Research Process & Problem Formulation: Steps, Types & Tools

Key Concepts in Research Process and Problem Formulation

1. What is Business Research?

Business research is a systematic, objective, and logical process of gathering, analyzing, and interpreting data to solve business problems or identify opportunities. It involves:

• Problem identification: Recognizing gaps or inefficiencies.
• Data collection: Gathering relevant information.
• Analysis: Interpreting data to draw conclusions.
• Recommendations: Providing actionable insights.

Why is it important? Business research helps organizations make informed decisions, reduce risks, and improve efficiency. For example, Nepal Rastra Bank (NRB) uses research to analyze economic trends and formulate monetary policies.

2. The Research Process: A Step-by-Step Flowchart

The research process is a cyclical and iterative process. Below is a simplified flowchart of the key steps:

flowchart TD
    A["Identify Problem"] --> B["Review Literature"]
    B --> C["Define Objectives"]
    C --> D["Develop Hypothesis"]
    D --> E["Choose Research Design"]
    E --> F["Collect Data"]
    F --> G["Analyze Data"]
    G --> H["Interpret Results"]
    H --> I["Report Findings"]
    I -->|"Feedback Loop"| A

Step-by-Step Breakdown

3. Problem Formulation: How to Define a Research Problem

A well-defined research problem should be:

• Clear and specific: Avoid vague statements.
• Feasible: Should be achievable within given resources.
• Relevant: Should address a real-world issue.
• Researchable: Should be answerable with available methods.

How to Formulate a Problem?

1. Identify the broad area of concern (e.g., customer dissatisfaction).
2. Narrow it down (e.g., "Why do customers complain about Daraz’s late deliveries?").
3. Make it researchable (e.g., "What are the key factors causing delays in Daraz’s last-mile delivery?").

Example: eSewa’s Transaction Failures

• Problem: High failure rate in online payments.
• Refined Problem: "What are the technical and user-related factors causing eSewa transaction failures?"
• Research Objective: "To identify and reduce transaction failures by 15% in 3 months."

4. Types of Research Problems

Research problems can be classified based on their nature:

5. Developing Research Objectives

Research objectives should be:

• SMART: Specific, Measurable, Achievable, Relevant, Time-bound.
• Action-oriented: Should guide the research process.

Example: Nabil Bank’s Loan Defaults

• Problem: High loan default rates among SMEs.
• Objective: "To analyze the financial and operational factors contributing to loan defaults in Nabil Bank’s SME portfolio and propose mitigation strategies."

6. Hypothesis Development

A hypothesis is a testable statement that predicts the outcome of a research study.

Types of Hypotheses

Example: Toyota’s Electric Vehicle Adoption

• Hypothesis: "Consumers in Kathmandu are more likely to adopt electric vehicles if charging infrastructure improves."
• Testing: Surveying potential buyers about their willingness to switch.

7. Research Design: Choosing the Right Approach

Research design determines how data will be collected and analyzed. The three main types are:

In the Real World

1. eSewa’s Transaction Failures

   • Problem: High failure rate in online payments (e.g., 15% of transactions fail).
   • Research Process:
     • Problem Formulation: "Why do eSewa transactions fail, and how can this be reduced?"
     • Data Collection: Analyzing server logs, customer feedback, and bank transaction records.
     • Hypothesis: "Poor internet connectivity and server overload cause 60% of failures."
     • Solution: Optimizing server capacity and improving user error messages.
   • Outcome: Reduced failure rate by 25% in 6 months.

2. Pathao’s Driver Performance

   • Problem: High driver turnover and low customer ratings.
   • Research Process:
     • Objective: "Identify factors affecting driver retention and customer satisfaction."
     • Method: Surveys, interviews, and ride data analysis.
     • Finding: "Drivers with flexible schedules and bonuses have higher retention rates."
   • Solution: Introduced performance-based bonuses and flexible shift options.

3. Nabil Bank’s Loan Approval Process

   • Problem: Slow loan approvals leading to customer dissatisfaction.
   • Research Process:
     • Hypothesis: "Automating document verification will reduce approval time by 40%."
     • Testing: Piloting an AI-based verification system.
   • Outcome: Approval time reduced from 10 days to 3 days.

8. Case Study: Daraz’s Last-Mile Delivery Challenges

Problem: Daraz faces delays in last-mile deliveries, leading to customer complaints. Research Approach:

1. Problem Formulation:
   • "What are the key bottlenecks in Daraz’s last-mile delivery process?"
2. Data Collection:
   • Primary Data: Surveys with customers and delivery agents.
   • Secondary Data: Delivery logs, traffic data from NTC.
3. Findings:
   • Traffic congestion in Kathmandu accounts for 40% of delays.
   • Lack of delivery slots in residential areas causes inefficiencies.
4. Recommendations:
   • Optimize delivery routes using AI.
   • Expand delivery slots in high-density areas.
5. Outcome:
   • 18% reduction in delivery delays within 4 months.

9. Common Mistakes in Problem Formulation

• Too broad: "How to improve business?" → Fix: "How can Nabil Bank improve customer satisfaction in digital banking?"
• Too narrow: "Why do customers complain about Daraz’s website?" → Fix: "What are the top 3 usability issues on Daraz’s mobile app?"
• Unresearchable: "How can Nepal become the best country?" → Fix: "What policies can reduce unemployment in Kathmandu by 2025?"

Exam Tip

How This Unit is Examined

1. Short Questions (5-10 marks):

   • Define research process, problem formulation, or hypothesis.
   • Differentiate between exploratory, descriptive, and causal research designs.
   • Example:

     "Explain the steps in the research process with an example from a Nepali company."

2. Long Questions (15-25 marks):

   • Case-based questions: You’ll be given a scenario (e.g., "eSewa wants to reduce transaction failures") and asked to:
     • Formulate a research problem.
     • Define objectives.
     • Develop a hypothesis.
     • Choose a research design.
   • Example:

     "A bank in Nepal wants to increase customer retention. Using the research process, explain how you would identify and solve this problem."

3. Practical Questions:

   • Design a research problem for a given scenario.
   • Critique a poorly formulated hypothesis and suggest improvements.

Key Focus Areas for Exams

Marking Scheme Insights

• Clarity: Clearly define terms (e.g., "A hypothesis is a testable statement...").
• Examples: Always use Nepali companies (e.g., Nabil Bank, Daraz, Pathao) to illustrate points.
• Structure: Follow the research process flowchart in your answers.
• Critical Thinking: Examiners look for logical flow (e.g., "If the problem is X, then the objective should be Y...").

Final Tip: Practice writing research problems for given scenarios. For example:

"NTC wants to reduce traffic congestion in Kathmandu. Formulate a research problem and define two objectives."

Visual Summary

mindmap
  root((Research Process & Problem Formulation))
    Steps["1. Identify Problem\n2. Review Literature\n3. Define Objectives\n4. Develop Hypothesis\n5. Choose Design\n6. Collect Data\n7. Analyze\n8. Report")]
    ProblemTypes["Exploratory\nDescriptive\nCausal"]
    Hypothesis["Null (H₀)\nAlternative (H₁)\nSimple\nComplex"]
    RealWorld["eSewa\nPathao\nNabil Bank"]
    ExamFocus["Short Qs: Definitions\nLong Qs: Case Studies\nPractical: Formulate Problems"]