Fielding, N., Lee, R.M. and Blank, G. (2008) The SAGE Handbook of Online
Research Metlzods. London: Sage, pp. 177194.
Goldie, I. and Pritchard, I. (1981) 'Interview m0tho<lology comparison of three
types or interview: Onetoone, group and telephone interviews', Aslib
ProcePdings, 33 (2): 6266.
King, N. and Horrocks, C. (2012) l11tenE/ews m Quafitati11e Research. London: Sage.
Mikec:t., R. (2012) 'Lnterviewing dites: Addressing mf'thodological issues',
Qunlirariue ln171tiry, IR (6): 482493.
Quinlan, C. (2011) Business Research Methods. Andover: Cengage J.e;irnrng
S;iunders, M.N.K. and Lewis, P. (2011) Doing Research in Bminess and
Management; /\n EssenHal G1lide to Pla1111int YIJUr Project. Harlow: Prentice l lall.
.
'
I
..
lntroduc+ion
..
E
l
(
'
This chapter hegim hy defining the nature.: of sc..:rnnJary data I then examine
reasons th,H m,1) lc..:aJ you to b.m your rro1ect entirely on secondary Jata. At one
level, this is often detennint>d by the assessment regulations laid down by your
university or rnllt>ge. However, othe1 fauors may also influencc..: your decision. We
examine thest: later on tn the Lharter. Ne.xt, Lhe advantages and J1sadvantages of
,;;ernndary data art: presented. Unsurprisrngly, time is cited as a major aJvantage. The
plethora of eleclron1L i.ources ava1!:.ible has made searching for seroncla1 y Jata all
the e::is1er. Nevertheless, there an: notable disadvantages, anJ thest> reu::i, l' similar
,ltlcnlion.
Nonnalivt: English speakL'r:, and thoe who are ahle to rt>ad languages other than
English w1ll be nbll'. to use foreign language sources. Tlus ot course applits to many
international students. Thus, I havl'. included a section in the chapter that highlights
somt> of the issues surrounding the usage of foreign langungl:' our,es.
The availahility of crnndary Jata is a real rnncern to l>tut.lent researchers,
Unduuhteilly, your institution\ lihrary will contain a wealth of sources. The degree
to which Ull'.Sc corresrond with your research t.ll!pends on the nature of your topic.
fn some cnses, you may need lo access more specialized data. I will llwrefore make
recommendations as lo how this can he achieved.
Tht> conch1d1ng part of the chapter t'xamines lhe evalual.Jon and presentation
of st'condary data '1 he ability to evaluate secondary data is essential, not least to
detL'rrnine the dt>gree of relinbility Also, if you have amassed a huge amount of
data, how du you know what to indl1de and what to omit? One way is to cor1siJer
the folk,wing data evaluation factors  purpose, scope, authority, audience am!
format. Addressing 4uel>Lions associated with each of these five factors shot1kl
make the evnluat1on process easier. N<.!xt, 1 provide a relativtly hnef overview of
how to rresent secondary data. Often, it can be presenteJ in iL originaJ form, or
you may wish to rresem thL' data in your own way. As tl1erl'. is very little d1sunclion
hetweeu prL'l>enting st>rondary and primary data,] pay gre:iter attention to present
ing data in Chapters 9 :ind l U Finally, we examine how to link p1im.1ry data with
secondary d[lta.
data collert1on. The amO\ltll of ex1ting Jata ..waibble 1s 1usl ont> rt>ason that may
1110uence your deLision to focus soldy on secondary data. I discuss other reasons in
Ull' next seLtion
rirst, your choice of rL'searrh design may inJ1ucnce your decision wht>ther or not to
conducl a projeLt based exclusively on secondary data. If; for example, you plan on
undertaking a long1tudinal study over several years, this will not be feasible using
primary research. However, you may find that there are exisllng longitudinal studit>s
relevant to your chos<'n topic. This would allow analysis, perhaps even comparative
analysis, of ex1ting studiL'S.
/\nother t>xamplt'. is using R case study research design based entirely on sernnJ
:iry data. Let us say that you are concerned with a comparatiw analysis n[ LhL' i.I1tr
nalionnlization strategies of two of the UK's leading surermarkets  Tesco and
Sainsb ury 's. You may argue that existing rnmparat1ve studies have already been
unJertakL'n hy other rt>sea.rchers, in which case Lhl' nature or your research is to
compare and contrast existing data.
Realislically, financ.ial and time constraints make undertaking mternationa.l or
crossrultural resea,Lh difficult for student J'esearchers. Nevertheless, this does not
USING SECONOARV DATA
O rganiza tions also need to decide how to incorporate secondary data into th eir
research. For example, if a company is about tu launch a new product, it will run a
marki.:t survey to collect primary data and gauge customer reactions; if it wants to
evaluate general econornk activity in an area, it will use secondary data prf'pared hy
the govf'ro rnent (Waters, 1 997: 73).
In husiness, there are two broatl classificalions of secondary data  i11Lental and
i:xtenzal data. Examples of internal sources i nclude customer records, sales invoices,
previous market research reports and mjnutes from boa rd meetings. External
sources tend to he more varied. T11ese include everyth i n g from com retitors ' prom o
ti on al broch ures lo governmen t reports.
Classifying secondary data on the basis of internal a nd external sources makes
sense when cunsiJc.:ring atl organizational perspective. Yet, how does t.hls rdatc to
the student researcher? Arguably, a onesizefitsall definition is neither practical
nor possible. The majority of st1 1dents do not h ave the privilege of access to internal
company data. Morf'over, not all students engage in organization ally hased rf'search .
Therefore, I propose a ' studentbased ' classification of secondary data l ater in this
chapter.
Small organizations have a propen1>i ty to use mainly secondary data when con
ducting market resea rch . Fo1 example, th.is may incl ude information from trade
magazines, art.ides in the local press and internal data . O n e of the reasons for this is
that many do not have the resources to engage in primary researc h . Where prim ary
research ls undertaken, this tends to be conducted on an i n form al basis.
Unl ike small firms, l arge organ i;,;ations often buy in secondary data , or rna.iling
Lists, from specialized agencies. To i llw.trate1 lel uli ay that a tyre manufacturer
wishes to promote their tyres to Frcnd1 car dealcrs. lf' no published data are available,
191'J ESSENTIALS OF BUSINESS RESEARCH
then one option is to buy the data from a specialized agency. Th.is is costly, of c.ourse,
and does not gu aramee a high re1ipone rate. O ther rotential problems arc associated
with h uying in data . l'irst, secondary data soon hecome out of date. 'l11is is also a
conl:em with i nternal data such as customer records. Relying on such data ran help
maintain close customer relationsh ips, b ut it needs to bt: upduted regularly.
Second, alt.hough buying in data can he fllltentially rewarding, t.l1e data have to
be correct. 'J'bere are likcly lo be literally thousands of data lists ava ilable. Compa
n i es that fa il to buy from a reputable source may find that the data do not meet
tht!ir l!xpectations, rartkularly i n terms of reliabiliLy and validi ty.
Third, secondary data huugh t for the purpose of direct marketing activities are
unl ikely to be exdIDiW to one organization . This is especially true in businessto
business markets, where several compan.il!s compete tor a small number at customers.
I n sum, for many organizations intent on promoti ng their products and sei vices,
secondary data can be R u:,eful wiiy to target potential customers. Howevet such
tlata have several limitations: they soon become <la led; it is sometimes difficult to
verify the credibility of a source; and competitors have acces:; lo the same data.
191
o n sPcondary Jala, yuu need Lo mnkP a dear disli.Jltlion in your rese::irch belwPen
f
your litcr3 ture revi ew a n d an alysis. Students someti me!, find t.hh dJ F 1cu l t . ln
essenre, your liternlure review is like l y to be one or two chapters a.nd will come!
before yuur secunJa.ry a n a l ysis. U nlike you r literatu re review, secondary rlata
arrnlysis may involve using prevtously puGlished survey data as the focal poin t for
your an::tlysis. J\ltern ::itively, Lhe m a i n focu: migh l bt o n a particular case or rmu
liple ca.ws which co uld also feature publ ished su rvey data . In short, e1ther of these
approach es is hel pful l n maintain i n g a distinction between the liteniture review
and analysis chapkrs.
Whereas your literature review may describe your chosen survey, an<l compa re
and contnit similar studies, your secondary analysis is likely lo involve a delai.led
analysis of your r,.h osen survey. Tyrically, this might form the basis of one ch apter namely your an alysi. nnd results.
Remember lo j ustify yo u r thoic:e of survey. R easons m i,ght include: t.he repula
tion of the souro.:, the contemporary nature of t.he sL1..1dy1 thf' i;a m ple iL.t:, or simply
th at ft 1s the only recognizabl e stlldy conducted in your area of research.
..
l,
r.
Secondary data
E!ci:
l=lectronlc formal
Commerciel
audience
Government websites
Multilateral
orgA11izsllo11s
Company woositos
FIGURE 7
19
Academic
audience
Acaclami journAl!i
Conferenco papers
Book reviews
eronaarv tl,,t
FI Prtronic format
' Electronic data' refers to datA prPsen ted in elt,trnn 1r form rit, such as I n ternet weh
,i te<;, A<i n ond in this chripter, In ternet wehsi te ::i re An incrl;'esi ngly ropu lar source
nf l itf'rnture for st1 1dt>nt.s, hul the [n lemel i!i hy nn nwam the only ource of elec
tronic data. Other poten tial sources for yllu to considcr un: DVDs, videos a nd audio
rnt'!J ia. These can indudc an orga nization's inhouse training video, prnmot1onal
materials for a multinational company, an audio recording of a rAdio i nterview with
a company director or even nn Rudin hnok. Although the l a ttPr may seem an
unli kely so11rce for y01 1 r research, occasionally you may find inval uable data that art:
on ly availah lf' i n one particular fonnat.
The main advantages of electronic data arc thal they save tirne because they arf'
easily accessible, and can be: easily stored. Indeed , gone arc the days when tudent
researchers were forced to keep several lever arch Hies of releva n t ani cles. l rt>m em
ber thl:'m weU !
Ti:ihl P 7 . 1 provi rles a l ist of useful gnvemment wehs ites, mu lti lateral organiza
tions and gf'neral husin essrelateJ sites thuL prove popular wilh Gusiness stutlents.
Tn :a<lw tinn , the A merican Marketing A!.sucialion (20 1 3) provides a coniprche.n sive list
or declronic data sources.
Flr:>ctroni format  wrpmercial aud,rncr
Electrnnic soLt rces geared toward a commerciaJ audience incl udf' mul til aler:J organ
ization and government websi tes. The former are particularly useful for students
TABLE 7 .1
Written formal
Commercial
audience
Bulnoss dlroctotles
Trade magazines
Broadsheet
newspapers
Company reports
u'.,
Textbooks
Lecture notes
l?l Cl n ,
,t 1
,(IL.I
Source
Web address
summary of information
www.wto.o1g
Data on
www.oecd.org
www.imf.org
Publishes a
Eurnean Union
www.europa.eu
Rnancial Times
www.ft.com
Tile Economist
www.ernnomlst.com
Business WPP.k
oEro
Aeildemlc
au<Ji!lnce
fUl
Dun &
Bradstreet
www.dnb.com
Dally
World Bank
www.worlclbank.org
Tile Guardian
www.guardian.rn.uk
A leading UK newspaper
USING SECONDARY DATA
193
case studies. You may <leciJ1: that inforrnation from Lhese cac;es can be ltseJ as pa.rt
of your s1:w11Jary analys1s.
LPr:;'' f<lSC':.!"ceirtPn' i\ P
Writtpr format
I)
'
"'
,.
Written data refer to data that are printed in hanlLOpy format . The main l!xam
ples of secon<lary data arc the more 'traditional' published sources, SLich as text
hooks and academic 1oumals Ostensihly, we will rootinue to sec a shift away from
traditionaJ publishing to electronic format. This has certainly bcc.n the case in
lrms of publishmg and arcessi.ng academic journals in recent years. Althollgh
your university or coUege library is likely to bold both electronic and hare.I copies
of academic journals, once again nccessing them electronically saves tune and is
easier to organize.
Can allo1
di 'rice
Academic data in written format still tend to include textbook:; and lecture notes.
The funner an.: an essential source of data for students, as module!. are oftf'n st1 uc
tured on a particular key text. Both textbooks and lecture notes can make worthy
contributions to your research. For example, many textbooks feature contemporary
19
Another advan tag uf secondary duta is that they can be compared to your primary
findings. By c.omparing your primary data with your secondary sources, you can
determine the extent to which you agree or disagree with existing studies. For
examrleo, 1f you consider a study into cnr ownership, you may find that . 11atwnal
study suggests a possible downturn in the market However, a questionnaire survey
of car owners in your area may gcnerah contradictory data.
Secondary data also enable crosscultural or international comparative research,
as they help to overcome the obviou\ limitations associateJ with primary data L'Ol
lection. The Economist lntl"Jligence Unit (El U) provides country data that ca11 be
used exclus1v('ly or on a compnrative basis.
195
are ideal il the noture of your rt'sPa1 ch is to examine JcniographiL changt> and/or
rorulation grn,vth, hut a,e u11suitahle it ynu want to t''<plore customers' purchasing
dec1s1ons, for instance.
Enc::ilv
Fin:ill. se1.ond.uy d.:1l:1 foulit:itt a(ces:. for olhl.'.r rcse.1r1.hcrs interested in ym1r area
ot resea11..h Many reseoidwrs rely on <;('condary data Therefon:, hy making refer
ence to sernndary sources you arc likely to a1d other rt>se:irchers engageJ in Jeveloping thPir own research.
'
"1
t.'
......
Often, you will find that highquality anJ n.liahle sernndary data are difficult to
aLccss. Examples induJl' certain types of go, l.'.rntm:nl Jat:i anJ internally proJuccJ
org:.inizatwnal data. The rnain reason that acct:ss to th1s type of Jata 1s generally
restricted is largely due to its sensitive nature. Normally, the only way to gf't hold of
surh valuable ciRt::i is if you wurk for the organization that prmluLeS them. F'ven
then, acessing such data can still prove J.ifficult!
The cost of au:essing c.lata is also a di.suJvantagc to student researchers. On many
occasion students have tolJ me that they have founJ an l:xcdlent rt'port onli.ne, but
obtaining a copy usually involves a suhscription fee 01 a si:lcablc oneoff payment.
You may believe you have a suffic..ient amount of data, hut re.member that second
ary dat,1 arc data th.1t have bef'n collcL"ted by othe1 ind1v1duals or orga11iz:1t1ons !or
their own rurposes. Sud, data my not therefore answer your research 4uestions.
n,H: 11lt tr
l13h,l,h.,
In gene1JI, tht' oh1lity to Jt>terminl! whether or not se<ondary cfata arl' rt>liAblc is
largely clow11 Lo the so11r1.c. Ct>rta!llly, al ::iclemic journals otter high levels ol n"l1al,il
ity, as do estabhsheJ husrnesi. puhlications such as the Haman/ Busine.s Review and
Tire Eco11nmist The main problem tends lo ht> with the mort> nhscun p11hl.iu1tions
and websites.
Son1ctimec;, it c..ru1 he argued, Ult> lullltation assoc1ateJ with reliability can be
ovPrrnmc by using a varicJ range of secondary sources. 13y way of illustration, in their
artidt> into annual working hours in Bntain, G:ill and Allsop (2007: 801) juslity the
use of sernndary data by making refe1ence to the ahsenu of iaodarJized and long1tudinal d::ita ln aJdition, the authnrs abo indude a wide range of secondary sources:
Tlw mutl'rial to1 this n1arrh 1 Jlrivecl from a m1mher of Sl'conda1 \ suurci>.
uch ,1s till' ruhlu ,H 1um or the AJn,ory, C \me 1'1at1on and Arbitration Scrvi(P
(ACAS), 1111.:uml s Data 1.:n1us llDSJ, lndustnal H.d.1t1nns SLniLl's (IRS),
L.1hour R1searcb Dt'partmi:nt (I.R [)) :.incl the Institute uf P1rso111\l'I Mnn.1gL'
mt>11t (lPM)/Cha1 ll'rl'J Institute nf F'C'rsonnt'l M:rn:igt'mcnl (C'TPI )) as wt'!( a ...
Ll.l\l'rage of salit'nt rkvek,pmPnts in tlw qualit, pres lik1 t!H Fi11,111fia/ Ti11lt's
,rnd The G11i1rdia11 Jml n111011g rt'g1onal dad; hm;1dslwcb. Whilst tlJL'n' .1r..: a
numb('r ol weak11esvs 111 the 10bustness ol tht.: Jat:1 ge11cn1tPd 11Sing such :i
m<'thod, this dat:i 1.a11 help s11ppkm1H nther dat.1  \\h1t.!1 itstlt 1s nut with
nut wi>ak11l'sscs so that a fullf"1, multi n1mpnnenl ricture <,r annual hours
Cllll lw built 11p
The sernndary dat::i cited 111 Gall anJ Allsop's article may not be fomiLar to you
These inclt1de puhlJCations from publir sec lor bodies, professional boJit>s, and
regional and notional n<"wspapers.
'"' ?
mar
,..,.,..._,I p fnrm
Data tnat have experienced l1ttle, if any, processing are referred to as m.1.1.1 dnrn,
whereas Jata that have received some form of procec;sing nr summan7tng are
known as compiled 01 c:uulud data. For examplt', a suctcssntl dot.com company scll
lllg books anJ musk CDs online might collect h11gt: volumes or sRlesrclated raw
data each dlly, but SL1ch data are not very usful until thev have hee11 anJlyzed 1
interpn'ted and presented in a manageable for n1. Once processed, this type of data
might be used for analY7tng sales trends, launching a targeted sales promotion cam
paign or simply analyzing the most rrofitable lines. T.ibles 7 2 and 7 .3 show raw
data and cooked data respectively.
USING SECONDARY DATA
97
TABl E. 7 2
An rx
Amount()
Transaction no.
42.96
20.99
11.50
13.75
101293
101294
101295
101296
lABLE 7 3
An ex
Mon 73 March
Tues 24 March
Weds 25 Mi!lrch
Thurs 26 Marc/I
C.
l ( 001\t'd)
Date
1ri 21 March
Sat 28 March
sun 29 March
WTA/ far week
the World 'lra<le Organization that includes quantitutive,a statisti1.:al data 'iuLh as
GDP figures and qualitalivt' analysis in thf' form of C]Uotalionc; from le,aading eco
nomics experts.
In one sc.:nse, arplying a wiJe range of scrnndary sourres is a good tlung, hut you
mu!>t enc;ure that you can comparL your findings on an equal footing. Comparability
is often a problem when mt<'grnting and examining data from different sourrei.. Oif
ferenres may occur in the following aspect,;:
35,000
18.W,
17,234
29,108
n,400
39.100
34.750
22,950
14.750
28,250
21. 750
38,250
11.500
12,240
173.427
172,:200
Difference (+I)
t250
4,605
; 2,484
+858
1650
+850
+740
+1.227
Compa"'q'J'' ih,
Onf' final disadvantage with secondary data is comparability. I have nlready men
tion ed that an advantage of using secondary Jata is that data can be compared
with your pt imary findings. l lowever, if you are engaged in exclusively secondary
<luta, then this option is not Opl.'11 to you. Of course, your secondary data may
include both 4ualitative and quantitative data, e.g. a country report published by
ESSENTIALS OF BUSINESS RESEARCH
T Usa"'
If you have the capability of reading toreign langw1ge sources, then this is dearly an
adva11tage as it allows you to consult a wider mngi> of secondary sources. In addition,
if you a,e an international stuJent, then you are likely to UL familiar with secondary
sources in your home country that might prove useful for your research. for Pxam
ple, given that cme of my areas of research is the internationalization of' Chinese
brands, I tend to supervise several Chinese students. I always streoss to them the
unportan,e of consulting hoth English and Chinese sources. This is partly because
some secondary sources from different countncs make for an interesting compari
son, hut al!>o using secondary data frorn different countries can help to improve the
validity oJ your results.
I Tow Jo I refert'nce foreign language sources7 To some extent, conventions here
vary depending on the referencing system. Often , nonEnglish sources arc treated
the same, w1Lh <lirect quotes translated into English. lf you are translating the te,..t
yoursdf, onr way to illustrate this is by insertmg 'translation by the author' in brack
ets ofter tht> quote. For exampli>: 'Wong, 2012: 14, translation hy the author.' Again,
you will prnhahly finJ that there are !>uhtle variations of this approach, so if in
doubt cheLk with your projcc:l supervisor. In terms of how to reference the sourre
m your reference list, typically, the reference will include the title of the book or
article 111 the original language, followed by the English translation in brackets.
USING SECONDARY DATA
99
'
!I
.
I
A<;tan states, thf'fe may be cultural s1m1larities Hence, you may n.ot wish to cl.beard
the research in the first instam:e.
Scopf' cnvers such quAlitif's as the age and the amount of data available, whether Lht>
information is up to date, how frequently data are updated, what period of lime
they Lover, how information is presented, etc.
Pwpoc:p
Auh'lriht
The main point to consider here ii, the xll Lo wb.ic.h the purpose relatf'S tn your
own research. lt Joe, noL necessarily bave to be a 'perfect .flt' lf, for crumple, you are
conJucting research into cultural differences between Japanese and US consumers,
you may find that a similar study focusing on VS and South Korean conswncrs may
be of rclcvance, One might argue tbt as South Korea and fa1111n Are both SouthEast
<::"')re
l\udierr'l
C.,
'
TABLE 7.4
t u, t111 Inf
Evaluating factor
Purpose
Scope
Aulhurity
Audience
Format
n l 011
Questions
Why does the information exist?
What is its purpose?
Does it ac.hieve Its purpose?
How does its purpose. affect the typr and bias of the information presenletl?
Haw does it rel.ite to lhe purpose of my own research I
Haw old Is the information?
llaw often Is it upllated 7
How much inrarrnatlan is available?
Whal ;;ire the criteria for inclusion7
lf applicable, wl1at geographic area, time period or language doC!s it cover?
How tloes Lhe information presented compare with sirniliir information
sources?
What are the credentials of the author, institution or organization 5ponsaring
thr. information?
To whom is the lnrormatlon targeted?
What level or knowledge or experience Is assumed?
How does the intended audience affect the tYpe and bias 01 tl1e Information?
How quickly can you rind the required information?
How eav to ue is me Information source?
Is there an Index?
Is the Information downloadable into <1 spreaclshEier or wordprocessing
pr()!;r.im if desired?
The intendf'd audif'nc:f' is a good indicator of the natu1 e and qualily of the data.
Ch,sifying your JaLa on the basis of uimmercial and .:icademk contf'nt n111 hf']p you
to form a judgernenl as to ils appropriateness for your research.
F rmat
The format of the data [f'.g. whethf'r on bard copy 01 in ru1 electronic ve1siunJ Jic
tales the ease with which you can access and interpret the d::ita. Does the layout
make it easy for you lo finJ whaL you neeJ, for examrle? Can you conS11lt an Index?
Of course, if the darn arc vital to your resear<.:b, you will want to use them irrespec
tive of format.
In sum, it is sometimes d1ftlrult to evaluate secondary Jata. The source may be
rdatJvely unknown  even your supervisor may not be aware of its ex.istencd My
adviu: i to Lry Lo use secondary Jata From estahlished sources, which can be verifled
in some way. l.n gcnt::ral, if l:t source i.s unknown and cannot be verified, then it is
probably best avoideJ.
201
TABI E 7 5
1999
Type of Investment
lolnt venture
WFOE"
lotal
H1v tn I in Prirrrv
rL I V WI
2002
Value (m)
Value (m)
No. of prolects
65.178.5
72.821
88,456.3
5.430
18.676.2
65,683
83.804 I
9,073
81,894
116 .166.B
No. of projects
60.253
21 ,710.5
' NI
..ur.
.
c h art sl1owmg a br e.1kdown uf t.he UK',; exports b y
Fi,u:wcwl Timl's pub l 1s I1e d n pie
. .
. .
intlustry, you could probably reprotluce this in its o r iginal form at, p r vu.lin g it 1
proper1 y sourc ed , Of, cours" However, i f the .1rticle only quotes t>xpu rt figures, thl:'.n
you wou.l<l need to coru.itle.r presenting the data i n yollt own way.
Tahle 7 5 illustrates the use of s econtlary clata in its origi nal fo rmat. You do not
m't>d to concern yourself with the actual topic. The pomt I am Lryi.ng o make hen'
is that tables, cha, ts and graphs an: ideally su1 te<l to mnny eseorch p roiects. lndced,
Lhcy can tnrm an importan t part of your seLOntlary analysis.
Presenting seron dary Jata also i ncl u<lcs qu l ital.ive data . Le u s y tha t you
intend analyzing secondary data in the rorm of leaJing economists view on the
global economy. As you are analyzing qualitative secondary data, you may i l l uslratf'
Lheir view,; hy quuung tht>m directly.
. . . secondThere arl:' nu mero us ways of analy7 i n g qualitative a n d qu a n t1tat1vc
ary cl a t a 1 n r".."li' ty, m any or thel>e tech n iques a re equally appl i cable lO primary
.
.
.
. Ch ap te r,s
to t h i s top 1L 1n
ti ata a n aI ys1 s I w ill therefore devote grea ter attention
9 and l 0.
Vnt r Projprt
II
Prvic:.nr
=lnd
Pr
rfary D ta
When a student wishes to see me to Jiscuss concerns ovf'r sernndary data, it i i.u '
First 1 the swdent has been u nable to locate sufficient
a l ly r1or onf' o f two 1esons
, they have aathereJ copious amou nts ol d ata b ut a re
,
. rces. Second
sou
:l
seconcary
"' .
. . cover ed
. . chap te, r, I have
uns,1re what to givt> prorninenLe to in their n:seMch . In Lim,
both these points at some length .
B Y 11 Ow, Yo u should
be aware of just how i m port:.i nt your supcrv1so1 ts to y o ur
I cl 1 ff1cu 1t1es
n:search proiect. Th is includes their advire on overcom i n g potent1a
with secondary data . Yo ur supervisor ran provide i nval uable ::idv 1ce on how to
eva luntf' your data, a n d may also be able to reLom men<l seconda ry s ru:s h L
you h avL not yet ccmsi<lcred . Moreover, i f they fed that your top 1 1.. provi Jcs
access to a sparse amount of seco ndary <lata, they may be able lo offer u gg s
tiom, about primary data collection . Once again, when you fed y urself h i t rng
a hrick wall' wit.b your rt>st" arc h , do not forgt>t to consult your pro1 ect sup l:'rv1so r.
20, ESSENTIALS OF BUSINESS RESEARCH
=l ri
Sprru,rfarv 0.::tt
If you in tend l ndu<ling primary and secontlary data in your research projcct, then it
cm sometimes he difficult to know h ow to link these two mRin sources of <latll . As
previously noted, one way is to comparP your pri mary tlata with secondary dnta
from books, journal artttles, puhl ishrd slalistks and other sources. Part of Lhis com
parison should invol vP the ..rnalys1s and mtcrpretatiun ot data. For exa mple, let us
i.ay a UK Government report slatPs that the main reason why joint ven tures i n
C h m a faJ is due to cul tural diffcn:nct>s. Yet , analysis o f your primary fi ndi ngs intli
cates that the leading cause is due to a fail ure to agree strategic objl:'.ctives. The key
question hPre is why the Jiffcrence between the primary and econdary data? To be
a good researcher you must wmpare, analy?.e anti interpret both prima1 y and sec
ondary dntr1 anti not fall into the trap oJ l>imply desLribing the <lata.
Secondary data Lan i1l s o be used to inuea(" the credibility of your primary
rt>senrch findings. for instance, if your pri mary findi ngs support the view of leading
au thors in the field, one argument tha t you colJJ make is that yollr reslJls arP l ikely
to be hoth valid and credible.
.'Research In Action 
' ;;..t 
....
_..:;
103
(Continued)
The researcher suggests that both the press and media in general are useful sources of data.
Newspaper articles can be used as sources Also. In some articles you will find op1nton polls: the
advantage of these 1s that they distance the researcher from the evaluations. However, it is worth
noting that newspaper articles should be treated with care as they have not gone through a peer
review process.
Other academic researchers include data by other scholars Unlike newspaper articles, aca
demic articles are peer reviewed In addition, there is scope to undertake metaanalysis. This is
'quantitative analysis of a sroup of studies that uwestigates the same research questions One
of lhe benefits of metaanalysis 1s that it generates a large sample One issue for the researcher.
though 1s the need to perhaps negotiate with the original researcher in order to gain access to
the dataset.
Finally, private sources are another potential source or secondary data. Here. the author
suggests that these include companies' internal reports and memoranda: this Is in addition to
organizational archives. However. for the student researcher there are clearly obvious difficulties
in accessing such sources. Cowton makes a similar point by acknowledging the potential diffi
culty of negotiating access
Cowlon's (l 998) artide i helpful to researclwrs as it considers a numher of dif
ferent sourn, of seconJary Jata. A useful e'<ercise would he to look at the entire
article, ns it also wscusses using secondary data. Onu: .igam, allhuugh UH.: paper
focuses on husincss ethics, many of the author's points nre equally applicable to
othPr area.s of busmess.
'...
llf.
mrnr1ru
rrf
Conrl 1c:inn
This chapll.'.r hns exarninf:'d how seconJary <lata can ht> inwrponlled inw your study.
It defined what 1s me>ant by secondary data and rnnsidercd the advnntages rnd dis
advant..'lges of using secondary data in your resenrch. IL also exam in Pd how to evalu
ate and prese>nl seLOn<lary <lata. Herc are the key points from this chapter:
Secondary data are data that have been collected by other researchers.
Secondary data can be classified into electronic and written formats, and subdivided into com
mercial and academic purposes.
The main advantage of secondary data is that such data save time and money for the
researcher. The main disadvantages include the potential difficulty In verifying the reliability
of the data and whether the data are applicable to your research problem .
If you have the capability of reading foreign language sources, then this is clearly an advan
tage as it allows you to consult a wider range of secondary sources.
Secondary data can be evaluated by considering its purpose. scope, authority, audience and
format.
Your university or college library is likely to contain the majority of secondary data you wilt
need. However, consult your supervisor if you need more specialized data.
Cooked data can often be presented in its original format. whereas raw data needs to be
processed by the researcher.
it.:
Helen's chosen topic for her research project Is meraers and acquisitions In the European bank
Ing se tor . As BSc (Hons) Finance student, Helen has learned that the market has experienced
.
consolldat1on in recent years. and she is keen to examine me Impact or mergers and acquisition
M6.A) on the banking sector workforce. She has chosen a case study research design, and
intends to analyze two higl1profile mergers and one acquisition. AU or these took place within
the last 12 months.
Helen is fortunate In that her research supervisor's main area of research is similar to
her own proposed research topic. She has therefore sought advice from her supervisor on
nume!ous occasions. One of the suggestions her supervisor has made 1s tor her to Include a
question that examines whether or not the bout or recent mergers and acquisitions looks set
to continue.
Fortunately, Helen's topic has received detailed coverage across both the business press
and wider media. In addition. in recent months several empirical studies have been published
_
in leading academic Journals. Helen also has a list of all the mergers and acquisitions that have
taken place in Europe since 2000, including those in the banking sector. The main problem she
races is that this s simply a list from a specialist trade magazine; it provides no detailed
.
analysis or d1scuss1on on the companies Involved.
tlS
(Continued)
Much as Pauline would like lo carry out primary research. she reels that this is not a viable
option due to time constraints. She believes It would be impossible to generate a sample the
size or the GHS. Pauline has also ruled out using other secondary data anatvsis because she
believes the GHS fully addresses her research problem. Still. as her research supervisor. Pauline
has met vou to seek clarilication that vou share her views in relation to the GHS.
Do you agree with Pauline that the GHS should be used exclusively? Give reasons for your
answer.
.,.
1. You have decided to base your research project on the current economic crisis. Your
leading research question is 'How has the current economic crisis impacted on trade
between the UK and USA?' Suggest possible sources or secondary data that you might
use to answer this question.
Answer. Frgure 7 1 provides an eclectic range ol sernndary sources The m,11nrrty of these are
likely to be ideal ror the above topic. Moreover, you may also find that each country's
respect1vP Chamber or Commerce and Embassy wcbsrtcs orrer useful information. The
1mpor t.int lt11ng here ls to try to consult a wide range of secondary data At the tmr. ol writing,
the global frnanclal c, rsis continues to dom111a1e rJa,ly news. Consequently. you should have no
troul.Jle tn hnding an abundance of rnformahon. Rcrnembur that the main aclvantage m
consultmg wlcte range or seconctarv 1lata 1s th ilkcl1hood of sireater reltability.
2. can I base my research project entirely on secondary data?
Answer: Some universities antJ colleges Insist that primary dalt1 rnut also feature in a research
p roject. Ilowcver lhts tends to he more applir.r1ble to postgraduate rather than undergraduate
progrnmmes If in doubt, check with your resc, rch suprvrsor If y,iu decide to only rorcr 10
secondary data. then 11 1s wo, th cons1der1ng expla1nrng to the reader why you have llted not to
undertake pnmary researth For rnstance. one reason m1gllt be that there Is already a plethora
ol data on your chosen subject so you do not feel the neell to include pnmarv d ta.
It you arc perrrntted to condurt your research using purely secondary data, consrder the
followtn!;l questrons
Can my research p roblem be addressed by simply including secondary data?
How significant might the contribution or primary data be to my research?
3. Can I use foreign language sources in my research project?
Answer. The short answer 1s yes This IS ctearly an i'Jt1v11ntage tor the student researcher as 1t
allows access tn ii wic1er rilnge nf sources H(1wevet, one drawback 1s tho time it taKcs to
206 ESSENTIALS OF BUSINESS RESEARCH
consult ltulh English ana foreign langudge sourm, H nee the rmportanc.e anached to
cons1ctenng the five li1cto1, when evalu ting secondary data  purpose, c pe, authority,
a11d1enre and format
4. Suggest the possible advantages of using secondary data in an electronic format.
Answer: There are two key advantages associated with usrng secondary data m elec:tronic
format time and organi at ion 111 ability to ,1ccess an extensive range of articles
eleclronrcc1lly will ave you a <r at deal I tnnc, wluch you rnn then sprnd on c.cessing a
wider range ol i.ourccs nr analyzrng vour r1ni1111p,s 111 gredter clpth ltl org 111Lal1011 ul your
linllmgs can tso b mnre easily achlever1 usrng , l ctront :.orrrcc For x.1mplc, a vast m unt
('( d I
n " w b transport m "Jall Y on rngl L'<jB m M rv 'ii 1<
Furtt" r Pec'inn
Bryman, A. nnd Bell, E (2011) Business Resparc/1 Methorls (3rd t"rln). Oxford:
Oxford Univcnity Press.
Couper, D.R. and Srhindler, P. (2008) B1Li11ess Research Metlwrls [10th Pdn).
Maidenhead McGrawHill.
QuinJan, C. (200 l) Rus111ess Research Methods. Andover: Cengage Lt"arning.
Saunders, M.N.K., Lewi:;, P. an<l Thomhill, A. (20 J 2) Research Methocls for JJ11siness
S1ttdent.s (G1.h e<ln). I Iarlow: Prf'ntiu.! Hull.
Skwarl, D.W. and Kanum, M.A. (1993) Sf!ro11dmy Resecirch: lnfomrnrinn SourcPs
and Methud_., (2nJ ctln). Newbury Park, CA Sage.
USING SECONDARY DATA
.!07
Sampling
,.
lntrQrl11rtinn
In Lhe preceding {WO chapters we have conc:entrnted our attt.:nliun on Jata colll",
lion melhod\ An impo1 cant p,lrl t1f primary data rnllection 1s sampling. [n general,
the,c arc: two fundamental questions often associated with sampling  'How Ju I
know which :.ampling technique to use?' and 'What is an appropriate sample size?'
This chaptc, sc.:ts out tu a nswer thrse questions.
As noted i.tl Chapter 6, wht!TI undertaking you1 resc.:arJ1, the likelihood is thiit you
will nef'd to collect primary data. However, in order to answer your research questions,
it is douhtful th.it you will be able to collect data from ,ill cases. Therefore, you \viii
need to select a sample. The entire set of cases from whH h yoUJ sample is drawn is
callc:J the populntion. ln reality, most resc.:archen, neither have the time oor Lhc
re,;ources lo analyw the entire pop11lation. Fortunatdy, a range of sampling techniques
allnws you to reduce the: number nf cast>s taking pa1t in your study.
The samplmg techniquc:s(sJ you select brgely depenJ 011 whctht.:r or not you wish
tu in Fer thnt your tinJings apply tu the wiJer popul:nlon. Howt.:vcr, you may not wish
to generalize, hut ntm to provide a 'snapshot' of one partirnlar cusc, e.g. asking busmess
rnstoincrs what they think of one particular dclivcry process tonne particular supplicr,
rnthe1 than lo all suppLers.
This Lh:.ipter hPgins hy describi11g the .erie1 of stages involved in thP s.in1pling
process. During the early st.iges I make rlear the distinction hctwcen commonly
used terms in sampling; thesP includP population, sampling !ramc and sampling
it_,;;plf Then we explore the reasons for engaging in sampling and how yuu set
about sc.h:ctin.g yo11r sampling framc. Next, we examine s,impling tecbn iqul:!s.
Thcrc ure hasi,ally two broad types of sampling: prohahility [also rPterred to as
random) sampling and nonprobab1l1ty (also referred to as nunrandom} sampling.
Each sampling method is dearly dt>finecl ancl thP main methud1 are illustrate d
with c:ase examples.
Yau Jo not nelessarily havc lo m,triLl youn,elf to 011( typl;' of sampling tech
ni4uc. Many students combine different types of sampling technique to answer
their research problem. Yet, whatever method you select, it is <>swntial that you
explain thP rationale behind your choire. A number uf factors are explored that
might lead you lo rnmbin sampling techniques. This section etmduJel> with :l swn
mary of the strengths unJ weaknesses of euch sampling techruque.
Following this, I deal with a key issue in sampling  tl1Rt of sample size. Various
factors influence sample size. In essence, these factors can be divided on the basis of
eitbe1 subjective or :;tatistic'al mcthods.
Your choice of sampling technique can directly impact on your response rate.
Usually, nonprobability sampling techniques are associated with highcr rcspunse
rates. llowevcr, this has to be balanced with the quality of the response, and not just
numberS. The concluding part of this chapter addresses how to deal with poor
rcsponsc rates, and how in some instancei; it may require the introduction of ::i sub
stitute sample
Choose your
sampling technique(s)
Del!!rmfne your
sampla slze
rate
i:1GURE 8 .1
tourism dr.:vclopment in London, you may consiJer the population as all tourist
attractions locateJ within the London area.
Defining a population Is not always straightfo1wanl. It largely depends on your
researLh questions and the c:ontext with which yolJ wish to study. When defining
your population, you r1eed lo establish the types of case that make up your popu
lation, e.g. in<lividu::ils, Finns, households, etc.
Tn essence, a popufation can often be hroken down by moving from the gPneral to
more spedfic. Fur instancP, the population of a coL111Lry !>uch as the UK can be sub
rlivi<lcd as follows: East Anglia, Cambridge, area in Cambridge. Most students do not
have the time or resource:,; to target a large popul::ition, and lhPrefore need to target a
smaller population or consider sampling. However, you might finJ that the size of your
population is smi:ill enough for you to target d1e lire population. Let us say thst you
wanted to target manufacturers of large passenger aircraft. In the main, the pop11lation
consist,;; of two companies Airbus and Boeing. So, you may decide to target the entire
SAMPLING
211
popul:ition. For this reasnn, Pigure H. l shows an arrow leaJing from 'clearly <lefine your
target population' to 'rnU1.:ct Jata'. Effectively, you are bypassing the stages concemed
with .sampling, as you are targt..:ting the whole popul..ition.
Populallon
000 0
0 0
0 0
!
I
ll
A sampling frmnr is a list nf t.he actufll n1ses from which your samplt..: will be Jrawn.
The sampling framl! must bl' representativf' of tht, population. However, in reality
it is difficult to know when a sample is unrepresentative and should not be used.
An important as pect of your sampling frame is to consider how such a !1st of
people or organizations can be located. For example, if you intend surveying local
building firm,; in your area, yo1 may identify your ropulat.ion as all those firms
within a tenmile radius nf ynur address. Al First, locating a list of building firms
may seem relativ<::ly simple:. An obvious source is your local telephone direct
ory, although bear irl mind that not all firms are likely to publish their details in
the phone book.. Therefore, how Jo you know that those firms in the directory
arc represcnt11tive of the pnp11latio11? We will come hack to this point latf'f in this
chapter.
Some researchers do not have access to a sampling frame such as a definitive
directory provi<ling company <letails. If you find you1self in this position, yo u will
need to devdop yoW' own sampling frame. This can be a timeronsuming and chal
lenging process. Moreover, yo u are faced with the problem of trying to ensure that
your sampling frame is representative of the population. In some respect,;, this can
be achieved hy referring tu earlier studies that might illustrate key cl1aracleristics of
the population.
Onet" you h:ivc cstablishcJ your sampling frame, tht.: next stage is lo LOt'lSide.r
sampl111g and sampllng techniques.
0
0
0
Sampling
frame
Sample
FIGURE B 2
Individual cases
::i
c=::i'l'nl
Defore we examine factors that might leRd you to engage in sampling, it is worth noting
that businesses also use sampling Lechniques when con<lucting research. Suppuse, for
instance, a c:ar 1w111ufacturer is i.n the prncess of launching a new model in Germany
and wants some data about possible sales. E:;sentially, there are two ways li finding this:
1 It could ask every person in Germany who might buy the car whether or not they will actually
buy it, and how much they would be prepared to pay.
2 It could take a sample of people, asK them whether or not they will buy the new model, and
then estimate the Likely demand from the population as a whole.
Obviously, the first option is both costly and Limeconsuming. Purthermore, the car
manufacturer would be unlikely to cunlact the entire population of Germany, as noL
all people drive or are 111t1;"rested in buying a new car. In short, it is not feao;iblf' to con
Juct research on such a large scale, E'spedally as it is not targeted Lo those potential
purcha.o;ers of the ucw car. Option 2 is for more fotiblt! a sc1nipling can be used to
genera Le dependable results, rather than focusing on the whole population.
ln a<ldition, it is impracticable to even attempt to survey the entire population.
These impracticalities include the following:
there is no time to survey the entire population:
there are not the resources, particularly the budget. lo survey the entire population;
the skills to c:ollec:t all or the data and interpret findings are lacking:
the size of the population is too large;
it is too ditricult to access the entire population: and
you wish to compare your research to that of previous studies.
SAMPLING 13
...
FirsL, an obvious impractkalitv t.hat preventc; you from st1rveying the entire popula
lilln tinw. Even if your population is within dmc geogrnphical proximity, il can still
be timernru.uming 1..onta(tmg, annlyzing and inlcrpreting the fimlings of each case.
Sernn<l, a gener,il lack of resources is hkdy to prevent you targeting the entire
population. In partirnlar, the cusl involved. The main cost 1s assocrnted with admin
i.<.tcring your data rnlkction W hethe1 you opt ror interviews or :.i questionnaire
survey, assoLiatc<l costs might include travel, ai.:rnmmoclation, postage, ell.
Third, your lack nf skills as a researcher may hamper your ability to '>wvev the
entire population. If, for example, your stu<ly i.nvolvt"s international research, then
your lack of language skills may restrict your ability to larget the entire population.
Similarly, you may not have the skills rPCJllired to analyze l::1rge volumes of data 01
to allow tor the production ol a simple, clearly interpreted c;et of findings.
Fourth, the size of the population means that it is wholly unrealistii.. to target the
entire population. Examples include populations of countries ur reg10ns within a
country. Moreover, targeting companies within certain sectors, e.g. small businesses
in Pram_c, is similarly unrealistic.
Pifth, you might flnd it diITirnlt to ULCess the entire population. lnstAnres that might
restrict your acces.'i indudc: a sensitive topic, ::i lack of published data on the whole
population, and a general unwtl.J.jngness of participants to take part in your resea1ch.
Finally, pcrlrnps not c;o much ;m impracticality hut a preferred J10ice is your
intention lo compare your research with that of earlier stuJ.ies. ln order to be able to
compare liketorltke data your intention might he to adopt the same sampling
meLho<l as other researchers.
In this section we have explored l'l numher of reasons For selecting a sample. The
next stage is tu consider what romtitutes a :;uitable 11mple size.
carir'ir" trcrniriu s
Sampling techniques
Probability sampling
FIGURE 8.3
Simplo random
Stratified random
Cluster sampling
Systematic sampling
Mulllstage sampling
ntf
gt
Nonprobability sampling
Quota sampling
Snowball sampling
Judgement sampling
Convenience sampling
nrq 1c
he if you wcre to construct a sampling frame first and then use a random number
generation computer program to pick a sample rrom the sampling frame.
'Probability or random sampling has the greatest freedom from bias hut may
represent the most rnstly sample in terms of time and t>nergy for a given levt>I of
sampling error' (Rrown, 1947: 337). In addition, it is not always apprupriatt for
those tu<le.nt'i who are interested in doing case study research. There are several
different types of probability sampling tethnigue We shall now examine each one
in tum.
1m1 l., s The impk random sample means that every case ol the
population has an equal probability of mdus1on in your sample. Por example, kt us
say that you want to survey 250 members of a sports club. If the lotal membership
is 1,000, tht> probability of inclusion in the sample 1s:
, 1
11
P(inclusion) =
SAMPLING
15
olher words distance be!V\ ecn your chosen cases, might leac.l tu a biased sample. In
addition, thf' suhjects in the population need to be ordered in some way. For
example, surermarket stock that a1e ordereJ on a shelt; names of businesses orc.lerd
in a hu:,iness Jin:Llury; names of health dub memhers ordered alrhabettcally on the
company database; or aJJre:...e!> ordered on the basi!> of postcoJe'.1.
Referring to the earlier spQrts dub example, we kiiow t.hat we are lo select one
member in four. With a systematic sample, we would make a random start between
one ::inrl four inclusivt:>ly, possibly by usiug the last two <ligits in a table or mnc.lom
numher,.
The ac.lva.ntage of this sampling technique is its simplicity. Moreover, ,1 s:imrling
frame is not always required. The main c.lownside is lhe potential for a regularly
ocCLu ring anomaly impacting 011 the quality of the data. By way of illustration, let
us say that ,1 manufacturer of llL'rnry orna.mwts deddes to implement a syslQ.rn of
Lota) qualiLy managt"ffie.nt (TQM). A maln featurP of their TQM strategy is regtJar
quality control LheLks oft.heir finest bone china range. Adopt.mg a systPtnlltk sam
pling method may sound fine in princ.iple. Yet, what if the machine painting the
ornrum:nts devPlops ll fault? lf this fault leads to the paint supply running out al
regular intervals, tl1ese may generate wildly inaLCLtrate data as to the overall 4ual1ty
of the production output. One way to overcome this problem is to have:: random
rather than systematic checks.
rl i1 l r 11u n san1pl111 StralifieJ sampling is whcr(' t.he population is divided
into strata (or subgroups) and a random sample is taken from t.:acli i.ubgroup. A
suhgroup is a natural set of items. Subgroups might he based on company size, gender
or occupation (to name but a +ew).
Stratified sampling is urten usPd whe:>re the:> rf' is a grPat <lt:>HI of varintion within a
population. lts purpose is to ensure thL evPry stratum is adequately represented.
Hence, the number of items chosen from each subgroup may be proportionate to
the size of tbt:> straturn in relation to the population. for this reason, when malung
inferences in relation to the wider population, strAtifled s,1mpling usually has a
smaller ,;ampling errur than imple random sampling. This higher level of precision
is a key ac.lvanlagc of strat.ified sampling. Still, it can sometimes he difficult to get
hulc.l of detailed information on your entire sampling frame, thereby making it prob
lematic when it comes to identjfying your strata.
A systt:>matic approach can be taken when conducting stratified sampling. The
stAges involved are shown in Figure 8.4.
The following example illustrates how stratified s,1mpling might work in prac
tice. A retailer employs a total of 2,000 people. Using a sampling frame of 1,000
(50 1}{, of the total workforce), your inlenLion is lo conduc:l researLh into ahsence in
the workpla,e. You have idenlifieJ the following st.rata  genJcr anJ occupation.
The total workforce is made up of 300 ma.le and 400 female mtmagers, and 800
male and 50() female employees respectively. Using stratified snmpling, your sample
of 1,000 woulc.l consist ot 150 male f.lnd 200 fern;ile rnan,1gers, And 400 male and
250 female employees (see rigure 8.51.
21f ESSENTIALS OF BUSINESS RESEARCH
oagome"'
ployees
Males
l.2_so
95
400
263
:=F.
Total
350
197
56
650
355
55
%+8
63
200
102
51
66
250
92
37
Females
C. u tr, mp ing Cluster sampling is where t.h whole population js divided into
cluster or groupi.. Sub'.lequently, a random sample is taken from these du$ters, .ill
of which are used i11 t.h.e final sample.
Cluster sampling is advantageous for those resea1chcri. whose subjects an: frag
me11tec.l ovt:>r a large geograprucal art.:a, as it ,;aves time anJ monf'y, rt: for example,
you wish lo xamine healthc.::are provision among hospitals in the UK, rather than
Largeting t.he entire population, yot1 can use cluster SAmpling. You may start by rec
ognizing regional N1 TS (National Health Service) Trusts AS clusters. Subsequently, a
sample oF these Trust.s can be chosl"n at random, with all hospitals in each Trillt
incluJed in the furnl sample.
SAMPLING ;n 7
sample si:w. 'This approaJ, is mot appucJble in small populations that are d i fficult
to access due to thf'ir "dosed" nalure, e.g. secret societies and inaccessihle professions'
(13rewerton and Millward, 2001J.
Tr, for example, you want to inlcrview managing director<; of local rnrnpanit>s,
you may finrl it difficult accessing a Stuficient n11mbt:r uf directors. Snowball sam
pliug allows you to pcrhaps uvtrc:ome this pmhlem by using Lhe d 1 rf'ctors ym1 do
know to contact other directors within their business network. I low can this be
achieved? WPII, oftt>n you tend tu finrl that people in sc>nlor management positions
are members uf various professional bodies, h11sines assrniatron Jud, in general, of
a wit.It.: hus1nes net work In f'ssence, you can use a few uf these key individuals to
rn11taLl tht>1r wider business network about your research.
'l'he advantage of snowball sampling is that other individuals can do much or the
work for you in dt>veloping your samplf' size. l.n a<lJition, ,ome of th ese individuah
may he crucial to your reeard1 The disadvnntages with snowball s.impling are that
they provide the researcht>r with very litlle control ovcr the cases within the sample.
for example, indiviJua.ls are likely to contnct dose frien<ls, who may share similar
views. I lence, thert.: is tht> possibility of obtaining II biased , unrepresentative numher
of cases.
r1 n
'11 e 1111hr1
Convenienre sampling is selecting participants because they
.
are often readily and easily availahle. Typkally, convenience sampling tt>nds to be a
favo11red sampling technique among students as 1t ls mexpensive and an 'cosy
option' compared to othe1 sampling techniques. Convenit>nce sampling nften help
to overcome many of the limitations associated with rt>March. For c:xarnpl t>, ustng
friends or fanuly a part of your sample is easier than targeting unknown in<liv1dua];,
A key limitation connected with convenience sampling i!i the potential fur high
levels of bias as well as the inahility to make gent>r.ilizations across the wider popu
l11tion In short, convenience sampling can be defined as a nonrandom sampling
technique lhut is chosen by the researcher tor its practicality.
u o vr
u nPnl ll rnp1
P11rposivc or judgemental am piing is a strategy
in which particular setti11gs, pcrsons or events are sele,ted Jcliherately in order to
provide 11l'lportant information that cannot be obtamed from other Lhoices (Pallun,
1990; Maxwell, ] 996). It is where the researrhe, includes caseS or participant in the
sample her;iuse t.hc::y believe that they warrant Inclusion. In otht>r worcb, incluion is
based un your own personal judgement. A numher of reasons may eXJst for yuur den ding
to .i.ncluJe certain cases but e..xdudf' others. These can be St1m.manzed as:
a unique case;
a critical case; and
a focus on heterogeneous or homogeneous groups.
A unique casL i one that dtsplays a chJractf'fistLC that is not shared by other cases.
Tb illustr.ite, let u ay that you are conducting a stu<ly into the world's leading
hrands. In general, these are dominated by Lht> USA and Japan. However, if one
SAMPLING
19
European hrand  lel '_o; say Nokia  was the only one representing Curopf' in the Lop
ten, this might he interpnted lh a unique L&.c. By indud,ng a w1i4ue rn_o;e, the
intenlion is tu Lomparc anJ rnntrast findings with othf'r ,a,;es in your sample. The
inclusion of a 11n1que u1e can often provide interesting findmgs that can he turthe,
f'xplored in later studies.
A critical Lase is um: that is essf'ntial to ynur ri>searrh. for example, the USA
wottld he v1ew1"d as alrttirnl C3SL' in the wntext of re:.eard1 into the world's IPading
economies. In other wnrds, failure to mclude the USA in yolll reM:an:h is likely to
have a negat1v1:: mlfH:tLt on the credJhility of yo1.1r results.
Finally, you may whh to exnmine either heterogeneous or humugenPous groups.
ThP Former mighL comprise student pArticipirnts f1 om different cotuttrie\ whereai.
Lhl' laLtcr would foLL1i. 1m a group of stuJento.; from one partu:ular co111ttf)
One of the drawbaLks assouatcd with purposivl' sampling is the potential for
san1pl111g h1as. Moreover, you are unable to generalize your resea1 ch finJings to the
wider populaLion.
TABLE 8.1
t t:?nt ., . d we ne.sses 01 s
Technique
Strengths
Weaknesses
Co11venie11ce
sampling
iudgeme111
sampling
()uola sampling
snowball
sampling
Simple randon,
sampling
CiJn increase
representativeness. easier to
Implement than simple
random sampling. sampling
trame not always necessary
Includes all important
sub populations, precision
Systematic
sampllnq
You Jll not rll:Cl:SSariJy have lo restrict yourself to one type ot sampling teduuqul' MJny
researchers combine various methods when conducting their rl:!oiearch. Of course, you
will need to justiry your rea'ions or combining your chosen metl10Js within ynut
re.earch. First, you might 3J gue that similar studif'S havf' comhined sampling tcd1ni4ue)).
Therefore, in nrder to compare finJings, you wi.JJ lo mah: a u1!oie for combining meth
ods. St>cond, you might he using methodological triangulation as art of your study.
Therefore, in orJl:r tu increase levels of reliability and validity, you n1ny wish to make
the case for combining sampling methods. Finally, you may simply arguP that combin
ing methods mPans that you are better placed to answer your researJi prohlem.
In general, ccrtain sampling techniques are bettt>r rnmbined than othl!fs. for
instance, if using conven1ence sampling, it seems natural to perhaps incluJ1:: La:.es
w1th111 your sample that arC' crudnl to your research QuJgement sampling). While
using probability .md nonprohnhil1ty mt>thods tor the same population l:an be
unJcrtak.l'n, it is often tin1ecom.uming anJ costly for the re'iearcher.
Table, 8 I illustrates strt'ngtlu, and wcakne:,:.c:. a:,sociateJ with each respective
sampling technique. By now, you should he aware that there 1s no one 'hesl' sam
pling method. As noted, a number of factors are likely to dictate your choice of
sampling technique, I lowever, Table 8.1 acts as a useful starling point.
ting 1e lln
Straliflei.J
sampling
Ouster sampling
Fasy to implement.
costellectlve
B1rK (,
t, 17 1
ul some respects, the size of your sample is likely to be detemtincd by the nature
of your research philosophy. Ir you have adopted a positivist stance, then the likeli
hood 1s that you a1 e inll.'.reskd in genera Ling n largf' sample that permits statistical
analysis. On the other hand, J you decicll' to engage in an mtNprPt1v1st approach to
your resc>arch, thl"n you are likely to be concerned with a smaller sample. In sum
mary, your choice of sample> size dPpends on:
the confidence you need to have in your data, i.e. the level or certainty that the characteristics
or the data collected will represent the characteristics of the total population:
the comparative sample size or earlier studies;
the margin of error that you can tolerate, i.e. the precision you require for any estimates made
from your sample;
the types or analysis you are going to undertake, in particular the number of categories into
which you wish to subdivide your data, as many statistical techniques have a minimum
threshold of data cases for each ceU;
the size of the total population from Which your sample is being drawn; and
using formulas and published tables.
SAMPLING
21
First, if you wish lu make an inference to tl1e wider pupuhiliun, as a ' rule of thurnb'
thl: ample sii.e should consi,;;t of at least 30 cases. kleally, where the population il>
less than 30, lhe entire popttlulion shou l d be inciudcJ in the !>tudy, although this also
depends on the extent to which a sa mplf' is homogen eou. . I n general, the more h et
erogeneous a popufat1011, the larger the sample requ ired to acquire a representative
samp le, while lhl: mure homogeneous, the less variability in the dislri bution of' the
characteristics in the population . Th e ronfidimr.e l.rvel is exp ressed as a percentage,
typical ly q5% or 99%. lt u, lww cunOJenL you arc that a parameter fa.11 wi th.in a
specif1C' ran ge of values. A parameter is a 11opL1lation charaLleristic !>"U ch a!, a rr opor
Liun (P) or mean. for exam ple, if you adopt a 95% contldeme level, then you expect
95 out of I 00 samples will have Lhe true population value within H1c range of preci
sion, e.g. S per cenl.
Second, you may wish tc1 base your i;an,p]e size on earl ier, si m i lar :;tudies i n your
chosen fiel<l . The aJvaatage of tl, is is th at il can allow for direcl rnmparalive a na
ly. is w i th prtvious rcsenrch . Yi.:t the downside is th al reviewiI1g lliese earlier studies
does nol always reveal the sampl ing techniques used by resea rchers. Thus, although
your sample may be of similar size, it is Lmhkely that you will adopt the same sam
pling method a nd/or cases.
Third, the level of precLsion or sampling error is the range in whic:h th e 'true'
population val ue is eslimaled to he. This range is typically illustrated using percent
ages, e.g. 5 per ccnl. For example, if a researcher finds Lhat 80% of consumers
engage in recycling activities with a precision rate of 5%, then the researcher can
condude that between 75% and 85% of conswners in the population b ave engaged
in recycling activities.
Every sample statistic you cak uh,te from a sample wi l l ha\'e sampling t>rror, no
matter which sampling lechnique you u.e. Ultimalely, lhc lower lhe sampli n g error
req uired, the larger lhe probability sam ple needs to be. The only way to el i m i n ate
sam pling error is to undertake a cen1;us of lhe en tire population.
Fourth , if you are adopting a case study research design, then the likelihood is
that you RH' f'Xamlning a reallife phenornenon, perhaps an i ndepth case. Hence,
the sa m ple size may be one. Conversely, i f you a re conducti ng quantitative research
and are i ntending lu use inferential statistic:s, then you need to consider your samrle
size carefully. In particular, subdividing your data into various categories will impact
on Lhe types of data ana lysis technique you can use.
Fift.h, if the population is sma ll , e.g. less than 1 50, then you may be in a pl)sition to
carry out a census of the entire population. The advantage of bei ng able to do this is
that it elim inates sampling error data on all individuals. Still, as we have established, it
can hf' hoth costly and time.consum i ng targeti ng the entire population .
Finally, therf' are several different form ulas a n d tables used for determining sam
ple size. Thi.: range of met.buds is beyond lhe scope or Lhis book. For a more inJepth
disC""ussion on sampl i ng methods see Cochran (1 977). However, below is an example
from Yamane ( 1 967) . This formula is used lu caJcttlulC' lhe sample sizes in Table 8.2.
The tahle shows the size of population and the required sample 1ii7".e for 5% pred
sion levels, where the confidence level is 95% and P = . 5 , which is the estimated
proporUon of a d1araclcrislic Lhat is presenl in the population.
222 ESSENTIALS OF BUSINESS RESEARCH
cx3mplP
Yamane ( 1 967: 886) suggesls the following way to cakulatf' sample size:
N
n = 
1 +N (e)1
where:
n = s::i mpk size
N  population sizf'
e = preciinn (samp Lng error)
By way of illustration, if you knuw the population r,,ize to be 300 m:magers and wish
to know the sample size in order that 95% of lhe sample values are with i n 2 stand ard
deviatinns of the Lrue population mean, the ahovc furm ul::i would read a.s follows:
300
n = 1 + 300 (.05) 2
a'lrf P 
Size or population
100
125
150
1 75
200
225
250
215
JOO
ll5
Sample size
( n)
122
134
144
154
163
1 72
180
SAMPLING
123
govern s.intple sde1..tiun 111 some resperu, Lhe final sample siL.e is almusL alwa% a
mancr of j11dgemenr r.ther than Lakulation (Hoi.I1villc and Jowell, 185).
e 6' Ac:c:P
Your response ratt' is the numher of cases agreeing to take part in your study These
c:ases are taken from youi original sample. Your response rate rnn, of c:ourse, he
represented a. fl percentage or actual number. for example, if we lOn.si<ler Lhe for
mer, let llS say that yo11 have 200 cases in your sample and a total of 40 participants
take part. Then our responsr rate equ::ites to:
40/200 x 100 = 20% (response rate)
In reality, most researchf'rs neve1 achieve a l 00% response ratf:' Reasons for lhi!.
might include refusal to respond, ineligibility to respond, mahility to respond, or the
respondent has been lorntcJ hut you are unahle to make contact. Rt>sponse rate is
important bernusc each nonresponse is liable to bias your final sample. If, for exam
pie, you decided to condult an email !>urvey mto working praltiLes anJ received a
response rate of b0%, this could be ulterpretcd as an excellent response Yet, closer
exarninatmn of your findmgs might indicate that the majority of respondents nre
those m fulltime employment and working from home, whilf:' those in parttime
emplnyment generated a low numher of responses. You might then conclude that
this bias is poi.sibly dttt: lo t.hc fad that thoi.e in partLime employment have limited
access to the lnternet. Therefore, your sample is not representative or tht entire
population.
A high response ratC' is essential 1f you wish to infer from your results to the wider
population Lf you Jo genf'r:ite a low response rate then the greater the hkelil1ood for
sample bias For example, response rates as low as 5 20% increase the likelihood of
the sample being un1epresentative. To illustrate, suppose you con<luLt research into
22
keeping pets using a random sampling method ot people in your area If you re,eiVl
a responst' rate of only 25%, dtis might be becaust> only thost:' respon<lents ,,ho bave
a pet or an interest in pets responde<l. This is becalle thnse people with an interest
in pets are more likely to return their completed questionnaire.
For dwsl! reasons, it is vital to keep track of responses. If you do experience a low
rf'sponse rate, Ju not feel loo Jei.pondent. A low response rate may be in keeping
with previow, reseat lh studies. If so, this Lan make for mteresting comparative
1lll:ilysi\. Through con.ducting your litCT"ature review, you should be familiar with
what constitutes a 'typical' rPsponse rate 111 your c.:hosl'n suhkct.
A key faLlor in increasing your response rntc is always to involve a 'chaseup'
stage. Thi basically involves contacting partkip;int5 again so as to 'encourage' them
to take part in your re!>carc.h. If all else fails, n reserve sample Lan always be plaetd
ml stanclhy  if your populauon is large enough to fl!low you to have a reserve sam
ple, that 1s!
In um, response rate 1s 1mport<1nt because each nonresponse is liable to bias
your final sample. Clearly <lefining your sample, employing the right sampling tech
ni4ue, and gl:Dcrating a large sample in some respells Lan help lo reduce the likel1
hood of sample bias.
Choos1n an inappropriate sampling tedrnique 1s something that you will prob
ahly realize in hindsight. A key indication of a poor choke of c;ampling method is a
low responsL rate. Certain method<., such as l01wcnienLt' liampling, are unlikely to
pose a problem in terms of response. Conversely, stratified random sampling is often
more problematic because of it,; very nature.
Generally, you should be rnnfidenl that you h:we lhose11 the right sampling
method prior to colleLti.ng your data. Your choke nf sampling met.hod may be
Jependent on how much accuracy is ncede<l. Let us sc1y that you have an important
problem to addresc;. There 1s therefore a greater need for an unbiased sample with
a mem,unible sampl111g f:'rror. The hesr technique woul<l be a rrohahility sample. On
the othe1 han<l, if the findings relate to a Iese; important Ul'Lision, a judgement samplt>
may hf' justified (Petcrson an<l O'Dell, 1 QSO).
l;JMtMCittiiit1t#
(r,nnrPnt Drinkc:
Four years after rinlshing university, former Cambridge graduates Richard Reed, Adam Balon
And jon Wright decided lo work together on pursuing their business idea. With a background
in manageme nt consultancy and advertising. the three budding entrepreneurs certainly had
the knowledge required to start their own business. Their intention was to develop the 'best
fresh drinks in the whole world'. Yet. although they believed in the essence or their idea,
they still did not have a product.
In 1998. arter six months or trying out recipes on friends, they spent 500 on rru1t. turned
it into smoothies, and sold them at a small music festival in London. Next to their stall, they
(Continued)
SAMPLING
25
(Continued)
put up a large sign saying 'Do you think we should give up our jobs to make these smoothies?
They put out a bin saying 'YES' and a tlin saying 'NO' and asl<E!d restival goers to put their empty
bollle in one of the bins. Richard. Adam and Jon were no doubt pleased to find that the 'YES' bin
was full because they did not hesitate In resigning from their jobs the following day' Innocent
Drinks was born.
Given their financial constraints, they continued with their sampling by taking several bottles at
a time into local retailers one day and returning the next day to see if the shop owner wanted to
sell more. With the help or a capital injection or 250,000 from an American Investor, the com
pany has grown from strength to strength. Products include a wide range of fruit drinks. all of
which are made of 100% natural ingredients.
Interestingly, although not particularly scientific, some might argue that a key factor m the
company's success was the relentless sampling undertak(m by the entrE!preneurs at the begin
ning of the venture.
Ol e t' nc;
1. What type of sampling technique do you think Richard, Adam and Jon adopted?
What are the advantages and disadvantages of their chosen technique?
3. Discuss the alternative sampling techniques the three entrepreneurs could have adopted. Give
reasons for your answer.
Miriam, a final year Finance student. has decided to base her research on the relationship
between the marketing and finance function In accountin!il practices. Miriam is a parttime
student, and divides her time between studying and working in a local accountancy practice.
Several of her colleagues are members of the professional accountancy organization, the
Association or Chartered Certified Accountants (ACCA). Miriam has asked her colleagues to
speak to rellow ACCA members to see tf they would be interested in participating In her study.
In essence, Miriam has opted for a nonprobability sampling method  snowball sampling. She
is confident or generating a suitably sized sample as she has the ruu support or her colleagues.
Miriam's rationale for choosing snowball sampling is that several existing studies have used
the same sampling technique. Hence, she wishes to compare her findings with those of existing
studies.
Supervisor questions
1 Discuss the advantages and disadvantages associated with snowball sampling.
.. Describe the sampling design process Miriam is likely to go through.
What are the options available to Miriam if she fails to achieve a suitably sized sample?
4 In general, why are nonprobability samples popular among students?
The sampling method(s) you choose largely depend on whether or not you wish to infer that
your findings apply to the wider population.
A population is a clearly defined group of research subfects that is being sampled.
You need to consider a number or factors when considering your sample size. These include:
the confidence that you have in your data. earlier studies. the margin or error you can tolerate,
the types of analysis you are going to undertake, the size of the total population, and using
formulas and published tables.
In general, sampling techniques can be divided lnto two types: probability or random sampling
and nonprobability or nonrandom sampling.
A high response rate Is essential if you wish to infer from your results to the wider population.
If you generate a low response rate, then there is a greater likelihood for sample bias.
22a
SAMPLING
l27
(Continued)
tohm1tc, l1 1e ty pes ul t1nalysis you are guing lo uridellaKe . tile size CII the total pop ulati1111, and
using formulas and puhlJshetl tablr.s . In addinon, 1f op ting for a q ualitative resec1rch !>tra1e11y , then
t he we of your sample may not be urh an isslte This 1s b1?r<111sc th,. aim of your research is not
to rTidke inferences in relc1tinn tn the wu.J e r po,i ul at1on . but lo analyie a realIlle phenomenon
2. Can I use more than one sampling technique?
Answer: Do not reel that y ou have to restrict your research to one sam p lmg techniq ue.
However, bear m mind that certain sam p lin g techniques are perhaps better suited than otllers .
Comhrnrng j1 1 dgernent and convenience is not 11m1s1 1;i [ Bnth are nnn ,iroh,i hility s,'l mp l 1ng m ethods,
and there is a clear similarity between the two. I f . ror exam ple . you we1 e concerned with studying
the financial performance or SMEs in your region , yuu niay decide to choose those within a live
mile radiu s uf your hnme ( corwen1E11cc ) However, rf you are in lhl! fortunate position of having
nrany tiusinessl!r, w1thrn close proxrmrly , y11u would choos1! those that, rn vuur jurlgemcnt, were
perha ps likely to provide ltw most intere!iting findings (judgement sampUng ) .
4. t am finding it difficult to generate a suitably sized sample. Can I use friends and family?
Answer. lo :;orne extent. this depends on your resedrct1 q 11est1ons ,llld chosen methodolog ical
appr oach, II you decide to use convenience sam pling , then note the Lack of re p resmtat 1ve people
within the study. Also, you rn.1 y g et a biased set of answers because your res pondents !.lo not come
Imm ctirrerrmt demng rapll1c backgrounds. Stuilents cln sometimes includP. friend ilnd famrly as part
or their chosen sarn le. If you dP.cide to do this , It is irnoc tar 1t U1<1t you h1gl1Lig til your reasons for
Mop t in g convenience san1 lirrg and address the issue of p ossible bias rn your me111oc1olugy . One
.1rgu men1 for usrn g a small sam le hased on convenience samp ling is that your research rs
intender1 a a pilot r.t urty, p rior to concluctin g a targ,scatc piece of rec;earch.
Referenres
SAMPLING
229
lntrodurtion
In the preceding three chapters, we have loohd at issues surrounding the gathering
of Jata. OncE' you havE' completed your data Lollection, the next step is tu begin
analy'.l.ing your data.
This Lhapter is the firl of' Lwu that xplore tlala analysis, The chapter aims to pro
vide you with a soliJ grullllding in the different methods yuu can use to analyze quan
titative data. An indepth discussion of the numerous methods associated with
quantitativE' data analysis L,; heyond the scope of this hook, although L have included a
i
numher of' sources dedicated to quanliu1t:iw methods in the 'Further readng' section
at the end of this chapter.
The chapter begins by cunsiJering the nature of quantitative analysis and goes un
to describe Lhe various methoJs you may consider when analyzing your data. The
rnethods you choose largely depend 011 the purpose of yoUI rcsean:h. Moreover, cer
tain conditions need to be met before choosing your methods of analysis. For example,
the nurnber and types of variable you are looking to analyze will ultimately inlluence
your choice of quantitativE' method.
A gooJ starting poinl in your analysis is lhL' surnmari1..ing of your data.
Fre4uency tables urn b very usefuJ here. They provide you with a brief o vt;>rview
Descnptlvc sl3llstics
lnferenlial slslistics
Vi!lual analysis
Grounded theory
Narratlvo analysis
Discourse anely!IIS
Co nlon! anulysis
I nterviews
Oussllonnaire
ObservaUon
Secondary datii
Resaan::h
philosophy
t
Data analysis
tuchnlquus
6
/
1
Research
Malhodology
DatR collection ,___
5
<
flesearch
design
4
Epistemology: Positillim.
lnterpretlvlsm. Pmgrnali:sm
Ontology: Objactivism, Subjectivism
Axiology: Valuefree. Biased
Research
app1oac11
2
Research
strategy
3
Inductive
Deductive
Quantltallve
Qualitstlva
Co1nblnl11g quant1lailve and
qualitative strstaglos
(multi strategy research)
Casu study
Experimental
Lor1glludlnal
Crosssocllonal
Archiv11I anslysl e
Comparatlva
FIGURE 9.1
233
and describe Jatn, while the lattt>r , ust>d to rnoke inferences in relation to il wider
population . lnferentiill staristics cun alo;o be suhc.livideJ on the basis of non parametric
and parametric te.ts.
Parametric tests are regarded as mon: powerful us they assume that the observed
data follows a ,umnal distribunrm {we exami11c: this later in the chapter). Parametric
met.ho<ls un: use<l when you are able to t"stimale the parameters of Jistrihut1on in the
population Two of the main parameter.. are the ml'm1 JTIJ stwulard deL1iatinn. Non
pararnetnc methods are used where a normal d,strihution lJJlflol be ascertained. [n
other words, when you know nothing abot1t the parameters and have a small sample
size, then nonparametric: tests must he ue<l.
When corH.lucting your quantitative analysis, it c11n he viewed as a process that
uwolves the followmg stages:
preparing your data for analysis;
summarizing and presenting your data using tables and graphs;
describing your data using suitable statistical methods: and
examining relationships and trends between variables.
the task of preparing your datu for analysis mlld1 ea'iier. When assigning your codes
1t is important to consider the fi.11lowing puinl:. (B ryman, 2004: 146):
the categories that are produced must not overlap;
the List of data must take into account all possibilities, This includes missing data and answers
to open questions that might come under the heading 'other': and
there should be a clear set of rules goveming how codes are applied. This is to ensure that
coding is consistent over time.
TvnPc; nf li1te:i
The lrkdihood is that not all of lhe data that you have ,ollected will be the same.
In order tu select appropriatl" methods tor analyzing your data, 1t is important that
you understanJ the Jifferent types ot d:itn There are four main types of data:
nominal:
ordinal:
interval; and
ratio.
Case number
001
002

003
FIGURE 9 2
Age
34
45
26
d i
Gonder
Nationality
3
5
Highest level of
quallfiCalfon
2
Numinal data are data that cannot be measured numerically. In other words, it i named
data and incluJes values that can be classillecl into c..ategories. 11; for example, you c.on
duct a questionnaire survey into employee promotion, you may ht' mtl"rested u, placing
employees into calegorie,. Thus, 'trainee' may be coded as 1, 'supervisor' 2, 'manager' 3,
and so on There an a limited numher of methods that can be used to analy1.e nominal
data. Typical methods incluJe frequency counts nnd fu1t.ling the mode.
h
Like norntnal, ordi11al data are anotht>r type of caregonml data. 1 Towever, the
main Jifference is that unlike nominal c.lata, ordinal ciata can be rankorderecl. Let
us say that you ore interested 111 finding out the extent to which custome1 service
is important among a sample of consumers. Using a Likertscale question, per
ceived importance may he ranked from l to 5, wlure I  very important, 2 =
important, 3 = neither important nor unimportant, 4  unimportant, 5 = very
unimportant Exan1ples of types of analysis suitable for ordinal <lata includt> frc
quency counts and percentages lrom a set oF ra11lwd data. Note that the clistance
across your set of categories might not be equal. Regarding the Lw,tumcr service
example, we cannot say that those consumers who rnnsider rustomer service as
very important judge it to he 5 times more important than those who give a I although w can say what percentage of respondents lick each box on our 5point
Likertscille question.
ANALYZING QUANTITATIVE OATA
L35
1ntor11;::il
fotP.,..,,n/ dn tn have hPen :ich 1 eveJ when the Jistan<..e between the numhers are equal
across the range ror ex:amrlf', the diffcrencc h<"twel!Il 5 a.nJ 6 .u. 1. 1 his i<; equal to
the diffcrcn<..e between 6 and 7 'lhe temperature s<..ale!> of Fahrenheit and Celsius
aie typiuil examples of intcrval scalf'.s m that the zero in both scales is abil1ry. So,
vou cannot say that 30 "C is twice as warm a, 15 C. Wllf'n di>aling with 111tcrvR1
data you n<:'ed to he vtry rnreful nut to make such daims. The nw,rn, mode and
m<'tli,m can he u.,ed 10 desnih1 inll.:rval Jata.
Ra tio du ta arc very similar to interv;:il data. Till' distinction between t.hc two is that
ratio data have a Bxed :.wru point. Esamples nf ratio data include income, weight and
he1ght. Interval and ratio data allow for more prense lf'Vf'ls of 1easurcmc1_it than
categoncal data (nominal and ordinal) For example, a directors sa la1?' 1111ght bf'
_
giwn in exact figures (ratio), or listed in relation to other Jiret.tors w1tm the co
pany (ranked). lnle.rval and ratio data alo offer a greater numher nf options when 1t
wme!> tu Jula artalvsis. We C'{plnre some of thes1;: options later in the d,apter.
Just as the types of data influence your c.hoiLc uf an.i.lytical tool, the same can be said
of t.hc number of v.uia.hlt>s. In essence, statistkal mcthod.s t.:an be basd on the follow
ing numbcrs of variables univariate (one), bivariate (two) or multivariute (three or
more). The majority of methods assoch1ted with descriptive stastics a:e hased. on
univariate dstn. Conversely, inferential stafatics nre typirnlly assonated w1th b,vanate
nr multivariatr data.
Crcf ,..
We C'Ome across rndmg in Chapter G. All types of data should be coded numerit.:ally.
for example, the dirh o tomo11s 11,lriavle 'gcnJer' is usually ended 'I' and '2' when
using statistkal analysis software. The advantage ui <:o<l.ing is that it will ultimately
make your analysis easier and less confusing. Moreover, i.t is cssentiul ror most stn
tisti<..al software packagcs.
rnl 1 "[Ir"
Tf you are uncertain nf the number and complexity of your responses, you may
deci<lc to uuplemenl your coding scheme afte1 <lata collect1011 1 although for a col
lection Looi such as a questionnaire survey, a predetermined set o[ codes for each
C]Uf'St1on can make data cntry nnd analysis less ttmeLonstnning.
ll is csMmt1JI thnt you also code any missing data. failurl to dn so is likely lo impact
on the interprclut1on ol your resulLs. A missing dal,1 rnde LUil be used to UluLrate
why data are missing. For example, fl nonresponse might he indicatf'd by a 'O'
Coding m.issing Jata 1s required if you wish them to be ("xcludeJ frnm your analysis.
Missing data may :1rise for a nu111ber of reasons. These imJude a questilm h
1rrdev:rnt to a respondent; a queslion is left blank as the respoudent did nol wish tu
complete it; or a question is not answered because the respondent c.Ld not under
stand it. The latter ii, sometime!> a prohlem when conducting mtemalional or cross
cult11ral rese,irJi.
Yr r n t.:1
Summar.izing and presenting your <lata is likely to bl, the fint step in your analysis
It comes unde1 the hroad heading of dPc;criptive statistics (see Table 9.1) Undt>r
taking <lescriptive statistics not only allows you to describe your data, but also la
p1esent tt ma numbt:>r of different ways. Almost ,ertainly you will be familiar with
some of the techniques used Lo present descriptive statistics. These include fn:
qllency tables, bar charts, ric> chJrt.s and graph!>. Many slue.lies that engage in stut1st.i
cal analysis 11se Jescriptive stHtc,tiu. as a starting pornt. The main advantage of'
summari.l.ing the Juta in this way is that it provides t.ht' reaJer with a simple over
view of your dala prior to more detailed 011alysis.
Tahle 9.1 shows the various mf'thocb that can he U!.c<l when describing your data.
Column two highlights the purpose of each met.ho<l, while column thtct.' shows a
brief example of how each method might be npplied. 'I he application of ea<..h of the
methotb Jepen<ls on a numher of factors. Tht>se includf' the number or v:iriables, the
lypf' of data anJ the purpose. I will now Jiscuss each llf the methods listed 111
Table 9.1 in more dt>tail, mduding the advantage a11J <lisadvantnges of each one.
If you have a<lopted a deductive approach to your research a11d already huv a set
of predetermined categories, then you will most prohnhly rnde your categoncs on
your qucslionn.1irL survey. Certainly the advuntage of coding at this c;tage is that it
will save ti.me later when carrying out your a.nalysi.!>.
A good starting point when Analy:t.ing vour data is to look at the freq1w11ry d,strihu
rion for ead, voriablt' in your stlldy A fre,7ue11Ly is a numerical value that illustrates
the number of counts for an observed variable For instance, you might be interesti:J
in thl' number of cars company directors have.
231
TABLE 9 1
Exd'T1[ 1le
f d 5 np\lve "il11 t s
TABLE 9 3
FP
Method
Purpose
Examples of application
Class()
Frequency tables
Graphs and rh;uts
Mean. metJian. mode
Summa,izlng data
Summarizing data
Measuring c.e111 ral
le11der1cy
Measuring dis1nion
< 10,00U
10,000 < 20,000
2U,OOD < 30,000
30,000 < 40,000
4 0,000 < 50,000
Standard deviation
Me<1swing dispersion
Describln'il r.h;mge
Frequency tlislrlbution
rrequency distribution
Frequency distribution
When cnnstrucUng a frequency tahle, Jal:i are :i.rrangecl in rows anJ columns.
There a re numerous ways lo present a frequency table. indeed, you probul.ily come
across a variety of examples on an almost daily basis. Examples include everything
from schoul Lo football leagtJe tables!
A table is also a good sta rti ng poi nt Fo r both pre:,enting and summarir,ing ym1 r
quantitative fi ndi ngs. Tab le 9.2 shows an exam ple of a fre4ue.ncy JiLribulion tahle
based on 1 5 company Jirectur and the number of cars Lhey havt:. Of course, a
response is n ot always guaranteeJ. If Lhis were the case, Ollr table would also foaLure
nmresponse frequencies.
Ta ble 9 . 2 not only shows tbe frequency distribution for cars, it also shows the
percentage freq uency distri bution . This shows that 33.3% of directors have one car,
26.7% have two cars, 26. 7% have th ree cars and 1 3 .3% h ave four cars. A perc;Pn tage
frec ptf'ncy distribution makes a useful addition to a frequenLy table.
Using a small 1:>a.mple size SuLh as th at for Table 9 . 2 is straightforward to incor
porate intu a frequ ency table. Huwcver, adopting the same approach for large
samples is simply n ot practical . 'l'o overcome th is problem 1t is a good idea to group
your observed valuPs into classes. For instance, if unrlertaking a large su rvey on
TABLE
9.2
Jr
Numbl!r of cars
quenry
1 1 111 1 n
nu1n11r r r
t1l
Frequency
1
')
4
4
2
.H 111
m ill
1 1:. ect
Percentage frequency
33.3
Lnrv
r,
Frequency
j
11
3
1
l dfll: alliOI I
crnpl!JYfles
Cumulative frequency
lo frequency
Cumulative % frequency
i
14
12
44
28
56
21
24
25
12
12
84
96
too
empl oyees' sa lariel>, you ran group the respondents intn classes based on i n tervals
oi (5, 000 : for example, 1 0, 000 or more, but less than [ J 5 ,000; f 1 5 ,000 or more,
bt1t less than 20,0 0 0; and so on . Usmg in tervals of 1::5 ,000 is rea0n ah le given Lhe
likel y variation in s::ilaries. However, wh ere you are l i kely to have a wide range of
observed val ues, you may wish to group them into slightly l.i ru aJer cl asses.
Con versely, a narrower range wou.lJ best suit a smaller nu mber of classes.
The obvious advantage of grou ping your dnta is thal it will n,ake your lahle and
result!> look more presentable. /\ potential problem is failing to recogni ze th e types
of d:m1 you are using when forming classes. Par example, w hen w;i ng continuous
data such al> salary, it is sometimes easy to allocate data wrongly due to poorly
defi ned in tervals between classes. Let LI$ look at an exa m ple of a fre4uency distr1bu
tion table showing grou ped data (see Tahle 9 . 3) .
As well ::is showing grouped data, Table 9.1 also induJes a nm1t1lati ve frequency
,rnd cumulative peru.:.ntage Freq uency cli Lribution column. A cumulative figure 1s
obtaine<l by si m ply adJing the observations from the previously stated Qower)
cl nsses. For exam ple, when establish ing the cumulativl." freqt1c.nLy for the third cl ass
in Tahle 9 . 3 , we sim ply add the lwo lower classe, 3 + 1 1 t 7 "" 2 ] . The same pri n
ciples apply for the curn ulative pcrcen tage frequency ditrib ution .
So for, we have exami ned frequency table.s in relation tc) uniuariate data. freq
uency tables are also useful for examining bivariate data. A table that al lows you tu
examine the relationship between two variables is called a crosstnb11latio11. We shall
address this later in the chap ter.
Diagrams or ilhtstrations can be a useful way of presenting your data . Like.: tables,
they help to hreak up your text and can make for very interesting reading. The main
types of diagram are graph anJ ch arts
26 7
Gr::>r' "
13.3
A graph is a type of diagram used to present data. A graph can be used to analyze
bivariate or m ultivariate Jata. Waters (1 997: 107) offers the followi ng advice when
26.7
L39
30
25
g!
1ij
20
15
10
.___/

TABLE 9.4
Companies

MMP Builds
30
II' Lonstruct1on
20
15
Al Developments
J11n.
Ma 1.
Feb
r r ,;even
TML Build
11
KMr
Apr
Glul.Jal Plex
FIGURE 9 3
hdre r g ir
7 B11i1t1
Others
producing graphs: as graph5 give a very slrong initial impact, the choice of scale for
the a.xe:; i.s U<!arly 1rnport:1nt, with a baJ choice giving 8 tnlse view of the data.
Although tlK choice of scale is largdy subjective, some guidelines l'or good practice
can be given:
KMC
8%
Piri c11art,;
I\ pie cltan is llsed fo1 summarizing 1..ategorical data. A pit' chart is JivideJ into seg
ments. Fach segmPnt represe11ts a pat ticular category The size of each category is
proportional lo the numher of cases it represents. Typ1t:ally, t.!1c number of cases is
represented by J pcrc.cntage. Each segment has a different colour 01 pattern to
dearly distinguish each category.
24 l ESSENTIALS OF BUSINESS RESEARCH
Othors
2%
AC
Developments
11%
TML Build
15%
FIGURE 9.4
JP Construction
20%
Pie cltarli. art> stra1ghttorward Jiagrams th8t compare a lrmrted amount of data.
By way or illw,Lrntron, let us say that you nr<" conccmeJ wrth the presentation of
market share figure), for seven construt:Uon companies. You may begin hy summa
rizing your <lata in the form of a simple table (see Table 9.4). rigure 9.4 shows Lhe
data from Table 9.4 incorporated into A pie chart.
'l'he1c ,HP two main aJvanlages ac;sociateJ with pit> chorb. Fin,t, th Py are a
clea, way or highlighting proportional ddterenc.cs. Second, the use or different
colmJrs mukes it easy to distinguish between categorici. Conversely, sometimes it
can ht> difficult to divide categories into segment This ii. t'spt>C'ially true with
fragmented data or when there are a large numher nf CJtcgories.
ANALYZING QUANTITATIVE DATA
"l
TABLE 9.6
w II
111t
TABLE 9 S
Agency
Hall Media
BC Global
)LC
T M1!dla
2,
15
20
15
40
22
HR
18
30
rinance
Marketing
16
10
Frequency
Groups
O 10 minutes
19
20
45
1120 minutes
22
21 30 minutes
28
3140 minutes
13
'110 minutes
50
gj 110
a.
30
lil
20
10
r.
Hall
FIGURE 9 5
Nunil.Jers
JLC
BC Global
Media
T Media
Agencies
o
__F_i_na_n_c_e__o
__M_ar_k_e1_1n_g__,
CJ H_R _
_
f t>lllplOyfe
,n
lvert, ,ng
P 
as 1ries
rr
A bar clzarl is similar to a pie chart in that it compares a simple set of observ
ations. However, instead of sectors of a circle, hars are used to represent the data.
A bar chart 1s a straightforward way of summarizing either ordinal or nominal
data. It mvolvPs h1varrnte analysis of the main characteristics of the distribution of
thf' data.
Essentially, there are two main types of bar chart: horizontal an<l vcrtkal. Each
bar is th!:! same width, whcrea the length represents the number of cases. A har
chart has a gap between ead1 bar, while a histogram does not have any gaps because
it represents continuous data. To illustrate, there are four advertising agencies loc
ated in a small town. The number of cmployes in each of their respective
<lL:part:menL,; is highlighted in Table 9.5. Now, let us put thcsl'. data into a 1,imple har
ch:lrl (see Figure 9.5).
The main advantage of a bar chart is that it is a simplistic way of illuslrating
tht> relat1onsh1p between two variables. On the othf'r hand, a disadvantage is
that a large number of case:, representing small values can make thf' chart look
cumbe.rsoml'..
2
>,
0
u:
50
45
40
35
30
25
20
15
10
5
0
010 mlnute5 1120 rnlmJles 2130 minutes 31 40 minutes 4150 minutes
Groups
FIGURE 9 6
H1 ICK di I 11 W I
ANALYZING QUANTITATIVE DATA
43
data is i.llust1aterl in J:.'lg11re 9Ji. The yaxis is the ielative frequency, whilP the xaxis
hows the waiting ti.mes.
If we iire dealing with a set of grouped data, then we need to use a dilfl"renl
formula for rnkulating th<." mean:
x = !Ix
r.r
whl"re;
%  e,Kh observation
f"' Lhe freciucncy
l. = the sun, of
For PXamplc, Table 9.7 shows the momhly bonuses arnong sale!> :.taff :mJ i.s grouped
into dasses. Using Ll.til, fonnula, th' me;:in monthly sales hon us is:
x = r.tx
_ 7.
rt 30
aoo
= r260
Mean
The mean (x) is the arith.mcti<..al aw:rage of a frequency distribution. The melhod
uf calculating the arithmetic mean is:
I
I
TABLE 9 7
Montnty bonus ()
rx
Mean (X) =
n
where:
.x "' each observation
11  Lhc total nl1mber of ohscrvatiuns
:E = the sum of
for example, if a car dealership wisht"d to And the mean number of cars sold
over Lhc wursc of a wed, Lhc process would he a1> folluws:
Frequency ( f)
<100
100199.99
200299.99
(fx)
so
350
150
600
250
1500
300399.99
400499 gg
350
1750
8
J:.f 30
450
3600
Itx 7800
Median
The medtan is also sometimes referred to as an average. It is the middle numher in
a set of numbers. The median can be tound using the following fonnula:
Number of cars sold over six working days: 12, 16, 14, 11, 9, 10.
rx
12+16+14+11+9+10
= 12
=
(X) =
6
The nwnber of cars old ovCT Lhe courst' of tht' week is 12.
where:
M n+l
T
= number of observations
ANALYZING QUANTITATIVE DATA
245
1
l
..
For example, suppoe you wanted to find the median m tht> following set of
numbers: 42, l 6, 38, I I, 9. '1 hP ltrst step t<; to put them m ascending ordl:!r: 9, I I,
Hi, 38, 42 Next, apply tht? tormul:i:
M = n+l = 5+1 = 3
2
2
So, the rned1;Jn is tht' third numher in the sequence: ] 6.
lf our list 1s made up or an even number, we can simply take the midvalul:!
between the third and rourth vulucs. Fur example:
8, 15, 18, 27, 39, 45
18+27 = 22.5
2
Our median is halfway bl'.lwcen the third anJ fourth values in our set of dim, (18
and 27). Tht>refore the median is 22.5.
The median has two main advantages. First, 1t can he u.,;ed with ordinal, interval
and ratio data (it cannot be used with categorical data). Second, the mecLan is
unaffeLlcd by outliers. Tht? Jisadvantages are that the median may not be a char
aLtcrislii.. of the <listrihution if 1t does not follow a normal distribution, iind it can
not be used for Further statistical analysis.
Modn
The modi> is the value that occurs the most often in yom set nf data. Tr, fnr exnmple,
we have the set of data 15, 15, 8, 9, 12, I5, 24, 2, 6, 15 tht! mllde b 15, as il appears
the most often: 4 times.
The advantage of' the moclc> 1s that, unlike the mean and median, it can be used
with nominal Jata. Moreover, it is vcry stiaightforw,ird to determine and is 1maf
fccted by outlier!.. The Jisadvantage or the mode is that vou can end up wi th more
tlrnn one mode value Moreover, 1t does not indicate the variation in a set of data
and 1s sensitive to additional observations.
Measuring dispersion
A key limitation or mcaSLJring <.:cnlrnl tenclency is that it does not give us t1n indka
tion of the shape of a frcquc1Ky clistribution. A measure that allows us to dt?scrihe
the spread or values 111 a Jislribution is 1 derred to as a measure of disp,,rsimz. By
combining measures of (enlrnl tenden,y and dispersion you rnn gain a useful
description of your st?t of data Typical methods used to measure clispen,ion include
the standard de11ic11ia11, range and mtrrquartile range.
2
The standard dev1at1011 is represented hy S for sample standard deviation anci cr (lower
case sigma) for population standard deviation. Thf' st.1ncbrJ dcvialion measures the
sp1 eacl of clata around the mf'an value.
The tcps in rinding thf' ,;tand11rd dcvialion l an ht> sununariLecl as follows:
Find the mean in your set or data (i.e. the difference between a particular value and the mean  see
Table 9.8).
Find the deviation from the mean for each value.
Squar e the deviations from the mean t o get rid or negativ e values (failure to do so will lead
to an answer of zero).
Find the sum of these values.
Divi de by the number of value s In order to get an average (also known as the variance).
Find the square root at the variance in order to tind the standard deviation.
n1
where:w
S ;;:: the sample standard deviation
x = an observation
 the mt>an
n = the total numher of observations
V = the square root
I: = the sum of
Pleast? note, when calculating the standard deviation of a small sample, a hetter
estimate is gainc>d hy dividing by (n  l) rather than N
The formula for a set of grouped data i!> as follows:
J
I:ifxf
where:
S = Lhe sample standard deviation
r = the midpoint of each data class
f = the frequency of each class
V ::::: the square ioot
l. = the um of
By way of illustration , let us say that you are rescarlhing the number of tim<"s
(x) a printing press hreaks down over a period of six months (see Table 9.8).
ANALYZING QUANTITATIVE DATA
47
TABLE 9 B

(x.i)
(XX)1
1
4
10
2
0
1
5
g
I
6
]
Total
42
S= {415 = 2.58
v
c;
25
40
An advantage of t..he slun<lar<l Jc\ iat1on is that it w,cs l'Very value 1n the popu
lation or group of sample data. However, hPcause all items in a data set are used 1t
l30 be innucnccJ by extreme values.
Rc1nge
ThP range is found by suhtrncling the lowest value trom the highest value 111 a set
of <lata. If, for e'l:amplP, we have the set of data 5, 6, 7 , 8, 8, 12, 13, 15, the lowest
value i!> 5, while the hight i. 15. By subtracting the lowest from dtl' highest we get.
15  5 = 10. So our range is lO The: main aclvantage of the range is that it is easy to
cakuhte anJ provides a clear mdtcation as to the broadness or n::irrnwnt'ss of a set of
data. A key disadvantage is that n range bascJ on a sm3ll sample size is likdy lo
exclude .xtrc1ne values. Conversely , the greater the sample size the greater the likcli
hood that e:>."treme values will he inJuJct!. Another disadvantage i!> that it Joe!> not
tell us anything about the values within the rnnge.
lntorntartile ram'.!e
As noted E>arlier , une uitic.isrn of the range is that il Lan be greatly affetted by
extrem<' values. The interquartile r:rnge helps to overcome this problem by ml:!as
uring thl! spread bet wePn thl" UJ1Jlf'r anJ luwe1 quartilr>s of a set of t!ata (the
miJJlt' 50%) A, the inlf'fquartile range 011ly focu<oes nn the miJJlL 50% of a
range of data, tt is not as sensitive as the range, althm1gh it i!> lcs!> susu:ptible to
outliers.
Finding th!! intcrlluartilc: range I eqwres thf' following steps:
List your data In order of size. beginning with the smallest first.
Find the position of the median.
Find the median In the data to the left of your median (lower quartile).
Find the median in the data to the right of your median (upper quartile).
Find the difference between the medians for the upper and lower quartiles. This gives you the
interquartile range.
24E ESSENTIALS OF BUSINESS RESEARCH
T!w follumg ex.unple hows the tutcrquarttle range tor a sE't of data. A small l'lec
tncal 1etailer h,1s ncnrded tht numher of rPturncJ items over a 12montb periot!
(see Table <J.9).
TAtllE
14
1}
22
15
23
13
26
lll
10
10
13
12
14
18
16
22
26
= 9+10 _ g 5
14,
16,
Median 135
18,
:n
23.
26
Upper quartile 20
N 11 er
9
I rr,
10
ltf'
12
13
14
16
18
22
23
=]8
9=9
40
[) '"rr:111'1"" li 1"'P
Measuring dispersi on allows us to l;'Xaminc tht: sprPaJ of data. However, this is
hased on a fixed pornt 111 timP. 1lnw can we examine dula thal change over lime J
For Pxample, tht: percentage changes in fuel pnces, house prices ur inlt:rt:sl rates?
One mt:thml to proJucl! a simple in<lPx.
TABLE 9.13
"'
ur
Vear
1978
800
1'l79
932
rnao
1,024
1981
l,Q98
1982
1,200
CIP
i: c/p x 100
filW 100
BOO
100.0
x lUO
116.5
BOO
1, 02'1
800 X
100
l.098
100
ROO x
1,200 X 100
800
lnde number"
An index number shows how a quru1tity change1. uver time. Usually, the base period
equals I 00. Two of the most widely recognized indices are the ITSE I 00, which is the
list of the UK's toppcrfouni.ng 100 companit:s, and tbP Retail Price index [RPJ1, 111e
latter exam.i.r11:s how peopl<' spend their income. It measurt:s the fluctuation in the cost
of o representative basket of goow, and services. Tht: RPI commencc<l in l 94 7. This
the refure represents the base yt:ar. The basf' year can be represe>nteJ by any given year,
although it is l)'pically a decade or more.Th.is is for two reasons. First, histoncal data
are oen widely available. Second, when analyzing ,hanges ovCJ time, we need a suf
ficient number of Yt!ttrs to identify any prn,sible trends.
lt is also worlh noting that the hasc year does not have to hf' I 00. Por e.xample,
the ITSE 100 of leading shares has a base ot 1,0ml.
T he formula for calculating an index is as follows:
x 100
128.0
137.25
150.0
The next step is to apply Lhf' formula so that we can clearly compart: lh t extent
that the data has changed over Lime (set: Tahll" 9.13).
Weihted inr4., 111mhPr,;
A simple idex such as car prices is fine if we are rnnccrned about one observation over
tune. Yet, 1f we hnve a numbe1 of items, it is unlikely that Wf' wou]J assign equaJ .i.mpor
tance t each itl:'m. ln order n address this, Wt: can allocate a weighting to each one.
:yp1cally, a we1ght1.:cl price inde..x is calc11lakJ at the end of each year, thP n com
pansons are made over a given time period. A simple piice index ca11 be u,;ed
Lo
rnkulate the end yf'ar weighted price index. This is known as P::i asche's Price Index
and is represented hy the formula;
where:
c/p = co:.t/price
b = hast: value
Let us look al an ex::1111ple of an inckx. Tablf' 9 .12 shows how the average price
of a new car has changPd over lime. The base year (the first year when Lhe <lata was
collected) is ] 978. Remember that 100 npresls the hasl:' year.
TABLE 9 ll
Vear
Av
l\lE' ,
r n 11 n w r 1r,;
11 P
1978
800
1979
932
1980
1981
1.024
1982
1,098
l,200
where;
P0 = ba.se year prices
P. = tht: current year pricf's
Q11 ..: current year quantity
Paasche's Index can only be calculated at the cnJ of the current year as the
_
we1g h are current year quantities in a pricC' index. To illustrak, let us say
that a
_
_
spccral1st car manufacturer huys thl: following products from one of its supplier
i.
du.ring 2004 and 2005 (:.t:eTahle 9.14).
Sum Of pn X Qn : (25 X 42) + (20 X 36) + ()$ X 20) + (45 X 22) = 1050 + 720 + 700 + 990 = 3460
Sum of Pn X 0,, = (20 X 42) + (15 X 36) + (30
Thus, PaasUJe's Price Index
=i':J3
20)" (40
x 100 =120.98,
'!il
TABLE 9.14
Parts
Car tvre
AldlfllS
Bumpers
Radios
u has, (2 1 4/1 1)
up plier
2004 Quantity
COo>
,o
2005 Quantity
(pn)
(qn)
30
15
40
JO
30
40
2'i
25
4,
35
20
20
36
45
22
Crosst '!bulations
vi
i
I
I
Scatter dl<1f'rams
A scaller diagram (sometimes referred to as a scatter plot) is essentially a graph used
Lo assess the relationship between two variables. The>se are the lnJependent variable
rn,i.11g the .laxis, and the rlep endent v::iriablf' the yaxis. The two variables are plotted
on the graph to see whether or not a relationship emls.
TABLE 9.15
Nationality
m:,s lrJI ul t1 n s, owing lldtlondl IV lJV 11en e lur !JU 11 IC', ":., l11J0l tudu1h
Male students
British
Chinese
rrench
American
German
Other
:zs. ESSENTIALS OF BUSINESS RESEARCH
148
21
22
16
10
14
Female students
136
Fig1rt> 9. 7 how'l the relationship bet ween thf' d1sta11ce travelled by car and
petrol consumption. This i a strong positive linear correlation. In uther words an
iflc:rease in the value of one variable is associated with an increase in the valu of
th<' other. In Figure 9. 7, an increase in distance travelled (x) is associated with ari
i11crease in petrol ccmsumptioL1 LvJ
A negalive rnrrel::ition hHppell when an increase in the vah1e of one variable Lo;;
::issociate<l with a decrease in the value of the other. For example, higher levels ol
unemployment might he assornited with lower levels ol' car snli?s. It the points are
sratlc1ed rnndumly Ll1ruughuut the graph, there is no correlation between the two
variahles. Anotber possibility is that t.be variables shl.)W a nonlinear ndalionshi.
For examrle, this might be the case whcri. t.:.Xamining the relationship bt:tw<::en age
and weight.
An out.lier is a value Imm a set of data that i!> inctmsistent with other values. It
can lie muLh larger or muLh smaller tbm other value!>. You should not" ignore an
ouLLe,, as it can impaLl on the rc!>ults of descriptive statistic.. such as the ne;in. An
outUer ,an be caused by one of two reasons  an error in measurement or radical
behaviour from one of the participants. Either way, you need to establish reasons for
the inconsistency before progressing with your research.
Multiple bar charts
A m11Ltiplc hnr dum is a little more con1plcx than a simple bar chart. Jt is u chart
illustraling two or more variables in the fonn of bars of length proportional to the
magnitudes oft.he v11riables. for example., Pigure 9.8 shows t.he output of a drinks
fartory over four years.
Figure 9.8 clearly shuw1. the changes in production output for cola, 1tpple
juice and lj;'monade over a period of tliree years. One might assum that the
factory i. performing well as the output for cac.h type o drink has i11c1eased year
on year.
30
25
'S
(JJ
'= 15
0.
10
5
14
23
28
16
19
20
FIGURE 9. 7
20
60
40
80
100
Distance lravelled by car in miles (x)
120
140
35
30
25
2
0
0
20
15
10
5
2006
ola
FIGURE 9.8
2006
2007
Year
CJ Apple juice
c:::J Lemonade
The advantage of a multiple bar chart is that it allows you to compare variable.
Conversely, as in the case of our <lri.n.ks factory example, they only de>s,ribe data Rnd
do not provide fill explanation of why variabks are of a ce>.rtain vali1e>.
Inferential stnlistics are used to drnw inferences about a popufotion from a given sam
ple. As noted earlier, inferential stati!ttiC:S c:an also be subdivided on the basis of non
pr,m:mwtric an<l parametric tests. A paramelric ll:St should only be applier! if the following
conditiom are met: you have interval or ratio d::ita, your ,;ample is randomly drawn from
the population, and your sample iS from a population that is normally distributed. The
1umnal distribution or bell cun1e is a grnph that shows data scores that accumulate around
the middle. The nom,al distrihution rroroses t.hat the mean, mode and median are all
equal. For example, Lhe results of an exam would show that the majority of e.xam scores
would ctn: round t.hi.: miJ<lk when t.he frt:que11cy curve is symmetrical. Wht>n the
frequrncy curve is skewi.:d, the mean, mode and median ,ill have different values.
Determining whether or not your sample is from a population that is normally
distributed ls imrortant as it will influt:"nce> your choice of stafatiuJ tests. One can
make this assumption using something called the Ce11tral Limit 11ieore111. The Central
Limit Theorem is bascJ on the notion that the average in a set of sample data drawn
25 t ESSENTIALS OF BUSINESS RESEARCH
Method
Purpose
Hypothesis testing
Estimation
Estimation
forecasting
Measuring association
Measuring difference
Student's t test
Measuring difference
Measurln!l association
Examples of application
Estimation
fati111arinn reff'rs to esti mating a pop ulation parameter from samp le!>. It is unl i k e. l y
that you will he i n the fortun a ti.: position to have access to th!;' enti re popu lati on . If
you have adopted a posit ivist approach to your rcsc,in:h , the l i kelih oncl ls that yo u r
intention is to estimate from your sample ch aracteristics of thL populat ion .
'l'wn meth nds commorJy useu tn f'sti n, atf' fro m ,;ample,; .iri.: hypothesi. testing
_
and confirlrnce in tm.,al.s.
Hypothesis testing
Hypnthf's1s tf'st i ng is one ol the mai n method\ used in i n terentiul slatisti,s . It
1 11volves m::t ki n g a statement about some aspect of t h e pop u l ation, then ge n erating
a samp le to see if the hypothesis can or t.annot be rejeLte<l . Tn tf'st a hypotlies.u. yo u
ni.:e<l to formulate a n ull h ypothesis (HO) and a n alternati ve hypothesis (H J ) The
fonner m akes the assumplion tl111t there is t10 cha nge in the va.lttc bcing tested . For
example, ' no change ' could_ relate to ' no difference' or ' no correl ation ' . For each null
h ypothC's is th er is an al ternative hypoth esis (H I ) . /\ n lternative hypothesis tends
to hf' vaguer than a n u ll hypothcsi1>, as will become apparl:'nt later on. The probabil
i ty of rejc<.ting th e null hypothesis whi.:n il is lrUc i:. referred Lo as the significan ce
lcvcl. If thi.: 1.ignificanc:e level is p < 0 05 (5% level) , tl1en you rej ect the n u il hypoth
esis. Converse.ly, if tbl:' significance l evel is p ?. 0 05 then you cannot re ject the null
hypoth esis. Be careful with your wordi ng. We cannot say 'accept ' . The umvPntion
among researchers is to use ' cannot reject.' the null hypothesi,;,
An example of a n ul l hypothi.:i!> might be:
HO: The.re is no difference between the 11alue of bonuses among 111(de and female
employees
I1 1 : There is a tli}Jerence het,1,PPn the uahtl' of bo1111ses among male n11d Jerrule
P1'rlf}/vypps
The step!> in hypothesis testing an: as follows:
State your null (HO) and alternative (Hl) hypotheses.
Choose a level of significance (typically the 0.05, or 5%, level),
Collect your data.
Carry out statistical tests.
Make
011 1;'
t Reject the null hypothesis (HO) and accept the alternative hypothesis (Hl). or
1. Fail to reject the null hypothesis (HO) and subsequently note that there is not sufficient evidence to suggest the truth of the alternative hypothesis (Hl).
Type I errors and Type II errors Once you have rnrri<"d out your hyp othesis you should h ave
rcaLhed a decision ahout whether lo rejecL or not reject your null hypothesis, alLhough,
<lut lo sampling varialion, your c0t1clusiun will be subject to error A type 1 error is where
the null hypothesis is true hut rejected , wh.ik a type II enw is where the altemative
256 ESSENTIALS OF BUSINESS RESEARCH
TABLE 9, 17
Accept HO
Reject HO
H1 is trul!
No error
T\lpe I error
Type II error
Nn PJrOI
hypothesis JS true but rep.:>cted (see ' l 3ble 9. 1 7) It you set your level of significance too
high (e.g. p > 0.0 I ) , tht>rf' is a greater likelihood of you making 3 typ<" 11 enor.
IVP" L 1ypolht' ,,, t st RPfore carrying out a hypothesis test you 11eed ro Ji.:Li<le
wh ich ty(1f' of test to use_ There a.rf' two types of test. ' l11e Hrst of these is refcm:J
to as a 'twotailed test', while the second is a 'onetailed test' Your choice is important
11.s 1l will impact on how you word your altl:'mati ve hypothesis. Let us look at Pach
one iii tu1 n.
A twotailed test ls carried out to see if your hypnthesis is above 0 1 bclnw w hat
you presume it to be. For exam ple, you might helieve tha t training (i.n di.:pen<lrnt
variahle) h as an effect on company performance ( dependent variable) but you can
not pre<lict the JireLtion . Whi.:n the alternative hypothesis (T1 1) is written fl not
eq ual lo (:t:) , then you arc ind icating your in lt:nlion lu ca rry out a twotai led test.
A on.i.:taili.:c.l lct is usi.:d w hen you arc ma.king a preJiLlion lhat the.re will he an
effect in a particular direction . For example, if students are given extrn cla sses (i.m le
pendent va riable), their exam marks w ill increase (dependent va riable) .
If' conducting a lefttailed_ tesl, I I 1 is writtf'n as follows:
Hl: < 200g
If con<lucting a righ ttai led tes t, 11 1 is written as follows:
H1: > 20Dg
Confidence intorval
A confide11c;P int(?'Tual uses a range o f values t h a t i s l i kely to comprise a n u nknown
population parameter. A parameter is a pop ulation characteristic such as ri propor
tion (.P) or mean (m) . CunuJcnce intervals are generally more lLeful than stniight
forward hypothesis ti.::;lS as they go beyond a sirnpli.: 'reject the null hypothesis' or
' do not re1ect the nul l hypothesis' by providing a ra nge of credible values for the
popuhtion parnmetN.
First, it f,; i mporta nt tCl make a cli,;;tinction between contldence intetvaJ aud confi
dence level. For f'Xample, if ynu collected data on joh eC'llrity from fmance managers,
75% mlght say that they [ell ' inst:cure ' in their job. [ le.nee, you m ight say that 75% nf
fl.na nce managi.:rs are insecure. You could support this by say ing that you are 95% cer
tain (con.fide.net: level) that this will represent the true population 95% of the Lime.
ANALVZING QUANTITATIVE DATA 257
If. for example, we take a sample of 200 employees and find ii mean age of 35, can
we be sure that the mean age 1s representative of the population? lJnlortunately, our
mean (or point of estimate) is unlikely tu be the:> same as thL population, altllUugh it is
likely to he dost> to the population mean but have some c:>rror L1 order to address the
problem of our point estimate, we can define a range (confidence interval) within
which our population mean is likely to tall. The confidence intPrval is expressed with
R level of confidence that the inte, val contain.s thf' true population parameter. lypically,
most researd1c1s use a 95% ,onfidcnLe level. Thie; me::in that 95% nt tl,e prubahility
falls between z vn 1 ues of I _ l)t, anrl + 1.96. These represent the most c:om111only used
critical value for calei dating rnnflrlence limits. A cri.tical 11al11e or zscorc rc>lates to the
nwubcr of standard deviations t.hat the .:;ample mean departs from the popul Ation
mean of a normal tlilrihutton. Other examples are shown in Tr1hle () 18
A confidence interval is used to t>stimate the true mean of your emire popu
lation (rr) It is rcprc:,cnted hy the formula:
where:
,, = population mean
x = sample n,enn
= margin of errors
z = critical value
cr = population stantl:ird deviation
n = s;imple size
2i
0.7(10.7)
100
0 71.96(0.046)
0.71.0.090
0.71.96
(0.61, 0.79)
ForPratin
1.k
z  uitirnl value
p = sample proportion
11 = samplt> stzP
,J = square root
'J'hus, we are 95% confident that the true proportion of small firms who have an
employee with a higher e<lurntron qualification is between GI% and 79%.
fl
Now let us calculatl' the )5 1!h confidence interval for tit<.: proportion of small flm1s in
CambriJgc that lrnve flt least one employee who holds ::i higher eduLatioo qualifo.:ation
20
= 180 1.96x r.::
v150
3.19
where:
Ip t 1  P>
Let us say that you have rnndu<1ed a study inlo the rerformanc<.: of manufactur
ing machinery among a sarnple of 150 companies. Your Hndings produce n mean
length of operatJon before the mach111ery needs servicing of J 80 hours, with a
standard deviation of 20 hours. You now intend co detcrrnine thf' 95% ctmflJence
interval for the overall mean lengtl1 of operation prior to scrvidng, nmnng all com
panies that u,e this type of equirment.
le el r I
P :1:. z
Let us say that you have conducted a study into higher education qualifkations
among sm11ll busine,;ses in Cambridge. From your random sample of 100 companies
you have estahlished that 70 small firms have at le:u.t one \.'mrloyee who holds a
higher education qualification, t.hus x = 70 Jnd II = 100.
= x z
TABLE 9 18 C ,11r1dc n
l 1!11 1) V l e
In the above example, we assume that t.he standard deviation of the pop ulation is
known. fn reality, it is unlikely that we would know the standard Jeviation of a popu
lauon but not it:, me,111. ln most case:,, rcsearcheis need to tllic the sample :,"t::mdard
deviation (S) and mean to estimate: the population mean and standard deviation.
If you have :i sample srzl' n > 30, fl confidence mterval can nlso he use<l to esti
m,ite the rroportion in a population. This i:, rcprescnteJ by the l'ormula:
forecasti11g can he def'.u1ed as the estimation of a set uf values at future point m time.
forecastig plays an important role in business. fo, example, many organizations
engagl' in sale:, forecasting to mainlau1 better control over 11we11tory lcvds, while gov
crnm<.:nts forccast levels ot inflation m1J unemploymt>nt, nlung with eLOnomic growth ,
to determine npproprr:ite govemrnent policy. Forecasting flnandal data such as share
puces i5 also important for both individual and organizational decisionmaking.
There ar(' several different method,; associated with forecasting. These incl11d<."
qualitative met.hod:, and economic mode.ls. In this section I introduce you to on<' of
ANALYZING QUANTITATIVE DATA
59
the moin categories assornited with fnrecasung  time senes a11aly1s. This is an intro
cluction to the subict.t. for a mo1e detailed d1scuss1on on time series analysis you
will need to consult a book dPvoteJ to fon:t.:astmg  see the Punher Reac.ling section.
Time series
1""1('
A limf' senes is ;1 se11es of data rninl'i that art' typically mt>asurP<l over regular Lime
intervals. Time series :rnalysis involves using ,a1ious methods to understanJ a time
series in a 'historical' context, as well as lo make forei..asts or prcui<.:Lions. In rdauon
to the latter, we shall now Pxami1w two of thf' rnmmonly used methods of time
sf'nPs an:ilysi,  'simple moving a, erage' anJ 'wdghtt>d moving averagt:'.
A .mnple mo11i11g auerage is used to compare possible changes in a variable over tune.
ft 1s found hy calculoting the mean for a given timt: period. For examplP, let us say that
yuu carrif'd out a study ullu the ages at whid1 inJ.ividua6 were aprolnted a!> Chief
Executiw Officer (CEO) for one partiLLilar company Since the firm\ inception in
1978, you have cstabBshed that there havl' heen eight C'F.Os Their ages upon appoint
ment are as follows: 53, 60, 55, 52, 49, 58, 48, 61 Our moving averagt: depends on the
numher of years that we wish to use as nur period. fur example, using fow years:
The first year is:
53+60+55+52 55
55 1 52 + '19 + 58
52+'19+58+43 51.75
54
_ 515
The advantage of the simple moving average is that it is easy to caf1 ul,1te and pro
viJes .1 reasonably acc11rt1te estimate for forf'casting. Howevcr, the main drnwbac.k i!>
that it does not account for po!>sible tr<>nd.s. For e..xampk:, 111aJ1y !>ea.<;onal produLts
experienlc an inuctl.!>e in sales over the Chnstm::is reriod. Ideally, this trend nel"ds to
bf' taken into ac:count when forecasting. One way to do this is to weight your data.
A u1e1ghted moving auercige is where greater signifiLance is rla,Pci on one part or
your <lata set than the rest For example, in A volatile economic:. climatic' the pric:.c of
petrol may fluct11atf' to a large degree. Hence, you are more likely to gsve the must
recent data in your set of fuel pnces more s1gn1f1cnnce than earlier data, as they give
a hetter rcprcscntat1on of the current state of thf' market.
"1 asu i
r1
s ... ,ci.,i"n
If you have gatht>red bivariale data, then an interesting test would be to fin<l oul if your
two variables .ire associated in somf' way. For instanc:.e, you might be interested in
researching a possible association or correlation between age and salary among a group
2E
ot employees. Rcmernbt'f th.it rnrrelntion does not mean causation. Fur l!xample, it an
umhrc>li:l manufacturf'r finds that there 1s a rnrrdat1on between umhrella sales and
::innual rainfall, this does not ncu:ssarily mean t.h::it incrca.se<l rainfall causes an increase
in umbrella sales. Othc1 variables ,Ut: likely to impaet on sah:s These might include:
p1ic.ing, d1t st,1lt uf the economy, or possibly comp<>tition 111 the ma, ket
Corr0 1"'1n coefflc1ert
A correlation rol"ffiuL,nl 1s use<l for b1vartate analysis. ft measures thf' extent lo
whiLh two vanables art linearly related. Measurement is represented between
and 1 A value of 1 rep1est>nt,; a pe1 felt positivt: correlation; n pC'rfect negative lint>ar
relattnil',hlp 1s 1eprest>nted hy a valut' I, and a Lorrt>lation oeltinen1 uf O mean!\
that there 1s no relationship lwtWt't'n the two variables. In other wor<ls, both vanables
are perfPctly independent.
ln reality, it is unlikely that you \Aili produce Hnclings that arc pcrflclly corr'latf'd
or perrcctly indcpl!ndcnt. 'Iypically, values usually fall somewhe1 c betwcc.J1 1 and O.
A straightforward way to find out if there is a correlation between t,.vo variables 1s
tn plot th<: data A:, we have <:een earlier in this chapter, a scotter plot is a simple way
of doing this as it cle;irly illulrales the rnrrelation bt:tween two vanahles. Howeve1 1 it
does not measur' thf' strength of the rt!lationsh1p betwt:cri lwu vanahllc's. In e,<;sence,
thl!re are two tyres of Lurrclatiou c:.oeffk1ent Penrson's pruduct 11wmt'11t mrrdnrim1
weffd
i ent and Specmnan's rank currel,tiun aiefficirmt. These are cxarnine<l beluw.
., cnri' c;
Pearson' prvd11ct moment correlmio11 (r) ts a pararnelrk tf'chnlqi1e lh..:tt measures the
strength of association between two , ariables or bivarinte datn for example, you
may ish to examine a possible relationship between advertising spend nnd number
of salt's, or agt> and height amung teenagers. The data useJ must be of an interv::il 01
ratiu type and be normally distnbutcJ.
If your answer produces a strong relationsh1r between your x an<l y variables,
this docs not mean that:). rnuse.s y. We can go on to test this possibility by carrying
out 1egression trnalys,s.
Pearson',; product moment correlation coefficient .is represented hy tht> formuh.t:
:Exy
n
r  .======:===
lxy
whPrf'.
11 = the number of data pairs
y  Llw dPpendf'nt variable
x = the independent vaiiahle
 square root
= the :.um of
532 499
l180 1611(1.678 1,541]
33
SpPrrr:1r
rL
6l:d'
n (rt1)
r,=1 
33
Sl.020
=0.65
The 11exl step is to intf'rpret our result. This can be made hy checking the v.ilues of
the correlation coefficient (r):
where:
d = the difference between t.he two ranking!> of one item of data
11  the number of ilc:rn uf Jata
= lhe sum of
"f.rl'::. 0 + 9 + 1 + 0 + 0 I 1 + 0 + 1 + 1 + 9 = 22
r, = 1
Day
Number of
breal(downs (x)
xy
10
20
2
4
4
5
6
7
8
9
10
11
12
Total
3
4
5
6
3
5
2
44
lR
9
16
12
14
12
6
10
13
136
72
27
64
60
84
24
48
12
40
65
16
532
6(22)
10(100 1)
132
=1
ln our ;ihove example, the rf':mlt (0.65) is significant at the S 1X1 level. T his means
that thPrf' is a medium positive corrtlation between the number of hrcakdowns and
the time taken lo repair each breakdown.
TABLF 9 19
Spt<llrman 's m11ll correhllicm caefftcie111 (r$) is usc.:J to tes1 the strength and direr
Liou of assoc10tion betwcc.:n two ur<linal variables. ft is a test of assoc1::1tion th :it is
used for oonp:m1mf'trlc data and can be usf'd tu ai<l either the proving or dis
proving of a hypothf'sis, f'.g. thf' profir of a company i.ncreasf's fls the size of the
company increases (see Table g,20). The formula give11 to Spearman's rank cor
relation c:nefficient 1S as rolJows;
 J(1Y)(13 I)
,r
)C2
4
16
9
16
25
36
g
16
4
16
25
4
180
y2
990
r. = 0.87
As noted earlier, Lhc.: clrn;er the r, v:ilue is to + 1 or 1, the stronger the l.ilely correlation. You shoul<l now be aware that our value for the above example of 0.87 for
r me.ans that there: is a slrong positive relationshjp_
TABLE 9.20
100
324
81
256
144
196
64
144
Number of
employees
Rank of
employees
20
l.
80
10
8
ii
1
2
5
9
Company
36
6
7
169
120
200
150
100
35
90
10
125
100
64
1,678
Ra 1e I tldl
4
5
89
fi
Profit()
5.000
120.000
180,000
375,000
278.000
150,000
40.000
60,0UO
50,000
98,000
Rani( profit
Difference between
ranks {ct)
10
5
3
1
2
4
9
7
8
0
3
1
0
l
cP
D
9
1
0
0
1
1
9
.63
TABLE 9 22
where
0 = observed frequencies
E = cxpectcJ frequendt>s
The test only aplks lo calegoncnl data that ::ire ,ount,; or fr<"(]llencies, llol per
centages. The sl111plest exomplc of prei,cnting the ass<>cialion betwt>en observations
and categories is to ust> n 2 x 2 contingency table.
for example, five i..:tlmpanieci (A, 13, C, D, E) were 4ucslio11ctl on emrloyee skk
leave over a 12monlh period (see Table 9.21). We now aim to establish if some
LOmpanies have more sic.:kness in the workplace than others. We can set out our
hypotheses as follows:
f10. Eurh cnmpal!y xpects the same number aJ emplayees rm sick l1n11f'.
111; Ec1d1 rnmpnny does not liavt the same 11umber uf employl'I!,\ 1111 sick len11e.
The level of c;ignifkanu: ltl be w;ed in this ,ase is c;%.
The next step in our analysis invnlves compiling a dusquared table (see Table ().22).
Thcrc arc a total or 90 pl:'ople who have taken sick leave. lf each company expects
the same number, th\:'. expected number (E) of those who h,we taken sick leave is:
gQ = 18
15
The taklllation from '!'able 9.22 shows that the value of xi 1s 6.131.
TABLE 9.Zl
rr. Lo e
Company
')')
13
24
12
19
26
Company
I h1
llld
I tat

Observed (0)
Expected (E)
22
13
18
18
},1
18
1)
11l
c
rota I
19
Ill
90
90
'1
5
6
(0 E)Z
(0 E)Z
25
0.888
1.388
36
16
36
1
0.055
6.331
Our ac.:tuul value of 6.331 1s less than the (nt11..al value of 9.49. Theretore we
cannot reject the null hypothcsis. In other words, eaLh comp:my can t>xpect the
same number of employees to go on sick lf'ave. Any Jicrepancy in numbers is
purely hy chante
Student's ttec.t
Tlw Swde'llt' rtesr 1s a parametric te1..hnique used to test the d1fferenc.:e between
sample means. 'fhe samples must be gathered from two diffe, ent populations. In
short, the Stutlc>nt's tlest c>stahlishes the probability that two pnpul:Hions a.re the
same in relation to the variabli! that is being tested. In order to (arry out u \test,
your data must be normally distributed, of tnterva1 or rnllo status, and the two data
sets must have similar variances. ln addit1cm, or 3 po ired ttest (see below) each data
pn1r must be 1dated
T tlc;tc; infer the likelihond of three 01 more distinrt groups being different. An
inJepl:'nJent ttest is u.,e<l to test the dtfferenu! between two mdependent groups,
e.g. mall! and female. Let us say that you gathered data on IQ levels among male
do1..to1s Jncl lawyers, and compared the s:imple means using the t test. I\ probability
of 0.3 mean'> lhat there is a 30% chance that you cannot dislinguish hetwe<"n your
grnup nt doctors and lawyers based on IQ alone.
A pairE'd sample ttt>st is used to establish whelher or not there exists a !>igmfi
cant d1ffert>n,e hetween the mean valut'.s of matcht>d snmples ll is urten used to
measun: a case before anc.l after some form or man.ipulaLion or,hanges have taken
place. For example, yuu might u!>e a paind ttest to e!itublish lht> signifkance of a
difference n\ exam performance prior to and after a professional training pro
grnmn1e. A paired ttest can also be used lo comr,are samples. ror instance, our
exam example may involve comparing the effectiveness of the training programmt>
in imrnwing ex:im <;cores hy sampling employees from different LOmpanies, anJ
i.:omparing the scores of t.hnse respondents who have taken part and those who
have not taken part in the lratrung.
ANALVZING QUANTITATIVE DATA
:;_55
Acr
hn
,4,.
'lyrically, th1:: ftnal p.irt of stat1st1n1l nnalysis oen involve,; assessing the ,LrengLh of
the rdat10nsh1p hetween vanahles.
p 
r, n "1r;;i
Although a JetaileJ analysis anJ application oi rewessiun analysis 1s beyond the remit
nf rhis houk., t.lus <;ectlon p1 nvidcc; a brief inc;1ght into huw it might bt> applied tn your
research Regression rmn(yst is ;1 stntistical technique fur im f'stigaling tlw strength of
t1 relationship between vanables. Typically, the researcher aims to e!'ltahlish the LJusal
cffect of ont> variable on another. For example, thf" effect of a discount m price on
consumer demanJ, or company size on performanct'. Essentially, there are two main
types of rt>grei,i,ion an.ilys1s  s1111ple regression anJ m11ltiple regression.
Simpk regression determines the strength of n.::hnionship betwf"en a depentlent
variable and one 111dependent variable. It aims to flnd the extent that a JepenJent
(yJ and independent variable (x) arc linearly related. A regression c4u.nion is oh:en
represented on a scatter plot hy a regression line. A regression line is usc<l lo dearly
illw,trate the relationship between the variablt>s under invDLigalion. For example, in
linear rc;>grcssion you n11ght want to investigate t.he rdanonship between profo ::ind
advertising spend First, let us lnok at the formula tor linear regrf"ssion, and then
how this relates to Ollr profit and a<lvcrtising spend examrle. The formula is:
y =a+ bx
where:
Tt the above quation wai, implementf"d, the reg1esi,iun rneffic1ent 1ndiLates bow
gootl a predktor it is likely to he. Rememhf"r th::it the value proJm:eJ is hetween  I
:mt! + 1. A figme ot + 1 i ndicates that your f"quation is a perfect predictor. Con
ve1 sdy, a value of O shows thrit the equation preJ1cts none of the variation.
,ndPpendf"nt variable
Hn Do I Kn
I Tpc:,:tc:,: 0
U e?
[Jrown and Saw1Jers (2008: 103 I 0'1) m:ike the following suggt'stionc; beforf"
choosing a partk11lnr test:
What is the research question I am trying to answer?
What are the characteristics of the sample? For instance, are you using judgement sampling,
snowball sampling, etc.?
What types of data do I have?
How many data variables are there?
How many groups are there?
Are the data distributed normally?
If the data are not distributed normally, will this affect the statistic I want to use?
Are the samples Independent?
Ln atltlitiun, if you wish to make infernLes about a population.
Are the data representative of the population?
Are the groups different?
Is there a relationship between the variables?
y = dependent variable
Let us say that our example of UH: relationship hetween prol1l anJ ac.lvert1sing
spend was lo take into account othe1 factors. for 1rn,tance, profit might also be
affectctl by staff Lraining expenditure, prire, bonuses anJ Lompetition T his would
he rep1csented in the following multiple regrsiun formula.
Profit  a + (b1 x staff training expenditure) + (b1 x price) + {b3 x bonuses)
+ (b4 x number of competitors)
26b ESSENTIALS OF BUSINESS RESEARCH
ges
Lf yuur rest>arch involves quantitative data analysis, it is unlikely that you will clo the
work manually. Most rnmputers have acces!> to some kind of spreadsheet pack.ige,
such as Micrm,ofl E'fcel. These certainly allow you lo carry out elementary statisti
cal analysis. Y<:l, they Jo not have the range of options tyrically associatctl with
statistical packages. Fortunately, thf"re are now several excellent software packages
on the market. Many of these are user friendly and ,deal for the stuJent researchcr.
Twu of tht> leaclrng packages usl'J in UK institutions arc SPSS anJ Minitab. Thii,
bouk ii, not i ntendecl to provide :.1 LOmprehensivf" guide on how to use either of
these packages. The important thing is Lliat you recognize the advantages of using
such a packagl' as opposed to undertaking manual quant1tat1vt> data analysis. Tht>
advantages of using a software package are.
it saves time:
you avoid the need to learn how to perform calculations:
it provides greater scope for your analysis; and
data can be easily recorded, interpreted and presented.
ANALVZING QUANTITATIVE DATA l67
Tha11kfully, tl,is means tl,at you dn not need to worry about remembe1 ing diffcrent
formulas! I lowevcr, you still need to understand the purpose of statistical tests and
the c:ircumtances in. which they Lan be used.
TABLE 9.23
Case number
Age
Gender
Nationality
001
42
l
2
2
1
1
2
4
3
5
1
2
300
002
004
005
74
19
34
28
007
26
00)
006
008
009
010
S1
44
60
29
1
2
1
2
280
318
500
348
48'1
350
)88
525
650
spaces and can be up to eight characters. The second variable relates to the first question in
our questionnaire (Age). A simple way to refer to this is 01. so type this in the box under
CASE. Type 02 to represent gender under 01, and so on. Do the same for Nationality and
Weekly household spending, QJ and Q4 respectively.
Type: The two basic types of variable that you will use are numeric and string. A numeric
variable can only have numbers allocated. String variables may contain letters or numbers. II
a string variable contains only numbers, numeric operations on that variable will not be
allowed. To change a variable type, click on the small grey box on the righthand side of the
window. This brings up the Variable 'Type menu. If you select a numeric variable, you can then
click in the width box or the decimal box to change the default values of eight characters
reserved to displaying numbers with two decimal places. For whole numbers, you can drop
the decimals down to zero. If you select a string variable, vou can indicate the number of
characters to be allowed for data entry in this string variable. For gender and nationality.
select string as these are nominal data.
Width: The width of the variable is simply the number of characters SPSS will allow to be
entered ror lhe variable. SPSS selects eight by derault.
Decimals: This is the number of decimal places SPSS will display. For whole numbers, set
the number of decimals to zero. By default, SPSS inserts two decimals for each numerical
value.
Label: The label helps you to recognize the variable. For example, 01 asks about your age:
you could give a label of 'Age', while for Q2 'Gender', Q3 'Nationality' amt Q4 'Spend'. You
could also use a key word for longer questions. For instance, a question on your favourite
holiday destination could be called 'Holiday'.
Values: Under values enter the codes and what they represent. For Q2. click to the right or
the cell under Values and a window will appear called Value labels. In the Value Box enter
'1' and in the Label Box enter 'Male' and click Add. Next, enter 2 in the Value Box and
'Female' in the Label Bo)( and click Add, followed by OK. Adopt this process when coding for
nationalities, entering 1 to 5 for each option.
Missing data: Sometimes respondents may miss out a question because they choose
to do so or it ls not applicable. It it is not applicable. tnen you should include this as an
option in your questionnaire. Any nonresponses must be coded. SPSS provides a
defaults measure for missing data or nonresponse. You can choose your own number,
but make sure that the same number is used for all nonresponses. Choose a number
unlikely to be used and easily recognizable, e.g. 9999. In this example there are no miss
ing data.
Columns: This refers to how many columns wide you would like the variable to be presented
in the Data View. We will leave il at the default.
Align: Here you can change the pre.sentation so that scores for the variable are left justified.
right justified or centred. We will leave it at the default.
Measure: Here, SPSS gives you a choice or Scale (this represents both ratio and
interval scale), Ordinal or Nominal. We looked at these different types of variable ear
lier in the chapter. For Ql (Age) and Q4 (Spend), select Scale by clicking to the right of
each respective box under Measure, While 02 (gender) and Q3 (nationality) should be
Nominal.
Role: This is a feature of newer versions of SPSS. The column here is concerned with the role
your variable is going to take in the analysis. For the procedures we are going to carry out it
can be left as the default role of Input.
ANALYZING QUANTITATIVE DATA 269
Prnrt11rinp

"'.E!..
,. v.. ..::.. 
Descriptj
p tt c:tjrc l fci'l
<:.DCC
SPSS allowi, you t o n1lrnlate ::i wide range of df's,riptive i,tat.istics 'illch as the mode,
nwdlan a11d 11\l'tln. In the Data Vit'W o;cree11 select Analyze > De.srriptive Siotistics
> Descriptives Ncxl, thl' Dei,criptives dialogue box will arpcar. We: are intereslcJ
ir1 analyzing housebolJ spCJ1J, so did nn Spend [Q41, then the: middle :mow
Spend [Q41 should move to the Variahlr.(s): box. Next, l Jick on Options. The
Descriptive: Options box will appear. Select Mean, Suru, StJ.dt,viation, Range and,
11nder Di!.play ort.ler, Variahle I ist. CliLk Continue, followeJ by OK.
SPSS no\\ proJuc:es an output showrng our selected descript1vf' statistics for
household spendlllg (Figure 9.1] ).
AGURE 9.9
F tirina
Once you have named and defh1eJ the properties of your variahles, you nre rcaJy to
begin entering your data. First, return to Data V1ew and enter the data vnl11es fo1 your
1cspondents as surnmari:wJ in Tahle 9.23. If you place your cursor over the nan1e of a
variable, SPSS will show t.he lahel ym1 added in V11riablc View (Figure 9.9). To enter
new data, click in an empty cell in the first row. Use the arrow keys to enter the values.
II
FIGURE 910
,.
"
..
"..
..
"
...,,......
......"'"...
......
...'""
Oat V1 w
n:::or.
r.....
FIGURE 9.11
sc 1pt1ve
ANALVZING QUANTITATIVE DATA
.171
Click Continue. Selert Uisplay Frequency table and click OK. SPSS now prndui..es
a ba, drnrt for nationality ,;howing fn:qucnLy rnw1ts (!,e Figurl" C), 12), along with
a frequency' table (sl:t' figurt> 9.13). Clearly, our sample n = lO is very small. A much
larger sample showing stuJent 11::it1onrility will make for m1.1ch more interesting
reading.
When you arc reaJy to save or open your wurk, t..he steps are as follow
Saving your work File > SRV(' As :> fatter :1 filL:name in the filename box, e.g.
'household' > click Save.
Opening your work: File> Open > Dala > dick 011 'houschulJ' > Open,
Firn11ly, this SP,tion has provided a snapshot of how SPSS works. You will And
more information on the accompanying website, ln aJJition, rccornrnended sources
are listed at tl,e PnJ oF t..hc thapler.
The authors set out the aim of the paper as exploring 'the planning strategies or female entre
preneurs who have indicated a desire to grow their busine5ses. the time horizons of planning
strategies, and the relationship between planning horizons and number of employees and annual
sales as measures of business performance.
The paper begins by provlC!lng an introduction 10 the study and identifying a gap in ttte literature;
namely, although there Is a growing interest in female entrepreneurship. there is a lack of research
into the influence of gender, especiaUy In terms of growth and longterm business performance
Following this, the authors review the key literature in Lhe context or business performance
and growth and business planning, and 1n female entrepreneurship. As well as having a set of
ob1ectives within the introduction, the authors also include two hypotheses that emerge from the
literature review. These are as follows:
FIGURE 9.12
=..J
Nwd1mmlly
FIGURE 9.13
2
rt!
Hl. There is a positive correlation between number of employees and the time horizons for
business planning.
H2. There is a positive correlation between business turnover and the time horizons for busi
ness planning
For the methodology, the authors adopted a questionnairebased survey 1n order to collect
data about lemale entrepreneurs and their businesses. A convenience sampling method was used
when distributing the questionnaire. The researchers' rationale ror using this sampling technique
was the difficulty of identifying businesses that were owned by women.
Questionnaires were administered via email and sent as an attachment. A total of 210 question
naires were collected. The authors state that only questionnaires where respondents wish to grow their
business. and had completed all of the relevant questions on the profile of their business, were used
for analysis. Subsequently, data were entered into SPSS for descriptive analysis and hypothesis testing.
The descriptive analysis begins by analyzing the respondents' profiles. This includes their
age, education, years of business experience, sector and age of business. Second, a table is
provided that Illustrates the percentage of respondents who indicated that they used a
specific strategy lo promote the growth of their business. or the various strategies listed,
the most popular choice in terms of relevance to business growth strategy was 'Improving
existing products or services at 42%. Another table is used to h1ghl1ght how far ahead
respondents had planned for a range of activities. Including: sales. cash flow, new products,
entry into new markets. recruitment or human resources. expenditures and investment in
infrastructure.
ANALYZING QUANTITATIVE DATA
' 7J
Answer: VoUI c.ho1c:e nf methulls rJeeni:Js on a r1urnher of far.tors. These inr:lut1e the numhP.r
ol va11ables, tyrie of data, sampling method and whether you have a normal d1stributinn
Using descriptive stiltist1c.s 1s relatively stri!lghlforwartJ, whrreas more acJvaricetJ analysis
rnn uc 11ndertilken us1r1g a !>tat1st1cal :.ollware package such as SPSS. Thi, avoids having to
manually pe1 form calculallons However, yn11 still need to be a hie to unrlcrstand the
cond,t1ons under which ,1 test can be earned out. under..,t nd It., purpose ,1ntJ be able lo
interpret your f111ding!>
2. Shall I analyze my data manually or use a sortware package?
Answer: If you are using descriptiVl! statistics. then there 1s no reason why you cannot
undertake ma11ual analysis Still. w1te11 r,resenting your results, thr.re is no substitute for the
likes of SPSS. A spedal11.ecl package contains several options lor present111g VOUI data.
Moreover, il can help tu reduce the mnount of tirne devoted lo this stage of your p1oject.
3. How should I structure my quantitative analysis within the body of my research project?
Answer: Your dem1on here depends on the extent of your analysis. Broadly speaking, start
with descriptive, followed by inferential, statistics. If you have ;:ictnpted a mrxed methods
approach to yo11r research. then your decision to sta1 l with qualitative or quantitative analysis
1s ijcnerally up to you. fhis might I.Je influenced by previous research on your chosen topic. or
possil.Jly advice from your research supervisor. Whatever you decide, the key thing to remember
Is that ynur analysis must he presentP.d in a rlear. thcmatir. way
References
Brown, R.B. am! Saunc.le.rs, M. (2008_) Dealing willt St.atistics: What Yuu Need Tv
K11ow. Maidenhead. McGrawHill/Open University Press.
Bryman, A. (2004) Social Research Merlwds (2nd edn). Q,..fnr<l: Oxford University
Press.
Mltchelmore, S. and Rowley, J. (2013) 'Growth and planning stnnegks witltin
won1cnled SMEs', Management Decision, 51 (I): 8396.
Woters, D. (J 997) Quantitative Methods for Business ( 4th edn) l larlow: 17f/
Prentice Hall.
Further Re ding
Barrow, M. (2UOS) Statistics for Hco11omics1 AccountinK and Bitsiness Studies.
f f;irlow: FT/Prenticf' I !All.
276 ESSENTIALS OF BUSINESS RESEARCH
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