BUSINESS RESEARCH

METHOD
CHAPTER TWO
Esubalew Almaw
 CHAPTER 2
FORMULATION OF RESEARCH PROBLEMS AND
HYPOTHESES

 In research process, the first and foremost step happens to be that of

selecting and properly defining a research problem.
 A researcher must find the problem and formulate it so that it
becomes susceptible to research.
 To define a problem correctly, a researcher must know: what a
problem is?
 If one wants to solve a problem one must generally know what
the problem is.
Cont’d…

 Like a medical doctor, a researcher must examine all the

symptoms (presented to him or observed by him) concerning a
problem before he can diagnose correctly
 There is a famous saying that “Problem well defined is a problem
half solved”. This statement is true in any research because if the
problem is not stated properly, the objectives will not be clear,
Once objectives are not clearly defined, data collection becomes
meaningless.
2.1 What is Research Problem?

 The first step in the research process is the choice of suitable

problem for investigation
 Research problem refers to a problem that someone would like to
investigate; a situation that needs to be changed or addressed.
 A research problem is a specific issue, difficulty, contradiction, or
gap in knowledge that a researcher seeks to address through their
research.
 It is the question or issue that the research aims to answer or solve.
Cont’d …..
5

 It is the foundation of the research process and helps guide the

research design, methods, and analysis.
 Research problem is difficulty which a researcher experiences in
the context of either a theoretical or practical situation and wants to
obtain a solution.
 It is a condition that causes a researcher to feel anxious, uneasy
and confused.
 It involves the complete analysis of the problem area involving
who, what, where, when and why of the problem situation.
2.1.1. Defining research problem

 Defining research problem is crucial and very hard part of a

research process. It is crucial because, a well-defined research
problem is essential for guiding the research process, ensuring that
the study is focused and relevant, and ultimately leading to
meaningful and valuable results.
 Defining the research problem is the most difficult and hard part
of the research study due to the complexity of distinguishing
between cause and effect. Ensuring the identified problem is the
cause, not the effect, is crucial for accurate research.
Cont’d…..
 Problem definition or problem statement is a clear, precise, and
brief statement of the question or issue that is to be investigated
with the goal of finding an answer or solution.
 For example, the problem could relate to:

1. existing business problems where the manager is looking

for a solution,
2. situation that may not pose any current problems but
which the manager feels have scope for improvement,
3. areas where some conceptual clarity is needed for better
theory building,
4. situations in which a researcher is trying to answer a
research question empirically because of interest in the
topic.
Cont’d….

Example
1. The effects of social media on people:
 What are the effects of social media on people?
(incorrect)
 What effect does using Facebook everyday have on
teenagers? (correct)
 In the above example, the first question is not specific
enough to capture accurate feedback.
 Nobody knows what social media researcher is talking about
and what ‘people’ (target population) researcher is referring
to.
 2.1.2. Elements/ Components of Research Problem
9

1. Objective or aim of the problem which is to be investigated.

This answers the question “Why?” Why is there a need for
investigation, inquiry or study?

2. The topic or theme which needs to be investigated. This answers

the question “What?” What is to be researched or studied?”

3. The period (time) of the study during which the data are to be
gathered. The period or time of the study when the data are to be
gathered. This answers the question “When?” When is the research to
be performed?”
Cont’d…

4. The area or location in which the study is to be conducted. This

answers the question “Where?” Where we need to conduct the
study? The space coordinates give you the geographic boundaries
within which the action is to be taken.

5. Population (universe) from whom the data are to be collected.

This answers the question “Who?” or “from whom?” Who are the
respondents? From who are the data to be collected?”
2.1.3. Steps in Formulating a Research Problem/Topic

 The following are the major steps in formulating a

Research problem:
1. Identify broad fields of study. In which area are you
most interested?
 E.g. Management, Logistics, Accounting,
Economics or Marketing
2. Dissect the broad area into sub-areas,
 E.g. HRM, Motivation, and Leadership

3. Select the sub-areas which you are most interested

within the subject by considering your knowledge,
time, budget…etc
Cont’d….
4. Raise research questions in questionnaire or interview guides.

5. Formulate research objectives:

 Research objectives are drive from research questions.

6. Assess objectives- evaluating the objectives in the light of the

time, budget, technical and professional expertise about the
subject and other related resources.

7. Double check- go back and make sure that you have sufficient
interest, time, resource and expertise, if you are happy, then you
jumps to next step.
2.1.4. Potential Sources of research problem

 Reading * Academic Experience

 Daily experience * Exposure to field situation
 Consultation * Past research (literature)
 Brainstorming *Intuition
 Innovation * Theory of one’s own interest
 Daily problems * Technological changes
 Unexplored areas * Discussions with some people
 2.1.5. Selecting & Defining Research Problem
 The research problem undertaken for the study must be carefully
selected.
 The research problem selected for research must satisfy the

following features:
 It should be of great interest to you
 The problem should be Relevance/Significance
 It should not be too general or too specific
 It must be operational and should not be too subjective and non-
measurable.
 It should be delineated (explained) Consider the time you have to
complete the work.
 It should be attainable interims of ;information required,
conclusions related to the problem, statement of the problem etc…
 2.1.6. Criteria of Good Research Problem
 The research problem should be evaluated in terms of the following
criteria:
1. Originality ( Novelty): the research problems need to be new
or avoidance of duplication
2. Interesting: The problem should be interesting for the
investigator himself.
3. Importance: be significant enough and involve an important
principle or practice.
4. Feasibility or Amenability :
 the required competence, knowledge and understanding;
 administer and interpret the necessary data- gathering
devise and procedures.
Cont’d….

5. Availability of Data:
 ensure the availability of valid and reliable data gathering
devices and procedures
6. Availability of cooperation:
 The study may require cooperation from various institutions,
authorize and individuals.
7. Availability of other facilities-
 should be able to meet the expenditure involved in data
gathering equipment printing, travel, computerization, clerical
help, preparation of the reports, training, cost, and time
Cont’d…..
8. Applicability of the result
 Will my research help in solving an urgent problem?

9. Ethical issues ( acceptance)

 should be formulated in accordance with ethical
guidelines and principles.

10. Experience and creativity-

 a clear understanding of the theoretical, empirical and
practical aspects of the subject derived from personal
experience and from a thorough review of the literature.
2.1.7.Formulating and stating the problem

 Problem formulation is perceived as most important of all the

other steps, because of the fact that a clearly and accurately
identified problem would lead to effective conduct of the other
steps involved in the research process.
 Problem formulation refers to translating the management
problem into a research problem. It involves stating the general
problem and identifying the specific components of research
problem.
Cont’d…
 The problem must be definitely formulated and stated:
 There are two different ways of stating a problem:-
1. Posing question /questions
2. Making declaration statement /statements
 The formulation of the problem requires the following
prerequisites:
1. Definition of the problem: to establish the frame of reference
with which the researcher approaches the problem.
2. Delimitation of the problem:-is statement of the limits or scope
of the investigation.
 It will provide information concerning who, what, where and how many.
3. Justification of the problem: Problems should be broad-based
enough to provide an investigation of real significance.
2.1.8. Necessity of Defining the Problem

 It help to discriminate relevant data from the irrelevant ones

 It helps in gaining a clear understanding of what needs to be solved
 It helps in identifying the specific issues and challenges that need to be
addressed.
 It helps in narrowing down the scope and focusing on the most
important aspects of the problem.
 It help to identify the root causes of the issue.
 It helps in setting specific and measurable goals for solving the
problem.
 It helps in evaluating the effectiveness of the solutions implemented
 2.1.9. Guidelines for the Statement of the Problem
21

 The research problem should be defined in a systematic manner.

 The technique involved in defining a research problem has a
number of steps, which should be under taken one after another.

I. Stating the problem in a general way: - The researcher should

state the problem in general terms, keeping in view either some
practical concern or some scientific or intellectual interest.
 Cont’d….
22

 Example:
 In case of social research, it is advisable to do some field
observation and as such the researcher may undertake some
sort of preliminary survey or what is often called pilot survey.
 Then the researcher can himself state the problem or he can
seek the guidance of the guide or the subject expert in
accomplishing this task.
 The problem stated in a broad general way may contain
various ambiguities which must be resolved by cool
thinking and rethinking over the problem.
 Cont’d….
23

(ii) Understanding the nature of the problem:

 The next step is to understand clearly the nature and the origin of
the problem. The best way of understanding the problem is:
 To discuss with those who first raised the problem in order to
know how the problem originally came in view.
 To discuss it with those who have a good knowledge of the
problem concerned or similar other problem.
 The researcher should also keep in view the environment within
which the problem is to be studied and understood.
 Cont’d….
24

(iii) Surveying the available literature:

 All available literature concerning the problem at hand must
necessarily be surveyed and examined before a definition of the research
problem is given.

 He//she must devote sufficient time in reviewing of research already

undertaken on related problems. This is done to find out what data and
other materials, if any, are available for operational purposes.

 “Knowing what data are available often serves to narrow the

problem itself as well as the technique that might be used.”
 Cont’d….
25

(iv) Developing the ideas through discussions:

 Discussion concerning a problem often produces useful information.
Various new ideas can be developed through such an exercise.
 Hence, a researcher must discuss his problem with his colleagues and
others who have enough experience in the same area or in working on
similar problems. This is quite often known as an experience survey.
 People with rich experience are in a position to enlighten the
researcher on different aspects of his proposed study and their advice
and comments are usually invaluable to the researcher.
Cont’d….
26

(v) Rephrasing the research problem:(reformulation of the problem)

 Finally the researcher at this stage should be able to reformulate the
problem that has been stated in broad and general way into
working proposition.
 The researcher should narrow and break down the problem into its
components variables and relationship. That is, problem should be
expressed as:
 a relationship between two or more variable
 the problem should be stated either in question form or
hypothesis form.
Cont’d….
27

 Question form is appropriate mostly when the research is descriptive in

nature.
 The important thing here is that when a researcher state the problem in
question form, the formulated problem should be free from ambiguity
and the relationship among variables should be clearly expressed.
 Does a relationship exist between income of university students and
score on their exams?
 Is there a relationship between employees' age and their productivity?
 In above examples, the study’s main elements are identified in reasonably
clear fashion.
Cont’d….
 In addition to what has been stated above, the following points
must also be observed while defining a research problem.
 Technical terms and words phrases, with special
meanings used in the statement of the problem, should be
clearly defined
 Basic assumption relating to the research problem should be
clearly stated
 A straight forward statement of the value of the
investigation should be provided.
Cont’d….
 The suitability of the time-period and the sources of data
available must also be considered
 The scope of the investigation or the limits within which the
problem is to be studied must be mentioned explicitly in defining
a research problem.
2.2. Research Hypothesis & Hypothesis Testing

 Hypothesis is an assumption made by the researcher to explain

certain fact or provide basis for further investigation.
 It is a temporally proposed answer to a research problem.
 It states what the researcher thinks the outcome of the study will
be.
 The researcher makes hypothesis and collects data that either
support the hypothesis or do not support it.
 So the hypothesis may be proved to be correct or incorrect.
Cont’d…..

 Hypothesis is a testable statement/theory that describes the nature

of the proposed relationship between two or more variables.
 It is an intellectual/educated guess.
 It is a statement temporarily accepted as true.
Kinds of Hypotheses
I. Null Hypothesis
 states that there is no significant relationship or difference
between variables.
 It is the default assumption to be tested in a study.
 Researchers aim to reject the null hypothesis in favor of the
research hypothesis, indicating that there is indeed a
relationship or difference between the variables being
studied.
Cont’d…..

II. Alternative hypothesis: Also known as the a Research

Hypothesis
 It postulates a relationship or difference between variables.
 It is typically based on existing theories, prior research, or
observations.
 Research hypotheses are specific and testable statements that
predict the outcome of a study.
Cont’d…..
2.2.1. Source of Hypothesis
 A hypothesis is usually derived from
 an educational guess based on published articles or
 preliminary observations
 Preliminary study (pilot survey)
 Literature review:
 helps identify gaps in knowledge or areas for further
investigation, leading to the development of new hypotheses
based on prior findings and theories.
Cont’d…..
 Logical reasoning and deduction

 Commonly held beliefs

 researchers can either confirm or refute commonly held beliefs
2.2.2. Characteristics of hypothesis:

 A hypothesis should be empirically testable

 A good hypothesis is in agreement with the observed facts.
 A good hypothesis does not conflict with any law of nature.
 Hypothesis should be clear and precise.
 Hypothesis should state relationship between variables,
 Hypothesis should be limited in scope and must be specific
 Hypothesis should be stated as far as possible in most simple terms so
that the same is easily understandable by all concerned.
 Cont’d….
37

 Hypothesis should be consistent with most known facts, i.e., it

must be consistent with a substantial body of established facts.
 Hypothesis should be amenable to testing within a reasonable
time.
 Hypothesis must explain the facts that gave rise to the need for
explanation.
 2.2.3. Importance of Hypothesis

Represents specific objective, which determine the nature of the

data needed to test the proposition
Offer basis for selecting the sample, the research procedure, and
the statistical analysis needed.
Keeps the study restricted in scope
Sets a framework for reporting the conclusion of the study
2.2.1.Formulation of Hypothesis

 Formulation of hypothesis must keep the following

procedures:
1. Identification of Research Problem and its causes:
 The researcher must identify the research problem which
needs to be investigated.
 Example : The research problem could be
 “Decline in Sales of Lux soap in Addis Ababa Region”. The
possible causes of such decline in sales could be:
• Poor quality of the products
• Higher price of the product
• Ineffective promotion-mix
• Faulty distribution network
Cont’d….
2. Formulate the Hypotheses:
 The researcher may undertake extensive Review of Literature (ROL)
or discuss with expert.
 For example : Hypotheses relating to the above problem can be
formulated as:
 Sales are declining on account of poor quality of the products
 Sales are declining on account of higher price of the product
 Sales are declining on account of ineffective promotion-mix
 Sales are declining on account of Faulty distribution network
Cont’d….
3. Pilot Test the Hypotheses:
 The researcher may conduct pilot study to test the hypothesis.
 Small sample respondents are selected and data is collected from
them to conduct the pilot study
 The pilot study may indicate the most probable cause of the
problem.
 help to select the best hypothesis for the purpose of detailed
investigation.
 Suppose the pilot study states that most probable cause of problem
is poor quality of the product.
Cont’d….
4. Select the Best Hypothesis:
 The researcher may specify the null hypothesis and
alternative hypothesis.
i. Null Hypothesis: It states that there is no relationship
between two or more variables.
A researcher hopes to reject or disprove the null hypothesis.

o Example: . There is no relationship between poor quality of

product and decline in sales.

II. Alternative Hypothesis: It states there is relationship between two or
more variables.
 Example: There is relationship between poor quality of product
and decline in sales.
Cont’d….

5. Conduct the Research:

 After formulating the final hypothesis, the researcher
proceeds to conduct the research.
 prepare research design to conduct research in right direction.
 The researcher collects data and analyze the same to draw
conclusion.
 may use T-test, Z-test, Chi- Square, ANOVA, Correlation etc. tests
for the purpose for testing hypothesis.
Cont’d….

6. Acceptance or Rejection of Hypothesis:

 After testing the hypothesis, the researcher may reject the null
hypothesis or the researcher may fail to reject the null
hypothesis.
 when the researcher rejects the null hypothesis, the researcher
may accept the alternative hypothesis. At times, the
alternative hypothesis may also be rejected
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Chapter End

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