Research Methods In Business

Chapter – Two

Defining Research Problem & Hypothesis

Formulation
 Previously
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Chapter One:
Research Methods: An Introduction
1.1. Definition and basic concepts

1.2. Characteristics of research

1.3. The motives of doing research

1.4. Types of research

1.5. The scientific method

1.6. Research process

Chapter 2’s Agenda
Chapter Two:
Defining Research Problem and Hypothesis
2.1. What is a research problem?

2.2. Components of research problem

2.3. Problem formulation and research question

2.4. What is hypothesis?

2.5. Hypothesis formation

2.6. Criteria for hypothesis formulation

 After studying this chapter you should be able to:
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1. Describe the importance of research problem definition.

2. Appreciate the steps to Problem Definition

3. Distinguish the different Variables

4. Realize a research objective formulation

5. Formulate basic research questions and objective

6. Formulate a research hypotheses

 2.1 Definition of research problem (RP)
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 A RP refers to some difficulty which a researcher

experiences in the theoretical or practical situation and wants
to obtain a solution for it.
 A problem definition indicates a specific decision area to be
clarified or problem to be solved
 It specifies the research questions to be answered and the
objective of the research to be achieved.
 Understanding the true nature of the problem is foundational
to future planning.
 CONT...)
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1. “A problem well defined is half

solved” John Dewey

2. “If I had only one hour to save

the world, I’d spend 55 min.
defining the problem and 5
minutes finding a solution.”

3. “The formulation of the

problem is often more essential
than its solution.” (Albert
Einstein)
 CONT...)
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 Defining problem results in clear cut research objectives

 Thus, defining a research problem properly is a prerequisite
 A well defined research problem enable to organized opt for:

 What data are to be collected? Nature of data

 where to be collected? Sources of data

 How to collected data? Instruments

 How to analyze the data? Software package, statistics

 2.2. The Process of Problem Definition
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The Process of Problem Definition includes:

Step 1 : Understand the Background of the Problem

Step 2: Isolate and Identify the Problems, Not the Symptoms

Step 3: Determine the Relevant Variable

Step 4: State research questions/Hypothesis & objectives

Step 5: Determine the Unit of Analysis

 Step 1 : Understand the Background of the Problem
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It includes a Situation analysis :

 Preliminary informal gathering of background information to
familiarize researchers with the decision area

 HOW ?

 Doing environmental scanning/observation

 Discussing with those who have a good knowledge of the

problem concerned

 Surveying those who are in the demanded situation.

 Step 2: Isolate and Identify the Problems, Not the Symptoms
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Example :
 Case : Brewery company
 Issue : Consumers prefer taste of competitor’s product

 Problem definition:
Taste of brewery product needs to be reformulated

 True problem :
old fashioned package is influencing taste perception.
 Step 3: Determine the Relevant Variable
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A Variables:
 Is anything that varies or changes in value

 It assumes different numerical values usually in

magnitude or strength, or in direction.
 It can be:

1. Continuous/ quantitative
2. Categorical/qualitative
3. Dependent
4. Independent
5. Moderating
6. Intervening
 Types of variable
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1. Quantitative variables:
 involves measurable numerical or statistical data
 Can be Discrete or Continuous
 Discrete variables :
 Expressed in integer values, they are non-continuous
variables and usually it is a result of counting.
 Example: Age, family size e.t.c
 Continuous variables:
 assumes any range of values and usually result from
measurement.
 Eg. Sales volume, profits etc.
 Types of variable
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2. Qualitative/ Categorical Variables:

 Is one that indicates membership in some group
Examples: Attitude, Behavior, Feeling, and Satisfaction, ETC
 It can be quantified: HOW?
 Presence or absence of the concerning attribute(s) or
 By level of the attributes.
Example 1: available = 1 and not available = 0
Example 2: level of satisfaction
Example 3: Gender
1. Female = 1
2. Male = 0
 Types of variable
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3. Dependant variable :
 Is the primary interest to the researcher.

 The researcher’s goal is to understand and describe the

dependant variable, or to explain its variability or to predict it.

GRQ: What is the effect of service level on sales volume ?
 Dependant variable = sales volume

Service level Sales Volume

 Types of variable
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4. Independent Variable:
 An independent variable is one that influences the
dependant variable in either a positive or negative way.
 when the independent variable changes, the dependent

variable is also changes.

 Also known as the predictor variable

 Example: service level

Service level Sales volume

 Dependent and independent variable relationships
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• Positive relationship:
– Two variables move in the same direction
• E.g.: Temperature and Ice cream consumption

Level of Temperature Ice cream consumption

• Negative relationship:
– Two variables move in opposite direction
• Temperature and Hot chocolate consumption
Level of Temperature Hot chocolate consumption
 Types of variable
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5. Moderating Variable:
 The moderating variable is the one that has a strong

contingent effect on the independent-dependent

relationship.

 The presence of a third variable (the moderating

variable) modifies the original relationship between
the independent variable and the dependent variable.
6. Intervaning variable
For example:
Independent Vs Dependent Variable
GRQ: What is the effect of service quality on sales?

Service quality Sales volume

For example:
independent Vs intervening Vs Dependant variable
GRQ: What is the effect of service level on sales?
 SRQ1: What is the effect of service level on customer satisfaction?
 SRQ2: What is the effect of customer satisfaction on sales?

Customer
Service level
satisfaction Sales volume
Next week …………………..>>>>>>>>>>>>

Step 5: State the research questions ( Hypothesis) and research objective

 2.3. Problem formulation and research question
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I. Research questions and research questions formation

 A research question is the researcher’s translation of the
business problem into a specific need for inquiry.
 Research questions assume two forms:
1. A central question / general research question
 Consists of several specific research questions

2. Associated sub questions (specific research questions)

 Are segments/parts of the GRQ
 Answers to all SRQ’s make up answer to GRQ
 2.3. Problem formulation and research question
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 A researcher asks one or two central questions

followed by no more than five to seven sub
questions.

 Lets see some examples how to formulate a general

and specific research question
 General and Specific research questions formtion:
Example 1
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Title
Factors affecting the quality of tomato during transportation, A case
of tomato value chain in Zeway area.

 GRQ: Which factors influence the quality of tomato’s during transport?

 SRQ1: How does the temperature during transport influence the quality of
the tomatoes?

 SRQ2: How do the atmospheric conditions during transport influence the

quality of the tomatoes?

 SRQ3: How do mechanical conditions during transport influence the

quality of the tomatoes?
 General and Specific research questions formtion
Example 2
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Title:
The effect of customer service quality on the sales volume,
a case of XYZ company

GRQ: What is the effect of customer service quality on sales Volume?

 SRQ1: What is the effect of service level on customer satisfaction?
 SRQ2: What is the effect of customer satisfaction on sales
Volume?

 AND BTW: did you see the concept of intervening variable here ?
 General and Specific research questions formtion:
Example 3
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Title:

The effect population density on overweight problems among

children in Addis.

GRO: What is the effect population density on overweight problems among

children in Addis?
SRQs:
 SRQ1: What is the effect of population density on the time spent playing
outdoors?
 SRQ2: What is the effect of time spent playing outdoors on overweight problems
among children?

Kindly!, Tell me which one is dependant, independent and intervening

variable in the above example?
 II. Research objectives
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 The research objective describes your motivation to do the

research

 what do you hope to achieve with your research?

 Often stated in two forms

 Broad (general) and
 Specific research objectives.
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 Objective in a practice oriented research project:

To help solve a practical problem
 Help to improve the economic position of small coffee farmers in
Mana
 Help to increase the return rate of empty batteries
 Help to increase the profits of a supermarket

 Objective in a theory oriented research project:

Theoretical expansion (solve a knowledge problem)
 Finding out the effects of political system on economic welfare
 Investigate if there is a relation between education and income
 Assess if the Ethiopian population has increased over the last decade
 General and Specific research OBJECTIVE formtion:
Example 1
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Title
Factors affecting the quality of tomato during transportation, A case
of tomato value chain in Zeway area.

 GRO: The main objective of this research is to identify major factors that
influence the quality of tomato’s during transport.
 SRO1: To investigate if temperature during transport influence the quality
of the tomatoes?

 SRO2: To investigate weather atmospheric conditions during transport

influence the quality of the tomatoes?

 SRO3: To see if mechanical conditions during transport influence the

quality of the tomatoes?
 General and Specific research OBJECTIVE formtion
Example 2
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Title:
The effect of customer service quality on the sales volume,
a case of XYZ company
Change it!
GRQ: What is the effect of customer service quality on sales Volume?
 SRQ1: What is the effect of service level on customer satisfaction?
 SRQ2: What is the effect of customer satisfaction on sales
Volume?
 General and Specific research OBJECTIVE formtion
Example 3
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Title:

The effect population density on overweight problems among

children in Addis.
Change it!

GRO: What is the effect population density on overweight problems among

children in Addis?
SRQs:
 SRQ1: What is the effect of population density on the time spent playing
outdoors?
 SRQ2: What is the effect of time spent playing outdoors on overweight problems
among children?
 2.4. What is hypothesis?
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III. Research Hypothesis

 Hypothesis is an unproven proposition or possible

solution to a problem which can or may not be real

solutions
 Based on the theoretical facts and litretures reviewed

 Declarative statements that can be empirically tested.

 They provide the guidelines for the type of data and

techniques necessary for analysis.
 1.5. Hypothesis formation
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a. If---then

b. Directional and non-directional Hypotheses

c. C. Null and alternative hypothesis

 1.5. Hypothesis formation (Cont…)
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a. If---then hypothesis
Meaning and nature
Examples
1. Employees health and sick leave frequency
H1: If employees are healthier, then they will take sick leave less frequently.

2. Worker’s attitudes (+) and organizational commitment

H1: If worker’s attitudes towards an organization climate are changed in positive
direction, then there will be an increase in organizational commitment
 1.5. Hypothesis formation (Cont…)
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b. Directional and non-directional Hypotheses

Directional
• If, in stating the relationship between variables or comparing two
groups, terms such as positive, negative, more than, less than and the
like are used, then these hypotheses are directional because the
direction of the relationship between the variables is indicated.
Example :
 There is a positive and significant relationship between customers
service quality and satisfaction.
 There is a negative and significant relationship between
employees health and sick leave request frequently.
 There is a positive and significant relationship between age and job
satisfaction
 1.5. Hypothesis formation (Cont…)
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Non- Directional:
 Are those that do postulate a relationship or difference,
but offer no indication of the direction of these
relationship or differences.

Example
1. There is a relationship between customers service quality and
satisfaction.
2. There is a relationship between age and job satisfaction
3. There is a difference between the work ethnic values of American
and Asian employees
 1.5. Hypothesis formation (Cont…)
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C. Null and alternative hypothesis

Null hypothesis
 It states that the population correlation between two variables is equal
to zero or that the difference in the mean of two groups in the
population is equal to zero (or some definite number).

 It expresses as no (significant) relationship between two variables or no

(significant) difference between two groups.
 1.5. Hypothesis formation (Cont…)
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C. Null and alternative hypothesis

Alternate Hypothesis
 It is, the opposite of null, a statement expressing a
relationship between two variables or indicating difference
between two groups.

 By contrast, the alternate hypothesis predicts that there will

be a difference between the groups.
 1.6. Characteristics of a Good Hypothesis
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 Clear And Precise.

 Capable Of Being Tested

 State Relationship Between Variables

 Be Limited In Scope And Must Be Specific.

 Stated As Far As Possible In Most Simple Terms

 Consistent With Most Known Facts,

 Hypothesis Should Be Open To Testing Within A Reasonable Time.

 step 5: Determine the unit of analysis
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 Unit of analysis indicates what or who should provide the data and at
what level of aggregation.
 The investigation may focus on the collection of data about
organizations, departments, work groups, individuals or objects
 Individuals, households, organizations, etc.
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