Introduction
Research is important in a business to be able to have good management, useful in formulating strategy and in policy development or necessary to understand reports. Moreover, research is defined as systematic and methodical process of inquiry and investigation that increases knowledge and /or solves a particular problem ( 1992). In general, the purposes of a research are to review and have backgrounds on existing and available knowledge and information, and integrating them; to investigate existing situations or problems and providing solutions to them; to create new system or procedure or to generate new knowledge.
Depending on its purposes, business research can be classified as basic or applied ( 2003). The purpose of basic research are to expand knowledge of processes of business and management; to result in universal principles relating to the processes and its relationship to outcomes; or to find significance and value to society in general (2003). On the other hand, applied research is conducted to improve understanding of particular business problem; to obtain solution to problem; to gain new knowledge limited to problem; or to find practical relevance and value to manager in organization ( 2003).
To be able to achieve the purpose stated by a research, two major approaches to research are considered: the quantitative and the qualitative. The quantitative approach as term implies, heavily relies on statistics and figures. It is about basing the research on the past to describe the present and to project the future. Examples of qualitative research are studies on sales and prices of commodities or consumer behavior to be able to come up with marketing knowledge and strategies. Quantitative research is also termed as functionalist, objectivist or positivist (1998) because it usually uses the positivist paradigm of research. In management or organizational studies, the quantitative approach is seen as objective, which means that it is independent of individual thought and perceptible to all observers (1992). The emphasis of this approach is based on measurement, comparison and objectivity.
In contrast, qualitative research is the examination of perceptions and collected information to gain understanding of particular topics. It is seen as subjective, relating to experience or knowledge as conditioned by personal mental characteristics or states, and preferring language and descriptions (1998). It is also termed as interpretivist or subjectivist and tends to use the interpretivist paradigm. Examples of qualitative approach to research is the study on the role of managers or the research on marketing strategies based on case studies of successful companies.
The focus of the paper is on the paradigms of research. These paradigms as noted above are positivist and interpretivist. Realist paradigm is also discussed in this study. The paper compares and contrasts these paradigms in relation to business research.
Paradigm
Paradigm can be defined as the basis of a research. It provides theoretical model for viewing and analyzing the social world. It is a universally recognized scientific achievement that for a time provides model problems and solutions to a community of practitioners (1970). Paradigm is also a set of explicit and implicit assumptions about how research should be conducted in the pursuit of scientific knowledge ( 2003). It is important to determine the paradigm use in order for the researcher to his role on the research and how he will approach the research and collect information needed in the research.
Paradigm includes three levels: the philosophical which is the basic beliefs about the world we live in; the social level where guidelines exist as to how a researcher should conduct their research; and the technical level which involves method and techniques used when conducting a research (1979). The method and techniques used vary on the paradigm considered by the researcher. On the philosophical level, beliefs differ on the belief of the researcher and the source of the information used in the research especially in the qualitative approach. There are some who believe that individuals create their own environment ( 1983) and other believes that individuals are product of their environment. These beliefs are evident especially in the study of organizational behavior in a company. Some studies show that the culture of a company depends on the beliefs of its employees while some shows that a company should establish a culture and its employees should adapt to that culture through the motivation of the manager.
Business research has three bases or paradigms. These are positivist paradigm, the interpretivist paradigm and the realist paradigm. Positivist is the opposite of the interpretivist as quantitative approach contrasts the concept of the qualitative approach to research. Realist paradigm also referred to as the critical approach as embodied by the critical theorists requires a combination of both positivist and interpretivist approaches in order that an adequate understanding be achieved (1988).
Positivist Paradigm
Positivist paradigm uses precise, objective measures and is usually associated with quantitative data. Evidences or date used are quantifiable and lead to statistical data. These evidences are said to be empirical or those produced through experiments. Knowledge can only be produced through observation that involves the ability to measure and record something.
Positivist approach to research aims to discover universal laws that can be used to predict human activity. They tend to isolate, analyze and understand variables to formulate hypotheses. This is also called the cause-and-effect relationship. For example, when conducting research to project the sales of a company, the researcher will base the study on the past sales record of the company, observe the present situation or conduct internal analysis which involves observation on how appealing the product or services to the market; and conduct external environmental analysis which involves observations on the market trend and the competition. When the sales are projected to decrease, then the cause might be due to the competitors or some problems within the company itself. It is generally a business “law” that the more competition the lesser the sales because each company will vie for a certain position in the market The basis for this idea is that people do not behave randomly; behavior is caused by something and if we can understand these causes, we can explain and predict the effect. Positivists are objective analysts and are independent of the research (1996). The role of the researcher is to explain, predict or control. He stands aloof and apart from research subjects so that decisions can be made objectively. The methods used in a positivist approach to research should not be dependent upon the subjective interpretations of the researcher. Such methods are experiments, questionnaires, secondary data analysis, quantitatively coded documents and statistical analysis ( 2006) and deductive reasoning is used to make theories. Positivist approach because it is based on observable evidence and on statistical data, is said to be reliable, valid and factual.
Good examples of a positivist research are those conducted by engineers and R&D of a company like the one conducted for the Ford Motor Co. to improve Cpk’s of the fatigue strength of the AXS4 rear sun gear and drum assembly. The rear sun gear and drum assembly component of AX4S automatic transmission has a high warranty cost associated with the part welding operation. Manufacturing engineers feel that switching from a laser welding process to capacitive discharge welding process can increase the (2006).fatigue strength of the part. This project seeks to determine whether or not the change in welding process will increase reliability of the part. Laser welded and capacitive discharge welded parts were torsionally fatigued to failure or 1,000,000 cycles, whichever comes first. The data collected is cycles to failure. This data was matched to a best fitting probability distribution. Form this; a statistical comparison was made of the reliability of the two welding processes (2006).
Another positivist research is the valuation report of Microsoft Corp. done by the ValuEngine. The report shows the overall assessment of the company’s stock’s attractiveness based on its average past annual return.
The market research done by Nokia with the cooperation of the HPI Research Group about the perceptions of existing and future Multimedia Messaging Services (MMS)-based mobile services in the UK, Japan, US, Germany, Singapore and Finland shows that majority of the respondents are excited about MMS ( 2003). The data on this research helped the company project their sales and output and is another example of a positivist research.
Interpretivist Paradigm
In contrast with positivist paradigm, interpretivist paradigm involves description of experiences. It is primarily exploratory and descriptive in purpose designed to discover what can be learned about the area of interest (1998). In contrast to the causal mode of functionalist analysis or the positivist paradigm, interpretive analysis is associative, for the interpretivist, what is meaningful emerges from the data therefore the process is inductive (1996).
In interpretivist framework, data or evidences are collected and analyze through the method of ethnography, participant observation, interviews, focus groups, conversational analysis or case studies (2006). With these methods, it can be understood that the product of the research is based on the meaning of reality as perceived or experience by a group or an individual in a certain situation. Also what is true in one context may not be true for another therefore data may need to be gathered in a variety of contexts, which takes both time and effort (1995).
For example, McDonald’s wants to study on how the restaurant can improve its customer service. They may conduct interviews to the customers and as expected, these customers will have different perceptions. After the interviews, the researcher will then generalize and analyze the collected data. The result will never be that accurate for the respondents only represent a certain fraction of the customers and the answers may be biased but this method can be very useful in establishing a theory for the said purpose.
Another example of research based on interpretivist paradigm is with the used of case studies. Case studies are used to help explain real life interventions too complex for experimental strategies (2000). A firm may formulate and adopt strategies based on the experiences of other successful companies. Case studies are usually conducted to determine the effectiveness of such strategies and its applicability to other company. These may be done to address issues such as competitiveness, growth or marketing.
Ford Motor Co. also conducts interpretivist research such as the research done by entitled “Covisint Faster and Easier Access to Goods and Services?” which is also related to Ford Motor Co. since the company acquired Volvo Car Corporation in 1999. Covisint is an Internet Platform, a company that helps a company negotiates and conduct business with suppliers via the internet. The purpose of the study is to analyze how Covisint has affected Volvo Car Corporation (VCC) and its suppliers within the Swedish market. As a methodology for the research, the author used secondary sources such as Internet sources, newspaper articles, journals, books and other theses written whose topics are closely related to the subject.
Interpretivist paradigm aside from the method noted above also uses different research techniques. Descriptive or interpretative research is a technique where empirical observation is subjected to limited formal use of demanding standards. Controls over the researcher’s intuition include self-examination of the researcher’s own pre-suppositions and biases, cycles of additional data collection and analysis, and peer review (2000). Focus group research involves the gathering of a group of concern people commonly members of the public affected (2000). Action research plays an active role in the object of the study; ethnographic research is a technique that applies insights from social and cultural anthropology to the direct observation of behavior and the grounded theory is a technique that enables the disciplines extraction of a theory-based description of behavior based on empirical observations (2000).
Realist/Critical Paradigm
Most applied research today, for the purpose of obtaining solutions to problems, used the realist or critical paradigm. The critical realist philosophical ontology states that something is real if it can bring about visible/material consequences. In other words, in critical realism something is real if it is causally efficacious (2001). Underlying realism are six principles (1997). Mentioning only three of them, the first principle is the belief in objective realities whether of entities, theories or values. Second is the anti-positivist view of both the natural and the social sciences. Third is an emphasis on causal explanations that are largely explained via qualitative research and seeks to uncover the structures, mechanisms and emergent properties of the social world.
The type of reasoning use with this model is both inductive and deductive. The researcher, like in interpretivist paradigm, is also involved with research subjects so that surface illusions can be identified but urges subjects to change their world (2006). The imperative for change guides the actions of the researcher.
Since it urges changes, this paradigm is useful in organizations that find the desire to change or really needed changes in their companies. Such changes can be due to business process, system, growth strategy or IT strategy. This is evident on the research done by (2006) wherein they presented the benefits of using realist paradigm or the combination of qualitative and quantitative approaches to develop a model which will aid the managers of Small-to-medium Sized Enterprises, SMEs in changing the IT system of their company. The project was called RAMESES, Risk Assessment Model: Evaluation Strategy for Existing Systems. It presented a research life cycle that involves different stages. Each stage use different approach and methods applied. In one stage such as in identifying area of concern and in generating theory, the approach used was interpretive while in the stage of applying the theory, realist paradigm was used using the methods of questionnaires, participant observation and interviews. In testing and validating the hypotheses, positivist paradigm was used.
The research used the qualitative approach to aid the understanding of interconnectedness that is the application of the knowledge in networking. Quantitative approach or the positivist paradigm was helpful in making decisions such as on what is the capacity of the system or the speed required. Basically, this kind of change imposes in companies needed critical evaluation and analysis thus critical or realist paradigm is very useful.
Another realist research is the one conducted by entitled Central Global Arches: A Cultural Look at McDonald’s influences of McDonald’s franchises in Europe. It used the National Franchises in Central Europe which study, as the title implies, the cultural Trade Data Bank as the source 0of sample survey to reveal consumer demographics, like and dislikes. Then a minimum of two visits were spent in a local McDonald’s observing clientele, service, food and structure of the franchise as well as to conduct interviews on managers and employees. Other examples of realist research are those which deal with sustainable development done by most companies today.
Conclusion
Research in the field of business is as important as research in any other fields such as in medicine and psychology. Therefore it needs to use different appropriate frameworks or paradigms that serve as guidelines in conducting research. These paradigms are the positivist, the interpretivist, and the realist. Positivist and interpretivist contrasts each other for positivist paradigm depends on statistical data, and is objective while interpretivist paradigm is subjective and information is given by the research subject through description. The combination of both paradigms is called the realist paradigm that is used for critical analysis that urges change. It is not practical to argue on which is the most useful paradigms, for each of them has its own practical use and is applicable on different situations especially in business research.
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