RESEARCH METHODS FOR BUSINESS AND MANAGEMENT

6. OBSERVATIONS STUDIES

6.1. The Uses of Observation

Much of what we know comes from observation. We notice co-workers'

reactions to political intrigue, the sounds of the assembly area, the smell of
perfume, the taste of office coffee, the smoothness of the vice president's
marble desk, and a host of other stimuli. While such observation may be a basis
for knowledge, the collection processes are often haphazard.

Observation qualifies as scientific inquiry when it is conducted specifically to

answer a research question, is systematically planned and executed, uses
proper controls, and provides a reliable and valid account of what happened.
The versatility of observation makes it an indispensable primary source method
and a supplement for other methods. Exhibit 8-1 depicts the use of observation
in the research process, while Exhibit 8-2 describes the conditions under which
observation is an appropriate method for data collection. It also contrasts those
conditions with ones from the communication modes.

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Besides collecting data visually, observation involves listening, reading ,
smelling, and touching. As used in this text, observation includes the full range
of monitoring behavioural and non-behavioural activities and conditions, which,
as shown in Exhibit 8-3, can be classified roughly as follows:

Non-behavioural Observation
 Record analysis
 Physical condition analysis
 Physical process analysis

Behavioural Observation
 Nonverbal analysis
 Linguistic analysis
 Extra-linguistic analysis
 Spatial analysis

a) Non-behavioural Observation
A prevalent form of observation research is record analysis. This may involve
historical or current records and public or private records. They may be written,
printed, sound-recorded, photographed, or videotaped.

Physical condition analysis is typified by store audits of merchandise

availability, studies of plant safety compliance, analysis of inventory conditions,
and analysis of financial statements. Process or activity analysis includes
time/motion studies of manufacturing processes and analysis of traffic flows in a
distribution system, paperwork flows in an office, and financial flows in the
banking system.

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b) Behavioural Observation
The observational study of persons can be classified into four major categories.
Non-verbal behaviour is the most prevalent of these and includes body
movement, motor expressions, and even exchange of glances. At the level of
gross body movement, one might study how sales person travels a territory. At a
fine level, one can study the body movements of a worker assembling a product
or time-sample the activity of a department's workforce to discover the share of
time each worker spends in various ways, More abstractly, one can study body
movement as an indicator of interest or boredom, anger or pleasure in a certain
environment. Motor expressions such as facial movements can be observed as
a sign of emotional states.

Linguistic behaviour is a second frequently used form of behaviour

observation. One simple type familiar to most students is the tally of "ahs" or
other annoying sounds or words a professor makes, or uses during a class.

Sometime extra-linguistic behaviour is as important a means of

communication as linguistic behaviour. There are four dimensions of extra-
linguistic activity. They are (1) vocal, including pitch, loudness, and timbre:
(2) temporal, including the rate of speaking, duration of utterance, and rhythm:
(3) interaction, including the tendencies to interrupt, dominate, or inhibit; and
(4) verbal stylistic, including vocabulary and pronunciation peculiarities, dialect,
and characteristic expressions.

A fourth type of behaviour study involves spatial relationships, especially how

a person relates physically to others. One form of this study, proxemics
concerns how people organize· the territory about them and how they maintain
discrete distances between themselves and others.

6.2. Evaluation of the Observation Method

Advantages
 Observation is the only method available to gather certain types of
information. The study of records, mechanical processes, and young
children, as well as other inarticulate participants, falls into this category.
 Observation aids in collection of original data at the time they occur.
 Though observation one can secure information that most participants would
ignore either because it is so common and expected or because it is not
seen as relevant.
 Observation it alone can capture the whole event as it occurs in its natural
environment. Whereas the environment of an experiment may seem
contrived to participants, and the number and types of questions limit the
range of responses gathered from respondents, observation is less
restrictive than most primary collection methods.
 Participants seem to accept an observational intrusion better than they
respond to questioning. Observation is less demanding of them and normally
has a less biasing effect on their behaviour than does questioning.

Disadvantage
The observation method has some research limitations.

 The observer normally must be at the scene of the event when it lakes place,
yet it is often impossible to predict where and when the event will occur.

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 Observation is a slow and expensive process that requires either human
observers or costly surveillance equipment.
 A third limitation of observation is that most reliable results of observation are
restricted to information that can be learned by overt action or surface
indicators.
 The research environment is more likely suited to subjective assessment and
recording of data than to controls and quantification of events.
 Observation is limited as a way to learn about the past. It is similarly limited
as a method by which to learn what is going on in the present at some
distant place.

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6.3. The Observer-Participant Relationship

The relationship between observer and participant may be viewed from three
perspectives:

 Whether the observation is direct or indirect.

 Whether the observer's presence is known or unknown to the participant.
 What role the observer plays.

a) Directness of Observation

Direct observation occurs when the observer is physically present and

personally monitors what takes place. This approach is very flexible because it
allows the observer to react to and report subtle aspects of events and
behaviors as they occur.
 A weakness of this approach is that observers' perception circuits may
become overloaded as events move quickly, and observers must later try to

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 reconstruct what they were not able to record.
 Also, observer fatigue, boredom, and distracting events can reduce the
accuracy and completeness of observation.

Indirect observation occurs when the recording is done by mechanical,

photographic, or electronic means.

 Indirect observation is less flexible than direct observation but is also much
less biasing and may be less erratic in accuracy.
 Another advantage of indirect observation is that the permanent record can
be reanalyzed to include many different aspects of the event.

b) Concealment

 Observers use concealment to shield themselves from the object of their

observation.
 These methods reduce the risk of observer bias but bring up a question of
ethics.
 A modified approach involves partial concealment. The presence of the
observer is not concealed, but the objectives and participant of interest are.

c) Participation

A more involved arrangement, participant observation, exists when the

observer enters the social setting and acts as both an observer and a
participant. Sometimes he or she is known as an observer to some or all of the
participants: at other times the true role is concealed. While reducing the
potential for bias, this again raises an ethical issue. Often participants will not
have given their consent and will not have knowledge of or access to the
findings.

Participant observation makes a dual demand on the observer. Recording can

interfere with participation, and participation can interfere with observation.
Because of these problems, participant observation is used less in business

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research than, say, in anthropology or sociology.

6.4. Factors to Consider When Conducting an Observation Study

a) The Type of Study

 Observation is found in almost all research studies, at least at the
exploratory stage. Such data collection is known as simple observation.
 If the study is to be something other than exploratory, systematic
observation employs standardized procedures, trained observers,
schedules for recording, and other devices for the observer that mirror the
scientific procedures of other primary data methods.
 Observation studies can be classified by the degree of structure in the
environmental setting and the amount of structure imposed on the
environment by the researcher, as reflected in Exhibit 8-4.
 Structured observation requires the use of observation checklist, which is
analogous to a questionnaire.
 Exhibit 8.5 shows the parallels between survey design and checklist
development. Checklists should possess a high degree of precision in
defining relevant behaviour or acts and have mutually exclusive and
exhaustive categories. The coding is frequently closed, thereby simplifying
data analysis.

b) Content Specification
 Specific conditions, events, or activities that we want to observe determine
the observational reporting system (and correspond to measurement
questions).
 To specify the observation content, we should include both the major
variables of interest and any other variables that may affect them.
 Observation may be at either a factual or an inferential level. Exhibit 8-6
shows how we could separate the factual and inferential components of a
salesperson's presentation.

c) Observer Training
There are a few general guidelines for the qualification and selection of
observers:

 Concentration: Ability to function in a setting full of distractions.

 Detail-oriented: Ability to remember details of an experience.
 Unobtrusive: Ability to blend with the setting and not be distinctive.
 Experience level: Ability to extract the most from an observation study.

d) Data Collection
The data collection plan specifies the details of the task. In essence it answers
the questions who, what, when, how, and where.

Designing the Observation Study

1. Refer to Donald R. Cooper and Pamela S. Schindler (2011). Business research

methods. McGraw-Hill International Edition, Eleventh Edition, Pages 201–202.