Business Research Methods Cooper & Schindler Chapter 2

How do we know something? Where does the knowledge originate as we go about our daily life?

Methods of Knowing Method of tenacity Method of authority Method of intuition Method of science Kerlinger, 1986

Styles of Thinking Empiricism Rationalism Denote observations and propositions based on sense experience and /or derived from such experience by means of inductive logic including mathematics and statistics Attempt to describe, explain, and make predictions through observation Rationalism All knowledge can be deduced from known laws or basic truth of nature

Style of Thinking Rationalism (formal structural proofs) Postulational3 Self-evident truth3 Method of authority 3 Scientific method3 Idealism (highly interpretative ideas) Empiricism (observable, concrete data) Literary3 3Untested opinion Existentialism (informal process)

Sources of Knowledge Postulation Self-evident truth Studies in operations research, management science, mathematical modeling, and simulation Self-evident truth People would die no matter what precautions were taken Method of authority We rely on person’s authority to improve our confidence Literary Case studies have played a prominent role in the development of business knowledge Untested opinion That’s the way we’ve always done it here

Essential Tenets of Science Direct observation of phenomena Clearly defined variables, methods, and procedures Empirically testable hypotheses The ability to rule out rival hypotheses The statistical rather than linguistic justification of conclusions The self-correcting process

Deduction A form of inference that purports to be conclusive The conclusion must necessarily follow from the reasons given These reasons are said to imply the conclusion and to represent a proof Conclusions are not logically justified if One or more premises are untrue The argument form is invalid (Premise 1) --- All regular employees can be trusted not to steal (Premise 2) --- John is a regular employee (Conclusion) --- John can be trusted not to steal

Induction To induce is to draw a conclusion from one or more particular facts or pieces of evidence The conclusion explains the facts, and the facts support the conclusion Why doesn’t the light go on? Because the light bulb has burned out - The conclusion is an induction because we know from experience that (1) the light should go on when you push the switch and (2) if the bulb is burned out, the light will not function Why is Tracy Nelson doing so badly? Because she make too few sales calls per day to build a good sales record. - Tracy’s territory does not have the market potential of others - Tracy’s sales-making skills are so poorly - Tracy’s territory has been the scene of intense price cutting by local manufacturers, and this has caused her to lose many sales

? The induction and deduction processes are used in research reasoning in a sequential manner. --By John Dewey(Double Movement of Reflective thought) (Induction) Fact1 ? (Deduction) Hypothesis Fact2 (Deduction) Fact1 = Pushing the light switch results in no light Fact2 = Inserting a new bulb brings light when switch is pushed

1. You push the light switch and find no light 2. You ask the question, “Why no light?” 3. You infer a conclusion (hypothesis) to answer the question and explain the fact that the bulb is burned out 4. You use this hypothesis to conclude (deduce) that the light will not go on when we push the switch. We know from experience that a burn-out bulb will not light. 5. A new bulb put in the lamp will result in light when the switch is push 6. We put in the new bulb and push the switch. The light goes on

? Fact1 (Induction) Fact2 Hypothesis Fact3 (Deduction) Fact1 = Poor performance record Fact2 = Late to work regularly Fact3 = Fewer calls per day than average performance

Scientific Research Process Encounters a curiosity, doubt, barrier, suspicion, or obstacle Struggles to state the problem: asks questions, contemplates existing knowledge, gathers facts, and moves from an emotional to an intellectual confrontation with the problem Propose hypotheses to explain the facts that are believe to be logically related to the problem Deduces outcomes or consequences of the hypotheses: attempts to discover what happens if the results are in the opposite direction of that predicted or if the results support the expectations

Scientific Research Process Formulates several rival hypotheses Devises and conducts a crucial empirical test with various possible outcomes, each of which selectively excludes one or more hypotheses Draws a conclusion, an inductive inference, based on acceptance or rejection of the hypotheses Feeds information back into the original problem, modifying it according to the strength of the evidence

Sources of Concepts Concepts have been developed over time through shared usage Different society may use many of the same concepts Some concepts are unique to a particular culture Concepts can be borrowing from other fields Strategic weapon, gravitation, distance, threshold, velocity Borrowing is not always practical, so we need to Adopt new meanings for words Develop new label for concepts

Constructs Composed of Concepts in a Job Redesign Example Most abstract “ Job Interest Construct ” (Components unknown by analyst) “ Language Skill Construct ” Vocabulary Level of abstraction Syntax Spelling “ Presentation Quality Construct ” Manuscript errors Constructs Composed of Concepts in a Job Redesign Example Format Accuracy Typing speed Most concrete

Independent Variable Dependent Variable Defining Independent and Dependent Variables Independent Variable Dependent Variable Presumed cause Stimulus Predicted from... Antecedent Manipulated Presumed effect Response Predicted to... Consequence Measured outcome

Moderating Variables Moderating variables Example a second independent variable that is included because it is believed to have a significant contributory or contingent effect on the original state IV-DV relationship Example The introduction of the four-day workweek (IV) will lead to higher productivity (DV), especially among younger workers (MV)

Extraneous Variables An almost infinite number of extraneous variables exists that might conceivably affect a given relationship Example In routine office work (control), the introduction of the four-day workweek (IV) will lead to higher productivity (DV), especially among younger workers (MV)

Intervening Variables That factors which theoretically affects the observed phenomenon but cannot be seen, measured, or manipulated; its effect must be inferred from the effects of the independent and moderator variables on the observed phenomenon Examples The introduction of a four-day workweek will lead to higher productivity by increasing job satisfaction (IVV) A promotion campaign (IV) will increase saving activity (DV), especially when free prizes are offered (MV), but chiefly among smaller savers (control). The results come from enhancing the motivation to save(IVV)

Descriptive Hypotheses These are propositions that typically state the existence, size, form, or distribution of some variable Example The current unemployment rate in Detroit exceeds 6 percent of the labor force Researchers will often use a research question rather than a descriptive hypothesis What is the unemployment rate in Detroit?

Relational Hypotheses These are statements that describe a relationship between two variables with respect to some case Example Foreign cars are perceived by American consumers to be of better quality than domestic cars Correctional relationships Young machinists are less productive than those who are 35 years or older Explanatory, or causal relationships An increase in family income leads to an increase in the percentage of income saved