Unit III Problem Definition and Hypothesis Formulation Business

Unit III Problem Definition and Hypothesis Formulation Business Research Methods School of Business, FMS, PU

Concept of Problem • If the management or concerning people feel this is difficulty and it needs to be solved, that is called problem. • Research problem is a situation that needs a solution. It is a description of an issue currently existing which needs to be addressed. • The explanation of research problem helps to provide a context for the research study and generates questions which the research aims to answer.

Concept of Problem (Contd…) • A problem does not necessarily mean that something is seriously wrong with a current situation or with the organization under study. • The management problem becomes research problem when management of any organization decides to find the cause, effect and solutions of that problem in systematic way. • The main purpose of formulating research problem (i. e. statement of problem) is to decide what you want to find out about.

STATEMENT OF THE PROBLEM This section is very important in the research process as it guides all other aspects of the research. This section should also be presented in normally three paragraphs: • Paragraph 1 – Background of the problem – It describes the background of the problem such as how the research problem has emerged. It describes issue to be investigated. • Paragraph 2 – Various factors or situations contributing to the problem. Describe dependent and independent variables. • Paragraph 3 – Problem statements in the form of research questions with interrogative sentences (? ).

Pattern of the content of the Statement of the Problem Research Questions Factors/ situations affecting the problem Background of the Problem

Characteristics of Well-formulated Problem v Should raise the questions about relationship between variables v The relationship between the variables should be stated and explained clearly v The problem statement should suggest a method of researching the questions. The problem statement should thus be precisely stated and the methods should be determined by the explanation of problems.

Steps in Problem formulation • Step 1. Collect Preliminary Information (Review the literature and observe the situation) • Step 2. Situation Analysis • Step 3. Identify and raise specific research issues and subissues that you would like to answer through the study • Step 4. Identify the variables and their possible relationship (positive, negative , linear or non linear etc. ) • Step 4. Translate the research issues into research questions and general & specific objectives for the study.

THEORETICAL FRAMEWORK • This provides theoretical basis of research. Every research needs to be based on an existing theory. • Such a theory should be explained in this section. • This is important in pure or fundamental research. • This section has the following three key elements. Ø Conceptual description based on available literature. Ø The variables considered by the study. Ø Nature of relationship between the variables in the form of a flow diagram.

The Problem. Process Definition Process The Problem-Definition EXHIBIT 6. 2 6– 9

1. Understand the Situation • Situation Analysis Ø The gathering of background information to familiarize researchers and managers with the decision-making environment. • Interview Process Ø Develop many alternative problem statements Ø Think about possible solutions to the problem Ø Make lists Ø Be open-minded 6– 10

2. Identify the problem from symptoms • Identifying Symptoms Ø Interrogative techniques v Asking multiple what, where, who, when, why, and how questions about what has changed. Ø Probing v An interview technique that tries to draw deeper and more elaborate explanations from the discussion. 6– 11

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 .

Organization Twenty-year-old neighborhood swimming association in a major city. Symptoms Membership has been declining for years. New water park with wave pool and water slides moved into town a few years ago. Problem Definition Based on Symptom True Problem 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.

3. Writing Managerial Decision Statements into Corresponding Research Objectives • Decision statements must be translated into research objectives. Ø 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. 6– 14

EXHIBIT 6. 5 Translating Decision Statements 6– 15

4. Determine the Unit of Analysis • Unit of Analysis Ø Indicates what or who should provide the data and at what level of aggregation. v Individuals (such as customers, employees, and owners) v Households (families, extended families, and so forth) v Organizations (businesses and business units) v Departments (sales, finance, and so forth) v Geographical areas v Objects (products, advertisements, and so forth). Ø Multi-level analysis studies variables measured at more than one unit of analysis. 6– 16

5. Determine the Relevant Variable • What is a Variable? Ø Anything that varies or changes from one instance to another; can exhibit differences in value, usually in magnitude or strength, or in direction. • Identify dependent and independent variables • What is the relationship between the variables? 6– 17

6. Development of Research Questions and Hypotheses Components of the Business Research Problem Theoretical/ Conceptual Framework Research Questions Hypotheses

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

The Research Process • You have decided on a research problem that needs solving Ø Through the development of an argument, a problem statement will be developed that will articulate the problem Ø A statement of purpose (summary of overall goal) is sometimes presented Ø Research questions are posed (queries to be answered) Ø Hypotheses are stated for testing

Research Questions • Statement of the Problems in the form of questions with interrogative sentences (? ) is called “Research Questions” • Research questions are those questions which are asked to researcher himself. • Answer of these questions is our findings. • Research questions are generally asked in WH form. • A research questions is defined as a statement that identifies the phenomenon to be studied. • Example: 1. What factors are responsible for the growing rate of employee absenteeism? 2. What can be the impact of remittance in uneducated household?

Cassifications of Research Questions 1. Descriptive Research Questions: when a study is designed primarily to describe what is going on or what exists is called descriptive research question. § Example: What is the current state of quality of work life in Nepalese commercial banks? 2. Relational Research Questions: When a study is designed to look at the relationship between two or more variables. § Example: To what extent are pay and productivity related in Nepalese business enterprises? 3. Casual type Research Question: When a study is designed to determine whether one or more variables causes or effects on or more outcome variables. § Example: Do the demographic factors of employees affect their organizational commitment?

Research Questions and Hypotheses • Research questions (RQs) are refined statements of the specific components of the problem. • A hypothesis (H) is an unproven statement or proposition about a factor or phenomenon that is of interest to the researcher. Often, a hypothesis is a possible answer to the research question.

Hypothesis • An unproven proposition • Logically conjectured statements about relationship between the variables • Purposes expected relationship among variables • Hypothesis is a proposition that is empirically tested • Tentative assertions that are subject to testing • Hypotheses are declarative and more specifically related to research operations and testing.

Research Hypotheses and Research Objectives • Research Hypotheses: Declarative statements in quantitative research in which the investigator makes a prediction or conjecture about the outcomes relationship. • Research Objective: A statement of intent for the study that specifies specific goals that the investigator plans to achieve in a study. 25 l

EXHIBIT 6. 7 Influence of Decision Statement of Marketing Problem on Research Objectives and Research Designs 6– 26

RESEARCH OBJECTIVES • General/overall objective: The overall broad objectives of the research in the form a brief paragraph. The general objective is derived from the focus of the study. The topic can be general objective. • Specific objectives: Precise objectives of the research preferably numbered. The specific objectives need to be consistent with the statement of problems (research questions).

Choice of Action Verbs for Objective • Specific objectives are written starting with action verbs. The choice of the action verb is critical as it determines the intensity of the research. • The following provides some of action verbs that are acceptable in research works. • The action verbs are presented with increasing level of intensities.

Acceptable Action Verbs • To explore • To measure association • To identify • To measure relationship • To examine • To estimate • To evaluate • To forecast • To analyze • To predict • To compare

Unacceptable Action Verbs • To study • To recommend • To find out • To review • To explain • To make an overview • To describe • To see • To conclude • To look into • To diagnose

Concept and formulation of hypothesis Hypothesis: Hypothesis is a working assumption or conclusion about the relationship between different variables that drags the researcher towards the fact. § A hypothesis is thus a statement about the relationship between two or more variables which needs to be investigated for its truth. § If the relationship between two variables is found as the hypothesis predicts, then the hypothesis is supported and the new theory has been suggested. § In short, a hypothesis is a formal statement that predicts the expected relationship between independent and dependent variables.

Hypothesis Formulation Review of literature Observation Hypothesis Theory

Types of Hypothesis • Descriptive hypothesis: it contains only one variables so it does not present the relationship between or among variables. Generally it describes the situation. For e. g. sixty percent shareholders of the company are in favor to increase the stock dividend. • Relational Hypothesis: it explains the relationship between two or more variables. Furthermore it is classified into: Ø correlation hypothesis and Ø causal hypothesis.

Directional and Non-directional • Non directional hypotheses : it shows the relationship or differences between variables but not direct the relationship between two variables. But relationship between variables may be positive or negative that can not be declared. For e. g. There is relationship between working conditions and job satisfaction of employees. • Directional hypotheses: We state the direction of the relationship between two variables. It is formulated using the words more or less, likes and dislikes or comparing two variables. For e. g. female employees are more loyal than male employees. 34

Null Hypothesis (H 0) • It is the hypothesis of no difference. • It assumes that there is no true/significant difference in the sample statistics & population parameter or the difference is due to sample fluctuation. • Rejecting (H 0) indicates difference is statistically significant. • Accepting (H 0) indicates difference is due to chance. H 0 : Ǿ = Ǿ 0 • H 0: There is no significant difference between the two drugs on average. • There is no significant relationship between age and job satisfaction. 35

Alternative Hypothesis (H 1) • The alternative hypothesis is a statement of what a hypothesis test is set up to establish. • Opposite of Null Hypothesis. • Frequently “alternative" is actual desired conclusion of the researcher. • It is the hypothesis that has to be accepted when H 0 is rejected. • H 1: The two drugs have different effects, on average. • There is significant relationship between age and job satisfaction. 36

Criteria of Good Hypothesis • Simplicity • Clarity • Testability • Relevant to problem • Specific • Falsifiable • Specifies Relationship • Operational 37

Functions of Hypothesis • Provides focus to the study • Provides structure to the study • Shows the area of emphasis • Provides guidelines for collecting data • Informs about area of subjective priority • Basis of research • Helps to test empirically

Essence of Hypothesis Testing Hypothesis should • Be stated in declarative form • Describe a relationship between two or more variables • Be testable • Be operational in that there should be no ambiguity in the variables 39