Research Problem | Identification of Research Problem | Determinants of Organizational Performance

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Research Problem | Identification of Research Problem | Determinants of Organizational Performance

Research Problem


The research problem is a gap between the actual and desired state. A problem could simply indicate an interest in an issue where finding the right answers might help to improve an existing situation. Problem definition is a clear and precise statement of the question or issue that is to be investigated for finding an answer or solution.

Problem definition refers to (a) existing business problems where a manager is looking for a solution (b) situation that is not putting any problems at present but the manager thinks that things should be improved (c) areas where some conceptual clarity is needed for better theory building (d) situation for which researcher is trying to answer. 

Some of the examples of research problem are given below:
  • What is/are the effects of training effectiveness on organization performance?
  • What are the components of brand equity?
  • Is the effect of investors’ behavior on investment is moderated by the qualification of employees?

Some definitions of research problems are given below:

According to Sekaran, “Research problem is any situation where a gap exists before and the actual and the desired ideal estate.

According to Kerlinger,A good problem is defined as an interrogative sentence or statement that shows what relations exist between two or more variables.

Generally, research problems are in interrogative sentences and they present the relationship of variables that are unclear.

Identification of Research Problem

Issues that are going to be considered while conducting research is known as research problem. Some research problems are developed from the contradiction in the theory but all problems are not developed from theories and may reflect the local problems. In such a case, the researcher must define the problem carefully to ensure that the right questions are asked and answered. If this stage is not correct then the entire research works will be derailed. If a researcher is able to state the problem precisely and accurately then the researcher can design a strategy to solve the problem. The research problem can be identified in the following ways:

1. The management problem: 

The first step is to make a broad statement as the management sees it. The problem here means the dilemma or uncertainty faced by the management and feel that some research might clarify the issue better. For example:

a. Can we get the gap in the market that we can exploit?
b. How can we increase productivity?

c. Is it better to lay off existing employees and recruit new employees from the labor market?

It should be stated in the question form. The management problem should focus on the decision, It should not focus on the symptoms of the problems. For example, A CEO of a company asked the researcher to conduct research related to advertisement package to restore their sales. As a researcher, you should not rush on the advertisement package but you should think that the problem stems from other causes or the advertisement. The fall down in sales may be cheap import competition, incompetent sales staff, inventory shortage, or any others. If the problems are unclear then you should conduct some preliminary exploratory research using more qualitative techniques like focus group discussion, observation, in-depth interview, etc.

2. The research problem: 

In the next step, management problems are translated into research problems. This also should be in question form. In the above example, the research problem might be what factors are causing a reduction in sales? Why don’t our advertisement package is able to attract new customers? The research problem should be able to give the answer to the management problems. Frequently managers explain the symptoms, not the problem. Reduction in sales is the symptom, not the problem and the researcher must focus on the causes. A research problem for the above management problem may be, does a new advertisement package affect the sales of a product?

3. Research questions: 

The research problems are more specifically developed. The research question breaks to that research problem into a number of researchable questions. The issue of reduction in sales may involve a range of antecedents from low pay to low morale and low motivation. For example; does an increase in pay increase sales? Does the deployment of skilled salesforce increase sales? Using the above sequence, a local problem can be brought into a structure that will allow it to be investigated in a rigorous way. Here is an example of identifying the problem:

Sherpa Jeeps take a small market in Nepal because of its quality and appearance. People know that its quality does not fit Nepalese fine roads but just fits for rough roads. People know about its quality and comfortability.

  • The Management problem: market share
  • The research problem: How can the quality of Sherpa Jeep be improved so as to increase its market share?
  • The research question: Can Sherpa Jeep be sold the design? 
  • Hypothesis: Improve in design is positively related to the sale of Sherpa Jeep.

Examples of developing research question in academic research are given below:

Determinant€ of Organizational Performance

There are two areas of focus within the research stream of the business policy literature on organizational performance. An economic perspective emphasizes the importance of external market factors such as the firm’s competitive position. The organizational perspective builds on behavioral and sociological paradigms and their fit with the environment. Andrews’s (1971) representative framework of strategy suggests that both organizational and economic factors are determinants of firm performance (Montgomery 1994). The structure of SWOT analysis (e.g. Learned et al, 1969) defines strengths and weaknesses that presage a resource-based perspective where opportunities and threats represent industry and competitor influence. These constructs have helped to frame the researchers’ theoretical development of an organizational performance model and its determinant factors.

Most strategy research deals with intra firm performance differences as examined through organizational or environmental variables. These account for the strategic differential that produces performance consequences (Bamett and Burgelman, 1996: Schendel, 1996). Thus, the search for competitive advantage, as produced by these strategic differentials, is a central tenet of the theoretical perspectives that define the creation of supernormal profits from such competitive advantage (Hambrick, 1983; White, 1986). This research seeks to create a performance model based on the overarching core constructs that define these determinant variables. In this manner, the research can facilitate the articulation of a theoretical rationale for performance enhancement strategies.
Moreover, these variables appear to be synergistic in their aggregate effect on total firm performance. A review of a firm’s existing organizational alignments will identify the synergistic potential for combining certain value activities. The importance of managing organizational boundaries is referred to as “achieving interrelations” where the value chain emphasizes synergy and integration as a source of competitive advantage (Porter, 1985) This bundle of values is composed of performance factors or effects that enable an organization to offer a product or service more effectively or efficiently than competitors (Carroll, 1989).

Previous research has categorized determinants as either organizational or economic in nature and has shown these two effects are independent, with organizational factors explaining twice as much variance in profit rates (Hansen and Wernerfelt, 1989). This study will review the strategic management research stream to discover underlying constructs that frame a performance model of organizational and economic determinants. Such an integrated perspective on strategic management must have as its foundation the interconnectedness of an organization’s ecosystem (Hart, 1995; Moore, ‘1996). All determinants of firm performance should work in harmony with each other to create total economic value. It is this interaction and balance of internal systems in conjunction with the bio-system of the external environment that represents a dynamic model of firm performance. In Michael Porter’s view, this phenomenon will dictate that tomorrow’s global players look more and more like Disney. A diversified conglomerate that successfully uses the synergies of a disparate portfolio through the cross-marketing of their environment, sports, and theme park divisions (McGurn, 1996).

Global market opportunities and nations’ interactions are being driven by rising consumer demand, The effect of recent free-trade agreements changes the dimensions or scope of the external environment through increased access to world markets. These emerging world markets create a demand for technology that SU Pports a rising standard of living. The challenge to strategic management in such an interdependent and interconnected world is in finding ways of adding value, increasing productivity, and driving cost reductions across the entire arrange of an organization’s activities. 

The purpose of this work is to develop an integrative. an analytical and dynamic model of firm performance that is holistic and synergistic. Schendel (1996) states that the strategic management field has a number of theoretical rationales for explaining performance differences, including; market power from an industrial organization economics perspective; the resource-based perspective; the power perspective within an organizational network transaction cost economics, and game theory explanations. The research questions:

The aims of the research are embodied in the following six questions:

  1. Is there a commonality of factors suggested by the research stream to explain performance variance?
  2. What is the economic contribution to a firm’s profitability of these common factors?
  3. Do these factors describe organizational and economic determinants of firm performance?
  4. What are the appropriate economic rates of return to use as proxies for these determinant factors?
  5. Would an analysis of firm actions that are linked with consistent recordings of substantial economic value over a longitudinal time period present a dynamic model for the partitioning of performance contribution between these determinant factors?
  6. What relationships can we infer from the empirical analysis of the economic rates of return seen as proxies for these determinant factors?

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