Business Research Methods William G. Zikmund Chapter 6: Problem Definition and the Research Proposal

“The formulation of the problem is often more essential than its solution.” Albert Einstein

Problem Definition The indication of a specific business decision area that will be clarified by answering some research questions.

Defining Problem Results in Clear Cut Research Objectives Symptom Detection Analysis of the Situation Exploratory Research (Optional) Problem Definition Statement of Research Objectives

The Process of Problem Definition Ascertain the decision maker’s objectives Determine unit of analysis Understand background of the problem Determine relevant variables Isolate/identify the problem, not the symptoms State research questions and objectives

Ascertain the Decision Maker’s Objectives Managerial goals expressed in measurable terms.

The Iceberg Principle The principle indicating that the dangerous part of many business problems is neither visible to nor understood by managers.

Understand the Background of the Problem Exercising judgment Situation analysis - The informal gathering of background information to familiarize researchers or managers with the decision area.

Isolate and Identify the Problems, Not the Symptoms Symptoms can be confusing Twenty-year-old neighborhood swimming association: Membership has been declining for years. New water park -residents prefer the expensive water park???? Demographic changes: Children have grown up

Problem Definition Organization Symptoms Based on Symptom True Problem Twenty-year-old neighborhood swimming association in a major city. Membership has been declining for years. New water park with wave pool and water slides moved into town a few years ago. Neighborhood residents prefer the expensive water park and have negative image of swimming pool. Demographic changes: Children in this 20-year-old neighborhood have grown up. Older residents no longer swim anywhere.

Figure 2.5 Discussion between Researcher and DM Focus of the DM Loss of Market Share Focus of the Researcher Superior Promotion by Competition Inadequate Distribution of Company’s Products Lower Product Quality Price Undercutting by a Major Competitor Symptoms Underlying Causes Copyright © 2012 Pearson Education, Inc.

Problem Definition Based on Symptoms Can Be Misleading Firm Symptoms Based on Symptoms Underlying Causes Manufacturer of orange soft drinks Consumers say the sugar content is too high Determine consumer preferences for alternative levels of sugar content Color. The color of the drink is a dark shade of orange giving the perception that the product is too “sugary.” Manufacturer of machine tools Customers complain prices are too high Determine the price elasticity of demand Channel management. Distributors do not have adequate product knowledge to communicate product benefits to customers. Copyright © 2012 Pearson Education, Inc.

Table 2.2 Management Decision Problem Versus the Marketing Research Problem Asks what the decision maker needs to do Asks what information is needed and how it should be obtained Action oriented Focuses on symptoms Information oriented Focuses on the underlying causes Copyright © 2012 Pearson Education, Inc.

Table 2.3 Management-Decision Problem and Marketing Research Problem Should a new product be introduced? To determine consumer preferences and purchase intentions for the proposed new product. Should the advertising campaign be changed? To determine the effectiveness of the current advertising campaign. Should the price of the brand be increased? To determine the price elasticity of demand and the impact on sales and profits of various levels of price changes. What can Subaru do to expand its automobile market? To determine the various needs of the automobile users and the extent to which those needs were being satisfied by the current product offering Copyright © 2012 Pearson Education, Inc.

Figure 2.7 Errors in Defining the Market Research Problem Does Not Provide Guidelines for Subsequent Steps e.g., Improving the Company’s Image Problem Definition is too Broad Common Errors May Miss Some Important Components of the Problem e.g. Changing Prices in Response to a Competitor’s Price Change Problem Definition is too Narrow Copyright © 2012 Pearson Education, Inc.

Preliminary Data Collection Broad Problem Area Currently existing problems Situations Requiring Improvement Preliminary Data Collection Nature of the Data to be gathered Background Information Situation analysis

Choose a Question that is Neither Too Broad or Too Narrow For example, if you choose Question A: Do children sent to day care or preschool start kindergarten with more developed skills? Question B: Do children sent to day care or preschool start kindergarten with more highly developed language skills? Question C: Do children sent to day care or preschool start kindergarten with larger vocabularies? Once you complete your list, review your questions in order to choose a usable one that is neither too broad nor too narrow. In this case, the best research question is “b.“"The topic is broad enough to find more than just one or two sources, but it's limited to one focus--the development of preschool language skills. Question "a" is too broad since it focuses on all skills (e.g., language, social, small motor skills, large motor skills, etc.--you get the idea). You'd have to gather too much diverse information to answer question "a." There may or may not be enough information to answer question "c." You'd need to find more than just one or two studies if you chose to answer question "c." If you find that there are enough sources dealing with vocabulary only, then you could choose to pursue question "c."

Is the Research Question Too Broad, Too Narrow, or Okay? Question A: What marketing strategies does the Coca-Cola company currently apply? Question B: What is the Coca-Cola company's future marketing plan? Question C: What marketing strategies has the Coca-Cola company used in the past?

Question B: What is the Coca-Cola company's future marketing plan? Question A: What marketing strategies does the Coca-Cola company currently apply? Question "a" is the best research question. Your research to answer this question may include observation of print, television, and radio advertisements as well as research into various current marketing theories and strategies. Both types of research are "do-able," and the question is focused enough to yield a fully-developed research paper. Question B: What is the Coca-Cola company's future marketing plan? Question "b" is very broad as well as being unresearchable--it's unlikely that Coca-Cola personnel will reveal their marketing plan. Question C: What marketing strategies has the Coca-Cola company used in the past? Too Narrow

Is the Research Question Too Broad, Too Narrow, or Okay? Question A: What impact has deregulation had on the airline industry? Question B: What percentage of commercial airline crashes were traced to negligent maintenance during the 10 years immediately preceding and following deregulation? Question C: What impact has deregulation had on commercial airline safety?

Question A: What impact has deregulation had on the airline industry Question A: What impact has deregulation had on the airline industry? too broad, since deregulation may have had impact on safety, costs, passenger fees, ability to comply with government regulations, and many other areas of the airline industry, too many to deal with in depth in one research paper. Question B: What percentage of commercial airline crashes were traced to negligent maintenance during the 10 years immediately preceding and following deregulation? too narrow. It can be answered with simple percentages and cannot be developed into a full research paper. Question C: What impact has deregulation had on commercial airline safety? best research question. You may use statistics such as question "b" would uncover as you answer question "c," which is focused enough to allow you to research the question in some depth yet broad enough to allow you to consider the various effects of deregulation on airline safety.

Basic Questions-- Problem Definition What is the purpose of the study? How much is already known? Is additional background information necessary? What is to be measured? How? Can the data be made available? Should research be conducted? Can a hypothesis be formulated?

Determine the Unit of Analysis Individuals, households, organizations, etc. In many studies, the family rather than the individual is the appropriate unit of analysis.

Determine the Relevant Variable Anything that may assume different numerical values

Types of Variables Categorical Continuous Dependent Independent

Variable Anything that can take on differing or varying values. Examples: Production units Absenteeism Motivation

Types of Variables The dependent variable The independent variable The moderating variable The intervening variable

Dependent Variable It is the main variable that lends itself for investigation as a viable factor. For Example: An applied researcher wants to increase the performance of organizational members in a particular bank. A marketing manager wonders why the recent advertisements strategy does not work.

Independent Variable The independent variables are those that are deliberately manipulated to invoke a change in the dependent variables. For Example: A manager believes that good supervision and training would increase the production level of workers. A consultant is of the opinion that much benefit would accrue by buying and selling at the appropriate times in a financial environment where the stocks are volatile.

Moderating Variable The moderating variable is one that has a strong contingent effect on the independent variable and dependent variable relationship. That is the presence of a third variable modifies the original relationship between the independent and the dependent variables.

Moderating Variable Scenario 1: A manager finds that off the job classroom training has a great impact on the productivity of the employees in her department. However, she also observes that employees over 60 years of age do not seem to derive much benefit and do not improve with such training.

Moderating Variable Scenario 2: A visitor to a factory observes that the workers in the packing department have to interact with one another to get their jobs done. The more they interact, the more they seem to tend to stay after hours and go to the local restaurant for coffee. However, the women packers, even though they interact with others as much as the men, do not stay late, nor do they visit the restaurant after work hours.

Intervening Variable An intervening variable is one that surfaces between the time the independent variables start operating to influence the dependent variable and the time their impact is felt on it. The intervening variable surfaces as a function of the independent variables opening in any situation and helps to conceptualize and explain the influence of the independent variable on the dependent variable.

Intervening Variable Scenario 1: Failure to follow accounting principles causes immense confusion, which in turn creates a number of problems for the organization. Those with vast experience in bookkeeping, however are able to avert the problems by taking timely corrective action.

Exercise Scenario 2: The manager of Haines company observes that the morale of employees is low She thinks that if working conditions are improve, pay scales raised, and the vacation benefits made attractive, the morale will be boosted. She doubts however, if an increase of pay scales would raise the morale of all employees. Her perception is that those that have supplemental incomes will just not be turned on by higher pay, and only those without side incomes will be happy with increased pay with resultant boost of morale.

Exercise A prevalent theory is that the diversity of the workforce contributes more to the organizational effectiveness because each group brings its own special expertise. This synergy however can be exploited if the manager knows how to harness the special talent of the diverse workgroup, otherwise they will remain untapped.

Exercise Make up fourthree different situations in Independent variable Dependent variable Intervening variable Moderating variable

Theory Theories are constructed in order to explain, predict and master phenomena (e.g. relationships, events, or the behavior). In many instances we are constructing models of reality. A theory makes generalizations about observations and consists of an interrelated, coherent set of ideas and models.

Formulating the Theoretical Framework The theoretical framework of the study is a structure that can hold or support a theory of a research work. It presents the theory which explains why the problem under study exists. Thus, the theoretical framework is but a theory that serves as a basis for conducting research.

Theoretical Framework 1. Consists of the variables considered relevant to the study 2. Shows the nature and direction of relationships 3. Sometimes show the positive and negative relationships according to previous researches 4. Consists of a diagram to easily comprehend the theorized relationships.

Exercise of theoretical framework With airline deregulations, there were price wars among various airlines. Delta Airline faced charges of air-safety violations when there were several near collisions in mid air and one accident that resulted in 137 deaths. Four important factors that seemed to have influenced these are poor communication among the cockpit crew members themselves, poor coordination between ground staff and cockpit crew, minimal training given to the cockpit crew,and management philosophy that encouraged a decentralization structure. It would be nice to know if these factors did indeed contribute to the safety violations, and if so to what extent.

HYPOTHESIS )

HYPOTHESIS It is a tentative prediction or explaination of two or more variables The hypothesis is the most important mental tool the research has. It is important integral component of modern scientific research K. SYED, MPT (Ortho)

PURPOSES OF HYPOTHESIS It provides bridge between theory and reality and in this sense unifying of two domains It provides powerful tool, for the advancement of knowledge since they enable the researcher to objectively enter new areas of discovery It provides direction for any research Endeavour by tentatively identifying the anticipated outcome. It is guide to the thinking process and the process of discovery It serves as a framework for drawing conclusions K. SYED, MPT (Ortho)

advantages Hypothesis builds researches confidence in his results Sound hypothesis gives direction to the inquiry A good hypothesis enriches theory K. SYED, MPT (Ortho)

Characteristics of Hypothesis It should be clear and precise It should be capable of being tested It should state relationship between variables It should be limited in scope and must be specific It should be understandable It should be consistent with most known facts It should be test with amenable time It should be comprises needed explanations K. SYED, MPT (Ortho)

Classification of hypothesis Directional hypothesis Non directional hypothesis Research hypothesis (Alternative) Statistical hypothesis (Null) K. SYED, MPT (Ortho)

Types of Hypothesis If-then statements: A hypothesis can also test whether there are differences between two groups with respect to any variable. Employees who are more healthy will take sick leave less frequently. If employees are more healthy, then they will take sick leave less frequently.

Types of Hypothesis 2. Directional and Non directional Hypothesis: If terms such as positive, negative, more than, less than are used, then the hypothesis are directional because the relationship between variables is indicated. For Example: The greater the stress experienced in the job, the lower the job satisfaction level of employees.

Types of Hypothesis Non-Directional Hypothesis: No indication of the direction of the relationship is given. For example: There is a relationship between age and job satisfaction.

Types of Hypothesis Hypothesis Null Hypothesis Alternate Hypothesis

Directional Vs Nondirectional Research Question for Differences: Do boys like reading more than girls? Null Hypothesis:  Boys do not like reading more than girls. Alternative Hypothesis:  Boys do like reading more than girls. Research Question for Differences: Do boys' and girls' attitude towards reading differ? Null Hypothesis:    Boys' and girls' attitude towards reading do not differ. Alternative Hypothesis:   Boys' and girls' attitude towards reading differ.