used in the test. If alpha moves closer to zero (for instance, if alpha moves from 5% to 1%), then the probability of finding an effect when there is an effect decreases.

This implies that the lower the α (i.e., the closer α moves to zero) the lower the power; the higher the alpha, the higher the power.

2. Effect size: the effect size is the size of a difference or the strength of a relationship in the population: a large difference (or a strong relationship) in the population is more likely to be found than a small difference (similarity, relationship).

3. The size of the sample: at a given level of alpha, increased sample sizes produce more power, because increased sample sizes lead to more accurate parameter estimates. Thus, increased sample sizes lead to a higher probability of finding what we were looking for. However, increasing the sample size can also lead to too much power, because even very small effects will be found to be statistically significant.

Along these lines, there are four interrelated components that affect the inferences you might draw from a statistical test in a research project: the power of the test, the alpha, the effect size, and the sample size. Given the values for any three of these components, it is thus possible to calculate the value of the fourth.

Generally, it is recommended to establish the power, the alpha, and the required precision (effect size) of a test first, and then, based on the values of these components, determine an appropriate sample size.

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Research Methods for Business 2. When we collect data on the effects of treatment in experimental designs, which statistical test would be most appropriate to test the treatment effects?

We would use a t-test with paired samples to determine the treatment effects.

3. A tax consultant wonders whether he should be more selective about the class of clients he serves so as to maximize his income. He usually deals with four categories of clients: the very rich, rich, upper middle class, and middle class. He has information on each and every client served, the taxes paid by them, and how much he has charged them. Since many factors relating to the clients vary (number of dependents, business deductibles, etc.), irrespective of the category they belong to, he would like an appropriate analysis to be done to see which among the four categories of clientele he should choose to serve in the future.

What kind of analysis should be done in the above case and why?

Undergraduate Students can be exposed to a simple ANOVA design.

An ANOVA will help the tax consultant to make the decision, since the differences among the four groups on the dependent variable, income, can be obtained through this analysis. A further test such as the Duncan Multiple Range test, will determine which among the four groups provides the most income.

More advanced students can take this approach.

Since there are four categories of clients – very rich, rich, upper middle class, and middle class –, and the tax consultant wants to see how the clients can be differentiated on various independent variables which are on a continuous scale, in order to increase his income, he could use a MANOVA. MANOVA deals with multiple independent variables simultaneously and differentiates the groups on the critical factors.

A discriminant analysis will indicate which of the entire set of variables are maximially discriminated for the four groups. Action can then be taken based on the results.

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Research Methods for Business 4.

What is bootstrapping and why do you think that this method is becoming more and more popular as a method of testing for moderation and mediation?

Bootstrapping is a statistical method based on building a sampling distribution for a statistic by resampling from the data at hand.

Bootstrapping is becoming a more and more popular method of testing mediation and moderation. A big advantage of bootstrapping is that no assumptions about the shape of the sampling distribution of the statistic are necessary when conducting inferential tests.

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CHAPTER 16 QUALITATIVE DATA ANALYSIS Instructional Goals 1. To make qualitative data analysis come alive and become meaningful to the students through examples that they can relate to.

2. To explain that qualitative data can be very rich and to stress the importance of reducing qualitative data to key ideas and concepts.

3. To get the students to analyze data using a structured approach.

4. To stress the importance of reliability and validity in qualitative data analysis.

Discussion Questions 1. What is qualitative data? How do qualitative data differ from quantitative data?

Qualitative data is data in the form of words. Qualitative data is data in the form of numbers.

2. What are the main steps in qualitative data analysis?

According to Miles and Huberman, there are generally three steps in qualitative data analysis: data reduction, data display, and the drawing of conclusions.

3. Define reliability and validity in the context of qualitative research.

Reliability and validity have a slightly different meaning in qualitative research in comparison to quantitative research. Reliability in qualitative data analysis includes .

Research Methods for Business category and interjudge reliability. Category reliability “depends on the analyst’s ability to formulate categories and present to competent judges definitions of the categories so they will agree on which items of a certain population belong in a category and which do not.” (Kassarjian, 1977, p. 14). Interjudge reliability can be defined degree of consistency between coders processing the same data (Kassarjian 1977).

Validity refers to the extent to which the research results 1) accurately represent the collected data (internal validity) and 2) can be generalized or transferred to other contexts or settings (external validity).

4. How can you assess the reliability and validity of qualitative research?

A commonly used measure of interjudge reliability is the percentage of coding agreements out of the total number of coding decisions. As a general guideline, agreement rates at or above 80% are considered to be satisfactory.

Two methods that have been developed to achieve validity in qualitative research are discussed next.

- Supporting generalizations by counts of events. This can address common concerns about the reporting of qualitative data; that anecdotes supporting the researcher’s theory have been selected, or that too much attention has been paid to a small number of events, at the expense of more common ones.

- Ensuring representativeness of cases and the inclusion of deviant cases (cases that may contradict your theory). The selection of deviant cases provides a strong test of your theory.

5. What is grounded theory?

Categorization is the process of organizing, arranging, and classifying coding units.

Codes and categories can be developed both inductively and deductively. In situations where there is no theory available, you must generate codes and categories inductively from the data. In its extreme form, this is what has been called grounded theory.

6. How does narrative analysis differ from content analysis?

Narrative analysis is an approach that aims to elicit and scrutinize the stories we tell about ourselves and their implications for our lives. Narrative data are often collected via interviews. These interviews are designed to encourage the participant to describe a certain incident in the context of his or her life history. Like this, narrative analysis

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Research Methods for Business differs from other content analysis; it is focused on a process or temporal order, for instance by eliciting information about the antecedents and consequences of a certain incident in order to relate this incident to other incidents.

7. Why is analytic induction inductive (rather than deductive) in nature?

ANALYTIC INDUCTION INVOLVES INDUCTIVE -- RATHER THAN DEDUCTIVE -REASONING, ALLOWING FOR THE MODIFICATION OF A HYPOTHETICAL EXPLANATION FOR PHENOMENA THROUGHOUT THE PROCESS OF DOING RESEARCH.

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CHAPTER 17 THE RESEARCH REPORT Instructional Goals 1. To integrate all that has preceded in this course so that the purpose of each of the steps in the research process and design now becomes clear and meaningful to the students.

2. To help students to pull together the results of their study and discuss the interpretation of the results in a way that helps to address the original research question that they had posed.

3. To enable students to look at alternative solutions to solve the problem that has been investigated and make recommendations on the best course of action, weighing the pros and cons.

4. To encourage students to depict pictorial representations of the results of their data analyses.

5. To help students address the limitations of their study, and enable them to suggest what else might be done in the future by way of researching such problem situations.

6. To facilitate students to write different kinds of research reports, depending on the goals and purpose of the study.

7. To sharpen the oral presentation skills of the students after the research report is written, enabling them to highlight the important aspects of their study in a succinct manner to the relevant audiences, within a limited time.

Discussion Questions 1. Discuss the purpose and contents of the Executive Summary.

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Research Methods for Business The Executive Summary offers a condensed version of the problem, the methods of investigation, the results of the study, the interpretation of the results, and the recommendations made. This helps the busy executive to go through just two or three pages and grasp the essence of what is contained in the report.

2. What are the similarities and differences of basic and applied research reports?

Both applied and basic research reports stress the scientific aspects of the study. Whereas, reports of basic studies focus on a general problem for research, the applied research report will focus on a specific problem related to a specific setting at a specific time. The latter will also discuss the pros and cons of various alternative solutions offered and usually provide a cost-benefit analysis.

3. How have technological advancements helped in writing and presenting research reports?

Technological advances have not only helped in the analysis of data without the help of a mainframe, but make graphic presentations more sophisticated. The presentation is made more powerful through Power Point, CD Rom and Videographics. Video presentations can be seen in any part of the world where the company would want to beam them.

4. Why is it necessary to specify the limitations of the study in the research report?

If the limitations of the study are acknowledged and explicitly stated by the researcher, then the reader will have an idea of the possible reasons why these limitations could not be overcome, and hence will be able to make a judgment about the scientific quality of the study. For example, in a study of dual career families, it is practically impossible to come up with a population frame because organizations just do not have a listing of employees who are members of dual career families. In such cases, the utmost one can expect is for the researcher to have a large enough sample from a variety of settings, so that some understanding of the dynamics of dual career families can be had. By acknowledging the limitation, but still arguing that the results of the study are not invalid for various reasons (empirical validity is established, the results have been replicated with different samples, etc.), the reader would be convinced that the researcher did try to make the study as scientific as

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Research Methods for Business possible. When the limitations are not explicitly stated, the reader is left wondering why the limitations are not even acknowledged, and hence might be inclined to downgrade the usefulness of the study.

5. What aspects of a class research project would be stressed by you in the written report and in the oral presentation?

In the written report since there is no limitation on the number of pages, all aspects of the study will be discussed in as much detail as is necessary, including literature survey. But in the presentation, the problem statement, the sampling design, data analysis and interpretation, the recommendations, and the cost-benefit will be emphasized much more than some other aspects, due to the limitations of time. It is also appropriate to state during the presentation that only some of the important aspects of the study are presented, and whatever is omitted but considered important by the audience could be taken up during question time.

Exercises Exercise 17.1 1. Critique Report 3 in the Appendix. Discuss it in terms of good and bad research, suggesting how the study could have been improved, what aspects of it are good, and how scientific it is. i. The good aspects of the research report are: a. The report is well organized under appropriate heads and subheads, and has a professional look about it. b. The literature survey seems to be current and relevant, as can be gleaned from this abridged report. c. The theoretical framework, hypotheses, and the rest of the report flow logically. The Method Section is quite informative. The data analysis and the discussion, conclusions, and recommendations sections are well done. d. The report summarized the main points addressed in the subsections which helps the reader to keep track of what is going on.

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Research Methods for Business ii. The not-so-good aspects of the report: a. The recommendations seem to be broad with no specific ideas as to implementation. For example, what could be some of the ways of determining the worth of employee contributions, rather than merely counting the hours worked?

Though a detailed study of this could be done later, some suggestions would help at this stage. b. There is also no mention of the costs of implementing the ideas.

For instance, what resources would be necessary in assigning mentors, and giving sensitivity training seminars, etc. Also, will the executives be willing and have the time to attend a sensitivity training seminar? These could be dealt with more specifically. c. The limitations to the study are not stated. Every study has some limitation and this was conspicuous by its absence in the report.

Exercise 17.2 Give a title to and write the introductory section of any study you might like to conduct.

Answers will vary.

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