Unit – 2

Research Design in Accounting and Finance

2.1 Meaning of Introduction, Need, and Good research design

A research plan is a structure or a model for the conduct of a marketing research project. It details the processes required to collect the knowledge needed to organise or overcome marketing analysis problems. Simply put, it's a general plan on how you're going to conduct your research.

According to Kerlinger

Research design is an inquiry plan, structure and methodology intended to provide answers and handle variation to research questions.

According to Green and Tull

Study is a specification of the methods and procedures for gathering the required details. It is the general operating structure or system of the project that determines what information is to be obtained from which sources by what procedures.

The role of the research design is to ensure that the necessary data are obtained precisely and economically as a result of the issue at hand. Simply put, it is a structure, a model for a research study that directs data collection and analysis. Design of the study, depending on the needs of the researcher, can be a very comprehensive statement or include just the minimal details essential for the preparation of the research project.

In order to be successful, the study design should have at least the following information.

More explicitly, the design decisions happen to be in respect of:

• What is the study about?
• Why is the study being made?
• Where will the study be carried out?
• What type of data is required?
• Where can the required data be found?
• What periods will the study include?
• What will be the sample design?
• What techniques of data collection will be used?
• How will the data be analyzed?
• In what style will the report be prepared?

Advantages of research design

Key Takeaways:

1. A research design is a framework or blueprint for conducting the marketing research project.
2. It details the procedures necessary for obtaining the information needed to structure or solve marketing research problems.
3. The function of a research design is to ensure that requisite data following the problem at hand is collected accurately and economically. Simply stated, it is the framework, a blueprint for the research study which guides the collection and analysis of data.
4. The research design, depending upon the needs of the researcher may be a very detailed statement or only furnish the minimum information required for planning the research project.

2.2 Need for Research Design

Research design is needed because it facilitates the smooth sailing of the various research operations, thereby making research as efficient as possible yielding maximal information with minimal expenditure of effort, time, and money. Research design has a significant impact on the reliability of the results obtained. It thus acts as a firm foundation for the entire research.

For example, economical and attractive construction of a house we need a blueprint (or what is commonly called the map of the house) well thought out and prepared by an expert architect, similarly, we need a research design or a plan in advance of data collection and analysis for our research project.

Research design stands for advanced planning of the methods to be adopted for collecting the relevant data and the techniques to be used in their analysis.

The need for research design is as follows:

• It reduces inaccuracy;
• Helps to get maximum efficiency and reliability;
• Eliminates bias and marginal errors;
• Minimizes wastage of time;
• Helpful for collecting research materials;
• Helpful for testing of hypothesis;
• Gives an idea regarding the type of resources required in terms of money, manpower, time, and efforts;
• Provides an overview to other experts;
• Guides the research in the right direction.

Key Takeaways:

1. Research design is needed because it facilitates the smooth sailing of the various research operations, thereby making research as efficient as possible yielding maximal information with minimal expenditure of effort, time, and money
2. Research design has a significant impact on the reliability of the results obtained.
3. Research design stands for advanced planning of the methods to be adopted for collecting the relevant data and the techniques to be used in their analysis.

2.3 Good Research Design:

The characteristics of good research design can be characterized by adjectives such as flexible, adequate, effective, economical, etc. A good design is a design that minimizes bias and maximizes the reliability of the data that is collected and analyzed.

In many investigations, the design that can provide the smallest experimental error is supposed to be the best design. The most appropriate and efficient design for many research problems is considered to be a design that produces maximum information that takes into account many different aspects of a problem. Therefore, the issue of good design can be related to the research problem's purpose or goal and also to the nature of the problem to be studied. In one case, the design can be quite appropriate, but in the context of some research problem, perhaps found wanting in one respect or the other. The purpose of all types of research problems cannot be served by one single design.

A research design suitable for a specific research problem typically involves the consideration of the following factors:

Key Takeaways:

1. Adjectives such as flexible, suitable, efficient, economical, and so on often characterize the characteristics of good research design.
2. The assumption can be made on the basis of some proof. This is the initial point of any investigation that translates a prediction into the research questions. Components like variables, population, and the relationship between the variables may be included. A study hypothesis is a hypothesis used to test the relationship of two or more variables.

2.4 Formulation of Hypothesis

Formulation of the Hypothesis in research is an essential task in the entire Research Process which comes in the third step. A hypothesis can be a tentative solution to a research problem or question. We will be covering a functional definition of hypothesis & basic Steps in the formulation of hypotheses for your research.

Research works are designed to verify the hypothesis. Therefore, a researcher, of course, would understand the meaning and nature of the hypothesis to formulate a hypothesis and then to test the hypothesis.

A hypothesis the tentative assumption drawn from practical knowledge or theory. A hypothesis is used as a guide in the inquiry of other facts or theories that a researcher is unaware. However, the formulation of the hypothesis is the most difficult step in the entire scientific research process.

Therefore, in this regard, we intend to point out basic steps in formulation of a hypothesis. We are pretty sure that these guidelines will be helpful in your research works.

1. Define Variables

First, to formulate a hypothesis, you must define your variables. What do you want to test? Will you test that rewards increase reading achievement? Or rewards decrease reading achievement? Whatever your goals are, they should be clearly defined, quantifiable, and measurable. This will provide you with a clear idea of what to follow to achieve results.

2. Study In-Depth the Variables

If we think that your variables are Rewards & Achievements, then you need to intensely study how the rewards increase reading achievements? An in-depth study, rigorous questions, and the data of rewards increase reading achievements will make you able to confirm your hypothesis. Specify dependent and independent variables.

3. Specify the Nature of Relationship

Identify what relationship there exists between the variables. What variable influences the other? That is what the dependent variable is and what is the independent variable? How the Rewards impact achievements? If rewards play a key role in reading achievements, then reward is the independent variable.

4. Identify Study Population

The population in research means the entire group of the individuals is going to study. If you want to test how rewards increase reading achievements in the United Kingdom, you need not study the whole population of the United Kingdom. Because the total population does not involve reading achievements. Therefore, the researcher must identify the study population.

5. Make Sure Variables are Testable

Variables in your hypothesis must be testable. Otherwise, the hypothesis would be worthless. Because your research study should accept or reject a variable. So, variables you must need to test. Testable variables can only be accepted or rejected. Moreover, the sole aim of the research hypothesis is to test variables in the long run.

In conclusion, a researcher or investigator can generate more accurate research results through exactly the following 5 basic Steps in the Formulation of a Hypothesis.

2.5 Sources of Hypothesis:

Following are the sources of the hypothesis:

• The resemblance between the phenomenons.
• Observations from past studies, present-day experiences, and competitors.
• Scientific theories.
• General patterns that influence the thinking process of people.

Importance of Hypothesis:

• It ensures the entire research methodologies are scientific and valid.
• It helps to assume the probability of research failure and progress.
• It helps to provide a link to the underlying theory and specific research question.
• It helps in data analysis and measures the validity and reliability of the research.
• It provides a basis or evidence to prove the validity of the research.
• It helps to describe the research study in concrete terms rather than theoretical terms· Generally, the design which minimizes bias and maximizes the reliability of the data collected and analyzed is considered a good design.
• The design which gives the smallest experimental error is supposed to be the best design in many investigations.
• A design may be quite suitable in one case but maybe found wanting in one respect or the other in the context of some other research problem.

2.6 Hypothesis

Types of Hypothesis:

There are six forms of hypothesis and they are:

• Simple hypothesis
• Complex hypothesis
• Directional hypothesis
• Non-directional hypothesis
• Null hypothesis
• Associative and casual hypothesis

Simple Hypothesis

It shows a relationship between one dependent variable and a single independent variable. For example – If you eat more vegetables, you will lose weight faster. Here, eating more vegetables is an independent variable, while losing weight is the dependent variable.

Complex Hypothesis

It shows the relationship between two or more dependent variables and two or more independent variables. Eating more vegetables and fruits leads to weight loss, glowing skin, reduces the risk of many diseases such as heart disease, high blood pressure, and some cancers.

Directional Hypothesis

It shows how a researcher is intellectual and committed to a particular outcome. The relationship between the variables can also predict its nature. For example- children aged four years eating proper food over five years are having higher IQ levels than children not having a proper meal. This shows the effect and direction of effect.

Non-directional Hypothesis

It is used when there is no theory involved. It is a statement that a relationship exists between two variables, without predicting the exact nature (direction) of the relationship.

Null Hypothesis

It provides a statement that is contrary to the hypothesis. It's a negative statement, and there is no relationship between independent and dependent variables. The symbol is denoted by "HO".

Associative and Causal Hypothesis

Associative hypothesis occurs when there is a change in one variable resulting in a change in the other variable. Whereas, the causal hypothesis proposes a cause-and-effect interaction between two or more variables.

Key Takeaways:

1. A hypothesis is an assumption that is made based on some evidence.
2. This is the initial point of any investigation that translates the research questions into a prediction. It includes components like variables, population, and the relation between the variables.
3. Formulation of Hypothesis in research is an essential task in the entire Research Process that comes in the third step
4. A hypothesis is used as a guide in the inquiry of other facts or theories that a researcher does not know. However, the formulation of the hypothesis is one of the most difficult steps in the entire scientific research process.

2.7 Different Research designs:

There are three main types of research design: Data collection, measurement, and analysis.

The type of research problem an organization is facing will determine the research design and not vice-versa. The design phase of a study determines which tools to use and how they are used.

An impactful research design usually creates a minimum bias in data and increases trust in the accuracy of collected data. A design that produces the least margin of error in experimental research is generally considered the desired outcome. The essential elements of the research design are:

Proper research design sets your study up for success. Successful research studies provide insights that are accurate and unbiased. You’ll need to create a survey that meets all of the main characteristics of a design.

A researcher must have a clear understanding of the various types of research design to select which model to implement for a study. Like research itself, the design of your study can be broadly classified into quantitative and qualitative.

• Qualitative research design: Qualitative research determines relationships between collected data and observations based on mathematical calculations. Theories related to a naturally existing phenomenon can be proved or disproved using statistical methods. Researchers rely on qualitative research design methods that conclude “why” a particular theory exists along with “what” respondents have to say about it.

• Quantitative research design: Quantitative research is for cases where statistical conclusions to collect actionable insights are essential. Numbers provide a better perspective to make critical business decisions. Quantitative research design methods are necessary for the growth of any organization. Insights drawn from hard numerical data and analysis prove to be highly effective when making decisions related to the future of the business.

You can further break down the types of research design into five categories:

1. Descriptive research design: A researcher is solely interested in describing the situation or case within their research study in a descriptive design. It is a method of theory-based design that is developed by gathering, analyzing, and presenting data collected. This allows a researcher to provide insights into the research's why and how. Descriptive design helps others to better understand the study requirements. You can perform exploratory research if the problem statement is not clear.

2. Experimental research design: A relationship between the cause and effect of a situation is established by experimental research design. It is a causal model where one observes the effect on the dependent variable caused by the independent variable. For instance, the effect of an independent variable such as a price on a dependent variable such as customer satisfaction or brand loyalty is monitored. As it contributes to solving a problem at hand, it is a highly practical method of research design. To monitor the shift it has on the dependent variable, the independent variables are manipulated.

In social sciences, it is often used to observe human conduct by analyzing two groups. To gain a better understanding of social psychology, researchers can have participants change their actions and study how the individuals around them react.

3. Correlational research design: Correlational research is a technique of non-experimental research design that helps researchers to establish a relationship between two variables that are closely linked. Two different groups require this type of research. While evaluating a relationship between two different variables, there is no assumption, and the relationship between them is calculated by statistical analysis techniques.

The correlation between two variables whose value varies between -1 and +1 is determined by a correlation coefficient. If the coefficient of correlation is +1, a positive relationship between the variables is indicated, and -1 means a negative relationship between the two variables.

4. Diagnostic research design: The researcher is looking to evaluate the underlying cause of a specific subject or phenomenon in the diagnostic design. This technique helps one to learn more about the variables that create troubled situations.

This design has three parts of the research:

• Inception of the issue
• Diagnosis of the issue
• Solution for the issue

5. Explanatory research design: Explanatory design uses the ideas and thoughts of a researcher on a topic to explore their theories further. The study explains unexplored aspects of a topic and details of what, how, and why research questions are asked.

Key Takeaways:

1. Three main types of research design exist: collection, measurement and analysis of data.
2. Usually, an impactful research design creates a minimum data bias and increases confidence in the accuracy of data collected. In experimental research, a design that produces the least margin of error is generally considered the desired result.
3. Qualitative research determines relationships based on mathematical calculations between collected data and observations.
4. For cases where statistical conclusions to gather actionable insights are essential, quantitative research is essential. In order to make critical business decisions, numbers provide a better perspective.

Reference Books:

1) Research Methods in Accounting, Malcolm Smith

2) Research Methods and Methodology in Finance and Accounting, by Viv Beattie   and Bob Ryan