BUSINESS RESEARCH METHODS Dr Yaseen Ghulam Business Research Methods – Course objectives Managers have to make informed decisions. Quantitative approach is one of scientific methods in making business decisions Quantitative approach presumably disregards emotional/ psychological content that may affect decision maker in formulating problems, finding most fitted alternatives, gathering appropriate/ relevant data, testing the result and in applying the decision. Course will introduce some decision theory models that in some extents will quantify psychological effect on the rationale of a decision. - will be useful in making a good and rational decision in the area of marketing, finance, and human resource management. Business Research Methods – Course Outline 3 Part 1 Theory  Introduction to Research Method (today) Part 1 Tools and m ethods of business research (tom orrow )      Index Numbers Correlation Linear and Nonlinear Regression Time Series Analysis Significance Testing Part 1 Applications (tw o assignm ents) Saturday  Mathematical Applications for Business and Economic Problems: Demand, Supply, and Elasticities  Mathematical Applications for Business and Economic Problems: Breakeven Analysis Part 1 Case studies (tw o case studies) 16-17 February Business Research Methods Outline of today’s discussion 1. The Role of Business Research 2. Theory Building 3. The Business Research Process 4. Problem Definition and Research Proposal 5. Research proposal writing 6. Exploratory Research and Qualitative Analysis 7. Secondary Data 8. Survey Research SECTION 1 BUSINESS RESEARCH METHODS The Role of Business Research The Role of Business Research 1. Business Research Defined 2. Business Research Types 3. The Role of Research in Decision-making Process 4. Determining When to Conduct Business Research 5. Major Topics for Research in Business 6. Basic Methods of Research Business Research Defined  Business research is the systematic and objective process of generating information to reduce uncertainty.  Business research is conducted to provide valid and reliable answer(s) to already posed research questions.  It facilitates the managerial decision process for all aspects of a business.  Research information is neither intuitive nor haphazardly gathered.  Literally, research (re-search) -“search again”  Business research must be objective  Detached and impersonal rather than biased Research Questions “?” INFORMATION REDUCES UNCERTAINTY I don’t know if we should offer on-site child care? Data versus Information   Data—the raw facts—record measures of certain phenomena which are necessary to provide Inform ation—facts in a form suitable for managers to base decisions on. Characteristics of Valuable Information     Relevance Quality Timeliness Completeness 2. Business Research Types  Basic Research: Attempts to expand the limits of knowledge. Not directly involved in the solution to a pragmatic problem.  Applied Research: Conducted when a decision must be made about a specific real-life problem  Basic Research Example  Is executive success correlated with high need for achievement?  Are members of highly cohesive work groups more satisfied than members of less cohesive work groups?  Do consumers experience cognitive dissonance in lowinvolvement situations? Applied Research Examples  Should McDonalds add Italian pasta dinners to its menu?  Business  research told McDonald’s it should not Should Procter & Gamble add a high-priced home teeth bleaching kit to its product line?  Research showed Crest Whitestrips would sell well at a retail price of $44 3. The Role of Research in the Decision-making Process  Information is vital to conduct a proper decision process for successfully: all four steps are important to identify the problems  Identifying problems and opportunities  Diagnosis and assessment  Selecting and implementing a course of action  Evaluating the course of action( what could be done ) The Process of Decision Making  Decision making  The process through which managers and leaders identify and resolve problems and capitalize on opportunities.  Problem A condition that occurs when some aspect of organizational performance is less than desirable.  Opportunity  Any situation that has the potential to provide additional beneficial outcomes. Seven Steps in the Decision-Making Process Identifying opportunities and diagnosing problems Identifying objectives Generating alternatives Evaluating alternatives Reaching decisions Choosing implementation strategies Monitoring and evaluating Step 1: Identifying Opportunities and Diagnosing Problems   The clear identification of opportunities or the diagnosis of problems that require a decision. An assessment of opportunities and problems will only be as accurate as the information on which it is based. Self study materials Step 2: Identifying Objectives  Objectives reflect the results the organization wants to attain. Also called targets, standards or ends.  The quantity and quality of the desired results should be specified, for these aspects will ultimately guide the decision maker in selecting the appropriate course of action.  Objectives can be measured on a variety of dimensions (monetary units, output per hour, % of defects, etc.) and whether the objectives are long-term versus short-term. Self study materials Step 3: Generating Alternatives   Once an opportunity has been identified or a problem diagnosed correctly, a manager develops various ways to solve the problem and achieve objectives. The alternatives can be standard and obvious as well as innovative and unique. Self study materials Step 4: Evaluating Alternatives   Determining the value or adequacy of the alternatives generated. Predetermined decision criteria may be used in the evaluation process.  Quality desired  Anticipated costs  Benefits  Uncertainties  Risks Self study materials Step 5: Reaching Decisions   Decision making is commonly associated with making a final choice. Although choosing an alternative would seem to be a straightforward proposition, in reality the choice is rarely clear-cut. Self study materials Step 6: Choosing Implementation Strategies   The bridge between reaching a decision and evaluating the results. The keys to effective implementation are:  Sensitivity to those who will be affected by the decision.  Proper planning and consideration of the resources necessary to carry out the decision. Self study materials Keys to Effective Implementation of Decisions Self study materials Step 7: Monitoring and Evaluating   No decision-making process is complete until the impact of the decision has been evaluated. Managers must observe the impact of the decision as objectively as possible and take further corrective action if it becomes necessary. Self study materials 4. Determining When to Conduct Business Research     Time constraints Availability of data Nature of the decision Benefits versus costs Self study materials When to Conduct Business Research? Time Constraints Is sufficient time available before a managerial decision must be made? No Yes Availability of Data Nature of the Decision Is the information already on hand inadequate for making the decision? Is the decision of considerable strategic or tactical importance? No Yes Benefits vs. Costs Yes Does the value of the research information exceed the cost of conducting research? No Do Not Conduct Business Research No Yes Conducting Business Research Value Should Exceed Estimated Costs Costs Value •Decreased certainty •Increased likelihood of a correct decision •Improved business performance and resulting higher profits •Research expenditures •Delay of business decision and possible disclosure of information to rivals •Possible erroneous research results 5. Major Topics for Research in Business Five m ajor them es 1. General Business Conditions and Corporate Research 2. Financial and Accounting Research 3. Management and Organizational Behavior Research 4. Sales and Marketing Research 5. Information Systems Research 6. Corporate Responsibility Research 6. Basic Methods of Research     Surveys Experiments Secondary data Observation SECTION 2 BUSINESS RESEARCH METHODS Theory Building Theory Building 25th Jan 1. Definition of Theory 2. Levels of Reality 2.1. Constracts 2.2. Propositions 3. Scientific Method 3.1. Deductive Reasoning 3.2. Inductive Reasoning Soft subject 1. Definition of Theory A coherent set of general propositions used as principles of explanation of the apparent relationships of certain observed phenomena. Two Purposes of Theory: • Understanding • Prediction Soft subject 2. Levels of Reality   Abstract level (concepts & propositions): in theory development, the level of knowledge expressing a concept that exists only as an idea or a quality apart from an object. Empirical level (variables & hypotheses): level of knowledge reflecting that which is verifiable by experience or observation. Soft subject 2.1. Concept (or Construct)     A generalized idea about a class of objects, attributes, occurrences, or processes that has been given a name Building blocks that abstract reality “leadership,” “productivity,” and “morale” “gross national product,” “asset,” and “inflation” Soft subject Concepts are Abstractions of Reality Abstract Level CONCEPTS Soft subject Empirical Level OBSERVATION OF OBJECTS AND EVENTS (REALITY) Theories Propositions Concepts Increasingly more abstract Theory Building: A Process Of Increasing Abstraction Soft subject Observation of objects and events (reality ) 2.2. Propositions  Propositions are statements concerned with the relationships among concepts. • A hypothesis is a proposition that is empirically testable. It is an empirical statement concerned with the relationship among variables. • A variable is anything that may assume Soft subject different numerical values. Proposition at Abstract Level Concept A Concept B (Reinforcement) (Habits) Hypothesis at Empirical Level Dollar bonus for sales volume over quota Always makes Softcalls subject four sales a day 3. Scientific Method The use of a set of prescribed procedures for establishing and connecting theoretical statements about events and for predicting events yet unknown. Soft subject Empirical Evidence help us predict future reality through abstract concepts This slide Linking theory with practice 1–39 3.1. Deductive Reasoning  The logical process of deriving a conclusion from a known premise or something known to be true. know that all managers are human beings.  If we also know that John Smith is a manager,  We  then we can deduce that John Smith is a human being. Soft subject 3.2. Inductive Reasoning  The logical process of establishing a general proposition on the basis of observation of particular facts. All managers that have ever been seen are human beings;  therefore all managers are human beings.  Soft subject The Scientific Research Method: An Overview im portant 7 steps to conduct scientific research 1 Assess relevant existing knowledge 5 Acquire empirical data 2 3 Formulate concepts & Propositions Statement of Hypotheses 4 Design Research Which the methodo 7 6 Analyze & evaluate data Provide explanationstate new problem SECTION 3 BUSINESS RESEARCH METHODS The Business Research Process Important The Business Research Process 1. Information and Decision Making 2. Types of Research 2.1. Exploratory 2.2. Descriptive 2.3. Causal 3. Stages of the Research Process 1.Information and Decision Making The key to decision making is:  to recognize the nature of the problem/opportunity,  to identify what type of information is needed,  and how much information is available. Information reduces the level of uncertainty in decision making Soft slide Levels of Certainty in Decision Making 1.Certainty: Necessary information is perfectly available, which is something rare. Under certainty, the exact nature of the problem/opportunity is clear, Objectives to be achieved by an effective decision are set. Soft slide Levels of Certainty in Decision Making Certainty: Necessary information to develop alternatives and select the best solution among them is already present Therefore, there is no need to make research for understanding the situation and making Soft slide prediction. 2. Uncertainty: Necessary information is somewhat available, which is something usual. Under uncertainty, the exact nature of the problem/opportunity is clear, Objectives to be achieved by an effective decision are set. Soft slide Uncertainty: However, necessary information to develop alternatives and select the best solution among them is incomplete. Therefore, research is needed to enlarge our incomplete understanding of the situation and to be able to make better predictions than managerial guesses. Soft slide 3. Ambiguity: Almost no information is available, which is something rare. Under ambiguity, the exact nature of the problem/opportunity is not clear, Objectives to be achieved by an effective decision are not set yet. Soft slide Ambiguity: Necessary information to develop alternatives and select the best solution among them is incomplete. Therefore, research is extremely needed to enlarge our understanding and to be able to make predictions. Soft slide 2. Types of Research Important  Exploratory Descriptive  Causal more advance , academic  Important Uncertainty Influences the Type of Research COMPLETE CERTAINTY NO RESEARCH AT ALL UNCERTAINTY CAUSAL RESEARCH DESCRIPTIVE RESEARCH ABSOLUTE AMBIGUITY EXPLORATORY RESEARCH Important Degree of Problem Definition Exploratory Research (Unaware of Problem) “Our sales are declining and we don’t know why.” “Would people be interested in our new product idea?” Descriptive Research (Aware of Problem) Causal Research (Problem Clearly Defined) “What kind of people are buying “Will buyers purchase more of our product? Who buys our our products in a new package? competitor’s product?” “Which of two advertising “What features do buyers prefer campaigns is more effective?” in our product?” Important 2.1. Exploratory Research Secondary data Experience survey Pilot studies 55 Exploratory Research    Important Initial research conducted to clarify and define the nature of a problem Does not provide conclusive evidence Subsequent research expected Important 2.2. Descriptive Research   Describes characteristics of a population or phenomenon Some understanding of the nature of the problem I keep six honest serving men, (they taught me all I knew), their names are what, and why, and when, and how, and where and who.” --Rudyard Kipling 58 2.3. Causal Research  Important Conducted to identify cause and effect relationships Identifying Causality   A causal relationship is impossible to prove. Evidence of causality: 1. The appropriate causal order of events  2. Concomitant variation--two phenomena vary together  3. An absence of alternative plausible explanations  Very Important 3. Stages of the Research Process Problem Discovery and Definition Research Design Discovery and Definition and so on Conclusions and Report Sampling Data Processing and Analysis Data Gathering Important Problem discovery Problem Discovery and Definition Selection of exploratory research technique Sampling Selection of exploratory research technique Secondary (historical) data Experience survey Probability Pilot study Case study Data Gathering Data Processing and Analysis Problem definition (statement of research objectives) Experiment Laboratory Conclusions and Report Survey Field Interview Collection of data (fieldwork) Editing and coding data Data processing Selection of basic research method Research Design Nonprobability Questionnaire Observation Secondary Data Study Soft slide Interpretation of findings Report The Business Research Process Problem Discovery Selection of Sample Design Exploratory Research Collection of the Data Selection of the Basic Research Method Soft slide The Research Process (cont.) Editing and Coding Report Data Processing Interpretation of the Findings Soft slide “THE FORMULATION OF THE PROBLEM IS OFTEN MORE ESSENTIAL THAN ITS SOLUTION” Albert Einstein SECTION 4 BUSINESS RESEARCH METHODS Problem Definition Problem Definition 25 jan Definition of a Management Problem 2. Definitions of Problem Discovery and Problem Definition 3. The Process of Problem Definition 1. Important 1. Definition of a Management Problem   Problem: existence of a difference between the current conditions and a more preferable set of future conditions. Management Problem: a development that necessiates a decision to cope with difficulties and threats, or to exploit opportunities. Soft slide Management Problems Mean Performance Gaps 69  Business performance is worse than expected business performance.  Actual business performance is less than possible business performance.  Expected business performance is greater than possible business performance. Soft slide 2. Definitions of Problem Discovery and Problem Definition   Problem Discovery: getting aware of some symptons of a management problem Problem Definition: The indication of a specific business decision area that will be clarified by answering some research questions. Soft slide Defining Problem Results in Clear Cut Research Objectives Symptom Detection Analysis of the Situation Problem Definition Statement of Research Objectives Important Exploratory Research (Optional) 3. The Process of Problem Definition Ascertain the decision maker’s objectives Understand background of the problem Isolate/identify the problem, not the symptoms Soft slide Determine research objectives Determine the unit of analysis Determine relevant variables and state hypotheses 3.1. Ascertain the Decision Maker’s Objectives   Managerial objectives should be expressed in measurable terms; however, line managers seldom clearly articulate their problems to the researchers. Researchers should try to understand the problems by interviewing the related managers and collect information from other sources. Soft slide 3.2. Understand the Background of the Problem 74   Situation analysis: the informal gathering of background information to familiarize researchers or managers with the decision area. The Iceberg Principle: the dangerous part of many business problems is neither visible to nor understood by managers. Soft slide 75 Soft slide 3.3. Isolate and Identify the Problems, Not the Symptoms 76 *Identify the Symptoms • by interrogative techniques: Asking multiple what, where, who, when, why, and how questions about what has changed. • by probing :An interview technique that tries to draw deeper and more elaborate explanations from the discussion. *Isolate the Symptoms from the True Problem Soft slide Organization Symptoms Problem Definition Based on Symptoms 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. Beverage manufacturer Consumers prefer taste of competitor’s products Taste of our product needs to be reformulated Old fashioned package is influencing consumers’ taste perceptions. Soft slide 3.4.Determine the Research Objectives • After clarifiyng the situation (current decision need) managerial decision statements should be translated into corresponding research objectives. – Once the decision statement is written, the research essentially answers the question, “What information is needed to address this situation?” • Research objectives are the deliverables of the research project. “If you do not know where you are going, Soft slideany road will take you there” Broad research objectives Statement of business problem Exploratory research (optional) Specific Objective 1 Specific Objective 2 Specific Objective 3 Research Design Results Soft slide 3.5. Determine the Unit of Analysis 80    Unit of Analysis indicates what or who should provide the data and at what level of aggregation: Individuals, households, organizations, etc. In many studies, the family or the firm rather than the individual may be the appropriate unit of analysis; Then, data collected at the individual level should be aggregated at a higher level to the firm, work group, or familiy. Soft slide Examples of Research Objectives and Unit of Analysis 81 • To identify the critical factors affecting clients’ choice of some specific brands. (individual clients) • To identify the future performance of candidates for a specific job offer.(individual candidates) • To establish the reasons for stagnant sales and suggest means by which sales can be increased. (firms)slide Soft 3.6. Determine the Relevant Variables and Hypotheses 82       To determine what characteristics of the unit of analysis will be measured by the researchers. These characteristics may vary within the same unit of analysis. For instance, Research Objective: to identify the ways of increasing marketing performance. Unit of analysis: firm Variable: marketing performance Different firms’ marketing performance may be different. Soft slide Definition of Variable Important 83  What is a Variable?  Anything that varies or changes from one instance to another; can exhibit differences in value, usually in magnitude or strength, or in direction.  What is a Constant? We don’t use it in research in study  Something that does not change; is not useful in addressing research questions. Types of Variables  Continuous variable  Can  take on a range of quantitative values. Categorical variable  Indicates  Also  membership in some group. called classificatory variable. Dependent variable   Important A process outcome or a variable that is predicted and/or explained by other variables. Independent variable  A variable that is expected to influence the dependent 84 variable in some way. Research Questions Important In order to achieve research objectives, researchers should develop research questions, and try to answer them through research.  Research questions are about the nature of relations among variables.  Examples of research questions:  What are the reasons of sales decline?  What are the drivers of customer satisfaction?  What are the relations between new designs and customer satisfaction?  Hypothesis    Important An unsupported proposition to answer a research question to be tested by research H1: Decline in the purchasing power of the clients decreases the total sales of the industry. H2: New designs increase customer satisfaction. Two type of hypothesis 1. H0 null .. Is the original theory that we would like to test 2. H1 …. Alternative Important An exemplary problem definition process     Symptons: our clients are complaining, they seem unhappy and we may loose them. True Problem: our clients began to percieve our products as low quality but still expensive. Research objective: to identify the ways to convince our clients about our products’ quality. Unit of analysis: individual buyers. Important An exemplary problem definition process    Variables: customer satisfaction, re-buying intention, product characteristics, customers’ demographics, etc. Research question: what are the drivers of customer satisfaction, what are the relations among customer perceptions about the product characteristics, customer satisfaction, and rebuying intention? Hypothesis: old fashioned products are percieved by the young customers as low quality. SECTION 5 BUSINESS RESEARCH METHODS Research Proposal Research Proposal   Very Important A written statement of the research design that includes a statement explaining the purpose of the study Detailed outline of procedures associated with a particular methodology Exploratory 1. 2. 3. 4. 5. 6. 7. identify the problem Objective Process/ research design Proposal Data Analysis Decisions Descript causal Constant Categorical dummy 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? Basic Questions - Basic Research Design    What types of questions need to be answered? Are descriptive or causal findings required? What is the source of the data? Basic Questions - Basic Research Design     Can objective answers be obtained by asking people? How quickly is the information needed? How should survey questions be worded? How should experimental manipulations be made? Important Basic Questions - Selection of Sample         Who or what is the source of the data? Can the target population be identified? The Population Is a sample necessary? all not part of How accurate must the sample be? is the study and Is a probability sample necessary? sample is part of population Is a national sample necessary? How large a sample is necessary? How will the sample be selected? Sample ,, random might lead to error so try to minimize the sample selection error Basic Questions - Data Gathering     Who will gather the data? How long will data gathering take? How much supervision is needed? What operational procedures need to be followed? Basic Questions - Data Analysis        Will standardized editing and coding procedures be used? How will the data be categorized? What statistical software will be used? What is the nature of the data? What questions need to be answered? How many variables are to be investigated simultaneously? Performance criteria for evaluation? Basic Questions - Type of Report     Who will read the report? Are managerial recommendations requested? How many presentations are required? What will be the format of the written report? Basic Questions - Overall Evaluation      How much will the study cost? Is the time frame acceptable? Is outside help needed? Will this research design attain the stated research objectives? When should the research be scheduled to begin? SECTION 6 BUSINESS RESEARCH METHODS Exploratory Research and Qualitative Analysis Exploratory Research and Qualitative Analysis 1. Definition of Exploratory Research 2. Why Conduct Exploratory Research? 3. Categories of Exploratory Research 4. Types of Pilot Studies 1. Definition of Explorative Research • Initial research conducted to clarify and define the nature of a problem • Does not provide conclusive evidence • Subsequent research expected “The cure for boredom is curiosity, there is no cure for curiosity that kills the cat” Qualitative versus Quantitative Important Research     Purpose: Qualitative preliminary versus conclusive Samples: Qualitative small versus large Type of questions: Qualitative broad range of questioning versus structured questions Results: Qualitative subjective interpretation versus statistical analysis 2. Why Conduct Exploratory Important Research? In research usually start with Qualitative then you move to Quantitative Diagnosing a situation Discovering new ideas Screening alternatives 2.1. Diagnosing a situation Situation analysis: the informal gathering of background information to familiarize researchers or managers with the decision area. Examples for situation analysis: •Interviews with employees about their general complaints. • Asking customers’ opinions about the new advertising campaign. 2.2. Discovering new ideas    In business decision making, generating new business ideas about new products, new investments, etc. is very critical. Managers, employees, customers, etc. may be consulted to develop new ideas that would never come to the minds of decision makers. For instance, users’ orders and complaints may help decision makers develop new alternative ideas and turn them into new product concepts. 2.3. Screening of alternatives    In business decision making, determining alternative solutions and then the best ones among them is very critical because of time and money constraints. Concept testing is a tool for screening alternative solutions, especially alternative concepts of a new or revised products. For instance, after collecting the opinions of the customers about alternative new product concepts, the best one may be determined. 3. Categories of Exploratory Research     Experience surveys Secondary data analysis Case studies Pilot studies 3.1. Experience Surveys  Consult with carefully selected knowledgeable experts about a particular problem to clarify the situation, not to develop conclusive evidence. “If you wish to know the road up the mountain, you must ask the man who goes back and forth on it.” - Zenrinkusi 3.2. Secondary Data Analysis    Preliminary review of already collected and/or reported information for a purpose other than the project at hand. Economical and quick source for background information Some sources of already reported information: literature, internet, company reports, etc. 3.3. Case Study Method     Intense and indepth investigation of one or a few situations similar to the problem via long term observations, interviews and discussions to define the problem at hand . Carefull study of the order of events as they occur, or relations among individuals or groups. Cooperation between the researcher and the subject is a must. Thus, studying rival companies’ cases is almost impossible. Generalization from one or a few case studies is very dangerous for decision makers. 3.4. Pilot Study    Any small scale exploratory study that uses some sort of loose sampling. A small number of respondents rather than experienced people are surveyed or interviewed. The results will be used in the definition of the problem and also in the design of a further descriptive study. 4. Types of Pilot Studies  Focus Group Interviews  Projective Techniques  In-Depth Interviews Important 4.1. Focus Group Interviews Interview Process:  Unstructured  Free flowing  Group interview  Start with broad topic and focus in on specific issues Group Composition:  6 to 10 people  Relatively homogeneous  Similar lifestyles and experiences Outline for a Focus Group     Establish a rapport Begin with broad topic Focus in on specific topic Generate discussion and interaction The Focus Group Moderator Develops rapport - helps people relax  Interacts  Listens to what people have to say  Everyone gets a chance to speak  Maintains loose control and focuses discussion  Stimulates spontaneous responses  Advantages of Online Focus Groups      Fast Inexpensive Bring together many participants from wide-spread geographical areas Respondent anonymity Transcript automatically recorded Disadvantages of Online Focus Groups     Less group interaction Absence of tactile stimulation Absence of facial expression and body language Moderator’s job is different 4.2. Projective Techniques  An indirect means of questioning that enables a respondent to project beliefs and feelings onto a third party, onto an object, or into a task situation “A man is least himself when he talks in his own person; when given a mask he will tell the truth.” --Oscar Wilde 4.3. Depth Interview •A relatively unstructured extensive interview used in the primary stages of the research process in order to get both the surface reactions and subconscious motivations of the subjects. •The interviewing session may last more than hour. •The interviewer asks many questions to the subject and probes for elaboration after the Disadvantages of Depth Interview • It takes a lot of time. • It is based on unstructured discussions, and -if inexperienced- interviewer cannot keep the discussion within the context of the problem at hand. • Collected information is just the subjective perceptions and interpretations of the interviewer. Important SECTION 7 BUSINESS RESEARCH METHODS Secondary data used in business publish data Example SAMA report Government report Company annual report Research Houses Secondary Data Exploratory Research and Qualitative Analysis 1. Definition of Secondary Data 2. Advantages & Disadvantages of Secondary Data 3. Typical Objectives for Secondary Data Research Designs 4. Classification of Secondary Data Important 1. Definition of Secondary Data Data gathered and recorded by someone else prior to and for a purpose other than the current project Is often:  Historical  Already assembled  Needs no access to subjects 2. Advantages & Disadvantages of Important Secondary Data  Advantages: ✓ ✓ ✓ Inexpensive Obtained Rapidly Information is not Otherwise Accessible • Disadvantages: ✓ Uncertain Accuracy ✓ Data Not Consistent with Needs ✓ Inappropriate Units of Measurement ✓ Time Period Inappropriate; Secondary Data may be Dated Evaluating Secondary Data Important Applicability to project objectives Does the data help to answer questions set out in the problem definition? Does the data apply to the time period of interest? Does the data apply to the population of interest? Evaluating Secondary Data (continued) Applicability to project objectives Accuracy of the data Do the other terms and variable classifications presented apply? Are the units of measurement comparable? If possible, go to the original source of the data? Important Is the cost of data acquisition worth it? Accuracy of the data Is there a possibility of bias? Can the accuracy of data collection be verified? Use data Important 3. Typical Objectives for Secondary Data Research Designs Fact Finding: •Identifying consumption patterns •Tracking trends Model building: •Estimating market potential •Forecasting sales •Selecting trade areas and sites Data Base Marketing (Data Mining): •Development of Prospect Lists •Enhancement of Customer Lists 3.1. Fact Finding Aim: to collect descriptive and comparative information to support decision making.   Comparing company’s data with (e.g. total annual sales) company’s competitors data and/or Comparing company’s present data with company’s own data in other time periods. 3.2. Model Building Aim: to calculate a dependent variable by using independent variable(s) having specific effects on this dependent variable.  First, facts about one or more independent variables are collected;  Then, the effects or ratios of these independent variables on the dependent variable will be specified  Finally, the dependent variable will be calculated. 3.3. Data Based Marketing (Data Mining) Aim: to dig through and analyze volumes of data to discover patterns about a company’s customers, products, and activities.  Practice of maintaining a customer data base  Names  Addresses  Past purchases  Customers’ responses to company’s past efforts  Data from numerous sources Important 4. Classification of Secondary Data Data can be classified according to the origin:  Internal Data  External Data 4.1. Internal Data Internal and proprietary data are more descriptive Examples for internal data:     Accounting information Sales information Backorders or rejected orders Customer complaints 4.2. External Data Data created, recorded, or generated by an entity other than the researcher’s organization Examples for External Data sources:  Government  Trade associations  Newspapers and journals  Libraries, Books and periodicals  The Internet  Vendors and Producers, etc. Important SECTION 8 BUSINESS RESEARCH METHODS Survey Research Survey Research Basic Definitions for surveys 2. Errors in Surveys 3. Classification of Survey Methods 1. 1. Basic Definitions for surveys Important Survey: a research technique in which information (prim ary data) is gathered from a sam ple of people to make generalizations . Prim ary data: data gathered and assembled specifically for the project at hand. Sam ple of the survey: respondents who are asked to provide information, assuming that they can represent (possess same features with) a target population. Selecting a Sample Sample: Subset of a larger population Important SAMPLE Sampling: POPULATION • Who is to be sampled? • How large a sample? • How will sample units be selected? Basic Definitions for sampling Target population: the group about which the researcher wishes to draw conclusions and make generalizations Random sam pling: selecting a sample from a larger target population where each respondent is chosen entirely by chance and each member of the population has a known, but possibly non-equal, chance of being included in the sample. Basic Definitions for data collection Surveys ask respondents (who are the subjects of the research) questions by use of a questionnaire. Respondent: The person who provides information (primary data) by answering a questionnaire or an interviewer’s questions. Questionnaire: a list of structured questions designed by the researchers for the purpose of codifying and analyzing the respondents’ answers scientifically. Advantages of Surveys : Quick, Inexpensive, Efficient, Accurate, Flexible way of gathering information. 2. Errors in Surveys 2.1. Random Sampling Error 2.2. Systematic Error (sample bias) 2.2.1. Respondent error * Nonresponse bias * Response bias 2.2.2. Administrative error * Data processing error * Sample selection error * Interviewer error * Interviewer cheating 2.1. Random Sampling Error    Even if randomly selected, samples may possess different characteristics than the target population (the likelihood of bias is reduced but still exists) This is a statistical fluctuation due to chance variation. Then, an important difference occurs between the findings obtained from this sample and the findings obtained from a possible census of the whole target population.   Consider the hypothetic case in which a study sample could be increased until it was infinitely large; chance variation of the mean, or random error, would be reduced toward zero. These are random errors. System atic errors would not be diminished by increasing sample size. 2.2. Systematic Error     Systematic error results from some mistake(s) done in the design and/or execution of the research. All types of error -except random sampling error, are included in this definition, Sam ple bias: a persistent tendency for the results of a sample to deviate in one direction from the true value of the population parameter. Sample bias can arise when the intended sample does not adequately reflect the spectrum of characteristics in the target population. 2.2.1. Respondent Bias  A classification of sample bias resulting from some respondent action or inaction Nonresponse bias Response bias Nonresponse Error    Nonrespondents : in almost every survey information from a small or large portion of the sample cannot be collected. These are those people who refuse to respond, or who can not be contacted (not-at-homes) Self-selection bias: only those people who are interested strongly with topic of the survey may respond while those who are still within the same sample but indifferent or afraid avoid participating. This leads to the over-representation of some extreme positions, but under-representation of others. Response Bias  A bias that occurs when respondents tend to answer questions with a certain inclination ot viewpoint that consciously (deliberate falsification) or unconsciously (unconscious m isinterpretation ) misrepresents the truth. Reasons of response bias   Knowingly or unknowingly people who answer questions of the interviewer may feel unconfortable about the truth that they share with others, and change it in their responses. They may desire to show themselves as more intelligent, wealthy, sensitive, etc. than they really are. 2.2.2. Administrative Error   Unadvertently or carelessly improper administration and execution of the research task Blunders are:  Confusion  Neglect  Omission Administrative Error Data processing error: incorrect data entry, computer programming, or other procedural errors during the analysis stage. Sample selection error: improper sample design (e.g. based on incomplete databases) or sampling procedure execution (e.g. executed in daytime while most of the target population are working) Interviewer error: mistakes done by the interviewer (e.g. taking wrong or incomplete notes about the answers of the respondents. Interviewer cheating: filling in fake or false answers indeed not given by the respondents. 3. Classification of Survey Methods 3.1. Structure of the questionnaire: * whether standardized questions with a limited number of allowable answer -multiple choices * or unstandardized open ended questions with the possibility of being answered in numerious ways. 3.2. Level of Directness of the questions: * whether direct/undisguised questions * or indirect/disguised questions to hide the real purpose of the survey Classification of Survey Methods 3.3. Tim e basis of the Survey: Cross-Sectional Study: data on various segments of a target population are collected at a single moment in time to make comparisons among segments. Longitudinal Study: data are collected at different times from the similar respondents to compare trends and identify changes. Panel Study: A longitudinal survey of exactly the same respondents to record (in a diary) their attitudes, behaviors, or purchasing habits over time. 3.4. Com m unication w ith the respondents Classification of Survey Methods 3.4. Com m unication w ith the respondents: Qustionnaires administered by an interviewer * Door-to door interviews * Mall intercepts * Telephone interviews Self-administered questionnaires * sent by mail, fax, or e-mail * Internet questionnaires Type of data Very Important 154    Cross sectional data .. Data collected at one point of time Time series .. Data varies by time data like GDP etc Panel data … is combination of both Cross sectional & Time series like banking data from NCB and SAAB etc data related to loan per bank per year 
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