BUSINESS Research Methods

Course Objective
• It is aimed to understand the
principles of scientific research
methods and their application in real
world business environment.
• Moreover, students will be enriched with the
techniques and skills of developing a standard
research proposal.
 Course Description:

• The course is designed to provide students with

advanced level training in research méthods and enables
students to undertake research in various areas of
accounting and finance.
• It is also designed to provide an intensive introductory
course to research, research design, proposal and
scientific paper writing and presentation across a
range of accounting, finance and investment areas.
• It provides an opportunity to develop insights in to
research process and research methodology in
accounting and finance. The course also familiarizes
students with statistical analysis softwares like SPSS
and other statisitcal routines.
 Course syllabus
Unit 1 - Introduction to Research
1.1 Concept and definition of research
1.2 Characteristics of Research
1.3 Nature and scope of Business research
1.4 Purposes of Research
1.5 Types of Research
1.6 Research process
1.7.Ethical issues in Accounting and Finance Research

Unit- 2 - Research problem, Design and sampling

2.1 Nature of research problem

2.2 Operationalization of research problem
2.3 Problem selection and evaluation
2.4 What is Research design?
2.5 Types of Research designs
2.6 Formulating research design
2. 7 Formulating Research Hypothesis
2. 8 Sampling Terminology
2.9 Probability and non probability Sampling Designs
 Course syllabus………
Unit 3 – The Research Proposal
3.1 Introduction
3.2 Types of Research Proposal
3.3 Sections of a Research Proposal
3.4 Sources of Research Funding
3.5 Evaluating the Research Proposal
Unit- 4 - Review of literature
4.1 Significance of literature review
4.2 Sources of literature
4.3 Planning and conducting literature search
4.4 Recording the literature
4.5 Evaluating the literature
 Course syllabus………
Unit- 5 – Methods of Data Collection
5.1 Introduction
5.2 Sources of Primary Data
5.3 Overview of Primary Data Collection Techniques
5.4: Merits and Demerits of primary sources of data
5.4 Sources of Secondary Data
5.5 Overview of Secondary Data Collection Techniques
5.6 Biases in Data Collection
5.7 Testing Reliability and Validity of data

Unit- 6 – Data Analysis

6.1 Introduction
6.2 Analysing qualitative data
6.3. Analysing quantitative data
6.4 Data Analysis in Survey and case studies
6.3 Quantitative data analysis using SPSS and other soft wares
 Course syllabus………
Unit-7 – Scientific Report Writing and
Presentation
7.1 Introduction
7.2 Types of Scientific Research Report
7.3 Parts of a Scientific Research Report
7.4 Referencing styles
7.5 Publication Outlets for Finance and Investment
Researches
7.6 Presenting a Scientific Research Paper
 Assessment Strategy

This course requires reading journal articles and very active class
participation. On time submission and on time presentation of each
summarized journal article is mandatory for this course. The type-
written Research Proposal has to be submitted individually.
The detailed breakdown of the assessment is as follows.

Article review, summary and Presentation 15%

Research Proposal 20%
SPSS application 10%
Tests and Quiz 10%
Summative Exam 40%
Class attendance and activity 5%
Total 100%
Chapter 1 - Introduction to Research

 Introduction
 Concept and definition of research
 Nature and scope of business research
 Purposes of Research
 Significance of Research
 Types of Research and research process
 Research strategies
 Negotiating access and research ethics
 Chapter 1: Introduction
 OBJECTIVES

After going through this chapter you will be able to:

(I) describe meaning and objectives of research.
(ii) differentiate between different types of research.
(iii) describe scope and significance of research in
Accounting and finance
(iV) identify the basic steps in research process

1.1: Concept and Definitions of Research

• The word research is composed of two syllabuses, re and search. The dictionary defines the former as a prefix meaning again, and the latter as a verb meaning to examine closely and carefully, to test and try or to probe. Together they form a noun describing a careful, systematic, patient study and investigation in some field of
knowledge, undertaken to establish facts or principles
 Introduction
In the professions of Accounting and Finance,
research is becoming such a demanding task.
Accounting and Finance researches are
published in the reputed Journals such as:
Journal of Finance, Journal of Accounting and
Finance, Journal of Financial Research, Journal
of Accounting Research, International Journal
of Auditing and so on……
 1.1: Concept and definition of
Research
• The word research is composed of two words-
re and search. The dictionary defines the
former as a prefix meaning again, or over
again and the latter as a verb meaning to
examine closely and carefully, to test or to
probe. Together they form a noun, research,
which means a careful, systematic, patient
study and investigation in some field of
knowledge, undertaken to establish facts or
principles.
 Concept and definition……..
• Research is a systematic investigation to find answers
to a problem.
• Research is defined as a search for knowledge.
• Research is a scientific and systematic search for
pertinent information on a specific topic.
• Research is an art of investigation.
• Research comprises defining and redefining problems,
formulating hypothesis or suggested solutions;
collecting, organizing and evaluating data; making
deductions and reaching conclusions; and carefully
testing the conclusions to determine whether they fit
the formulated hypothesis.
 Concept and definition: cont……..
• Research is a systematic, controlled,
empirical and critical method consisting of
enumerating the problem, formulating a
hypothesis, collecting the facts or data,
analyzing the facts and reaching certain
conclusions either in the form of solutions
toward the concerned problem or in certain
generalizations for some theoretical
formulation.
 Characteristics of Research

• From the above definitions it is clear that

research is a process of collecting, analyzing and
interpreting information to answer questions.
But to qualify as a research, a process must have
certain characteristics as listed below:
1. Systematic
It means that research is structured with
specified steps to be taken in a specified
sequence in accordance with the well defined set
of rules.
 Characteristics of Research………

2. Rigorous (relevant)
One must be very careful (scrupulous) in
ensuring that the procedures followed to find
answers to questions are relevant,
appropriate and justified.
3. Valid and verifiable
This concept implies that whatever you
conclude on the basis of your findings is
correct and can be verified by you and others.
 Characteristics of Research………

4. Empirical
• This means that any conclusions drawn are
based upon hard evidence gathered from
information collected from real life
experiences or observations.
• It implies that research is related basically to
one or more aspects of a real situation and
deals with concrete data that provides a basis
for external validity to research results
 Characteristics of Research………

5. Critical
The methods employed and procedures used
should be critically scrutinized. The process of
investigation must be foolproof and free from
any drawbacks. The process adopted and the
procedures used must be able to withstand
critical scrutiny.
 Characteristics of Research………
6. Controlled
In exploring the causality relation b/n two variables, the
study must be set in a way that minimizes the effects of
other factors affecting relationship. In social science
research, however, since controlling is almost impossible,
the effect of the other variable must be quantified rather.
7. Replicable
This characteristic allows research results to be verified by
replicating the study and thereby building a sound basis
for decisions. This is related to verifiability and validity.
8. Logical
This implies that research is guided by the rules of logical
reasoning and the logical process of induction and
deduction.
 1.2: Nature and Scope of Business Research

Nature of Business research

• Using earlier definition of research, it would seem sensible to
define business research as part of research undertaken to
find out solutions for business problems.
• Business research deals with business phenomena such as
performance analysis, accounting practice, the price or
supply of a commodity, or sales forecasts for a particular
item, knowledge about market behavior, marketing strategies
required to achieve a goal, and so on
• Business research is to find explanation to unexplained
business phenomena, to clarify doubts and correct the
misconceived facts of business environment.
 Nature of Business Research…….

• It deals with business phenomena.

• It aims at discovering of new facts/solving
business problems
• It is a scientific undertaking
• Does not involve experimentation
• It is dynamic in nature
• It is inter-disciplinary
 Scope of Accounting and finance research
The following are researchable areas in accounting and
finance especially in Ethiopian context.
• Analysis of capital budgeting practice in Ethiopia
• Application of GAAP in Ethiopia and its harmonization with national
accounting standards.
• Availabilities, and limitation of credit facilities in Ethiopia
• Cause and consequence of tax evasion and avoidance
• Cost of capital and its determinants in Ethiopian context
• Determinants of loan repayment of small and microenterprises
• Lending strategies and effectiveness of commercial banks or MFIs.
• Prospects and challenges of establishing stock market in Ethiopia
• Cost Accounting practice in manufacturing enterprises
 Scope ---------

• Effectiveness and efficiency of internal control in public enterprise

• Existing Tax system and its limitation in Ethiopia
• Analysis of Financial performance of companies
• Analysis of FDI in Ethiopia
• Investment opportunities and challenges in Ethiopia
• Source of finance for working capital in Ethiopia
• Nature and characteristics of public finance in Ethiopia
• Venture capital financing in Ethiopia
• Project appraisal practice of commercial banks in Ethiopia
• Accounting or auditing practice in Ethiopia
• Evaluation of the application of depreciation methods in Ethiopia
 Scope ---------
• The nature and role of financial institutions in poverty reduction
• The role of financial institutions in deposit mobilization
• The need and importance of regulated financial markets in Ethiopia
• The role of accounting in the performance and development of
business.
• The role of savings across various sectors in Ethiopia.
• Practice of performance audit in Ethiopia
• Internal audit and internal control in Ethiopia
• The professional status of internal auditing in Ethiopia
• Assessment of the professional ethics of auditors/ accountants in
Ethiopia
• Credit appraisal practice of Commercial banks, MFIs in Ethiopia
• Status of internal audit in Ethiopia and e.t.c…..
 1.3: Purposes of Research

In the business arena, research is required because

of the following reasons:
• To identify and find solutions to the problems
• To help in making decisions
• To develop new concepts
• To find alternate business strategies
• To gain a competitive advantage.
• To test new products and services.
• To enhance profitability.
• To reduce operational costs.
 1.4: Significance of Research
• Research inculcates scientific and inductive thinking
and it promotes the development of logical habits of
thinking and organization.
• Research aids in solving operational problems. The very
reason for conducting researches is due to the
increasingly complex nature of business and
government. Furthermore, research is helpful aid in
economic policy.
• Research provides the basis for nearly all government
policies in our economic system.
• Research has its special significance in solving various
operational and planning problems of business and
industry.
 Significance of Research……
• Research is equally important for social scientists in studying social
relationships and in seeking answers to various social problems.
• Research may mean careerism or a way to attain a high position in
the social structure particularly for those students of Masters or
PhD.
• Research may mean a source of livelihood for those professionals in
research methodology.
• Research may mean the outlet for new ideas and insights for
philosophers and thinkers.
• Research may mean the development of new styles and creative
work to literary person.
• Research may mean the generalization of new theories to analysts
and intellectuals.
 1.5: Types of Research

Research can be classified differently based on its

application, objective and type of information
sought
1. Based on its application: Pure vs. applied
research
• Pure research: Also called fundamental or basic
research. Gathering knowledge for knowledge’s
sake is known as basic research. It is not directly
involved with practical problems. It does not
have any commercial potential. There is no
intention to apply this research in practice.
 Types of research---------
• Applied research: Also called Action research.
It aims at finding a solution for an immediate
problem faced by any business organization.
This research deals with real life situations.
Example: “Why have profitability decreased
during the last quarter”? Applied research has
a practical problem-solving emphasis.
 Types of research---------
• Based on objective: On the basis their
objectives research can be classified as
 Descriptive Research
 Exploratory Research
 Correlation Research
 Types of research---------
Descriptive Research: The main purpose of
descriptive research is to describe the state of
view as it exists at present. Simply stated, it is
a fact finding investigation. In descriptive
research, definite conclusions can be arrived
at, but it does not establish a cause and effect
relationship. This type of research tries to
describe the characteristics of the respondent
in relation to a particular product.
 Types of research---------
Descriptive Research
• More appropriate for exhaustive and detailed
investigative study of the various aspects of a
problem.
• It can be survey research or comparative research
• It is hypothesis testing research.
• May be longitudinal or cross sectional research.
• Answers questions like what, where, when, how and
who.
 Types of research---------
Exploratory research
• Is concerned with the discovery of new facts,
things or ideas.
• Leads to the clarification of certain problems
• More common in business studies
• Example: If the profitability of XYZ company
has been declining, then through a careful
investigation a researcher would state the
reasons through exploratory research.
 Types of research---------
Correlation research:
• Studies the relationship between two or more
related variables.
 Types of research---------
Based on type of data involved , research can be termed
as quantitative or qualitative research
Quantitative research:
 Is based on the measurement of quantity or amount.
 Is applicable to phenomena that can be expressed in
terms of quantity.
 Quantitative research refers to counts and measures of
things.
Qualitative research:
 concerned with qualitative phenomenon, i.e.,
phenomena relating to or involving quality or kind.
• I
 Types of research---------
Qualitative research:
 concerned with qualitative phenomenon, i.e.,
phenomena relating to or involving quality or
kind.
 Quality refers to the what, how, when, and
where of a thing- its essence and ambience.
 Qualitative research thus refers to the meanings,
concepts, definitions, characteristics, symbols,
and descriptions of things.
 Types of research------
Besides the above classification of research there are
other types of research
• Conceptual Research: This is generally used by
philosophers. It is related to some abstract idea or
theory. In this type of research, the researcher should
collect the data to prove or disapprove his hypothesis.
The various ideologies or ‘isms’ are examples of
conceptual research
• Causal Research: Causal research is conducted to
determine the cause and effect relationship between
the two variables.
Example: Effect of promotion on sales.
 Types of research------
• Historical Research: The name itself indicates the meaning of
the research. Historical study is a study of past records and
data in order to understand the future trends and
development of the organization or market. There is no direct
observation. The research has to depend on the conclusions
or inferences drawn in the past.
For example, investors in the share market study the past
records or prices of shares which he/she intends to buy.
Studying the share prices of a particular company enables the
investor to take decision whether to invest in the shares of a
company.
 Types of research------
Evaluative Research: This is an example of applied
research in business.
• This research is conducted to find out how well a
planned programme is implemented.
• Therefore, evaluation research deals with evaluating
the outcomes or the results of implementation of
certain polices, plans and programmes
• Example: The impact of BPR on the quality of
education in University of Gondar
 Types of research------

Analytical research
• Is based on the analysis of the available facts
and figures with regard to a particular
problem of research.
Clinical or diagnostic research: most common in
medical studies.
 Research process
• The research process involves the following steps.
1. Formulating research problem
2. Review of literature
 Review of concepts and theories
 Review of previous research findings
3. Formulating hypothesis
4. Developing instrument for data collection
5. Collection of data
6. Analysis of data
7. Writing research report
 Ethical issues in Accounting and
finance research
• All professions are guided by a code of ethics that
has evolved over the years to accommodate the
changing ethos, values, and expectations of those
who hold a stake in the profession.
• Most professions have an over all code of conduct
that also governs the way they carry out research.
• In doing any research there is an ethical
responsibility to do the work honestly and with
integrity.
 Ethical issues…..
• Research ethics is particularly important for
accounting and finance research because
financial data are mostly competitive and often
confidential.
• Therefore, researcher need to exercise utmost
due care in unanimously using financial data only
for his/her research.
• Thus, researchers must ensure the rights, privacy,
and welfare of the people and communities that
form the focus of their studies.
 Ethical issues…..
Stakeholder in research:
• There are many stakeholders in a research
activity so it is important to look the ethical
issues for each of the stakeholders.
1. The Participants or subjects
2. The researcher
3.The funding body
 Ethical issues…..
Participants: In social science and business
research participants include individuals,
groups, households, communities, firms and
consumers and provide information to help
the researcher to gain understanding of a
phenomenon, situation, issue or interaction.
• There are many ethical issues concerning
research participants: These are:
 Ethical issues…..
1. Seeking consent
• In every research it is considered unethical to collect
information with out the knowledge of participants
and their expressed willingness and informed
consent.
• Researcher could ask himself why should a
respondent give any information to a him-what right
does a researcher have to knock at someone’s door
or to send out a questionnaire.
• Researcher should justify and convince the relevance
and usefulness of the research to himself or to
participants or to the society at large.
 Ethical issues…..
• All informed consent procedures must meet
three criteria:
a. Participants must be competent to give
consent,
b.Sufficient information must be provided to
allow for a reasoned decision and
c. Consent must be voluntary and uncoerced
 Ethical issues…..
2. Privacy of participants
• Information sought can pose an ethical dilemma in
research.
• Certain types of information can be regarded as sensitive
or confidential by some people and thus an invasion of
privacy.
• Asking information on sexual behavior, drug use, marital
status, income and age may be considered to be an
invasion of privacy by some.
• It is not unethical to ask these questions provided that
you tell your respondents the type of information you are
going to ask clearly and frankly and give them sufficient
time to decide if they want to participate
 Ethical issues…..
3. Must not harm the participants
• Is the research going to harm participants in any
way? Like discomfort, anxiety, harassment etc
• The researcher must make sure that the risk is
minimal –not greater than an ordinarily
encountered in daily life
4. Maintaining confidentiality: sharing information
about a respondent with others for purposes
other than research is unethical.
 Ethical issues…..
Ethical issues relating researcher
1. Avoiding bias:
• Bias on the part of the researcher is unethical
• Bias is a deliberate attempt either to hide what has
been found in the study or to highlight something
disproportionately to its true existence
2.Using appropriate research methods
• A researcher has an obligation to use appropriate
methodology in conducting a study
• Example: Selecting a highly biased sample, using an
invalid instrument or drawing a wrong conclusions
 Ethical issues…..
3. Appropriate and correct reporting
• Using appropriate methodology but failing to
correctly report the findings is unethical
4. Appropriate use of information
• How will the information obtained from
respondent be used by the researcher? The
use of information in a way that directly or
indirectly adversely affects respondents is
unethical
 Ethical issues…..
Ethical Issues regarding sponsors
• Most research in business is carried out using
funds provided by sponsoring organizations for
specific purpose.
• They shall not influence the methodology to be
used by researcher.
• They shall not prohibit the publication of the
findings
• In general misuse of information, unfair
impositions, controls and restriction by funding
organization are unethical in research.
 Ethical issues…..
• In general researchers need to
– Protect research participants
– Develop trust with research participants
– Promote the integrity of research
– Guard against misconduct
– Cope with new problems that emerge
 Ethical issues…..
• In the Research Problem
– Identify a problem that will benefit individuals
being studied
• In the Purpose and Questions
– Convey the purpose and sponsors of the research
to participants
 Ethical issues…..
Ethical Issues In Data Collection
• Respect participants and sites
• Do not put participants at risk
• Respect vulnerable populations
• Obtain informed consent from participants
• Address issues of confidentiality
• Gain access to sites
• Make provisions for all participants to receive benefits
• Consider reciprocity
• Interview with sensitivity
• Anticipate issues that may arise
 Ethical issues…..
Ethical Issues In Data Analysis and Interpretation
– Protecting anonymity/secrecy/mystery of participants
– Storing data and destroying it after a set time
– Planning for ownership of the data and not sharing data with others
– Providing an accurate account of the data
Ethical Issues In Writing and Disseminating Research
– Use unbiased language when describing participants
– Do not suppress, invent, or falsify findings
– Anticipate the consequence of the study on audiences
– Provide authorship to those who substantially contribute
– Report the details of the research fully and honestly