Upon completion of this chapter, you will be able to: Understand the scale of measurement and four levels of data measurement Understand the criteria for good measurement Learn about the various established measurement scales used in business research Understand the factors to be considered in selecting the appropriate measurement scales
Business Research Methods, 2e Author: Naval Bajpai
• Griff Mitchell is the vice president of customer relationship management (CRM) for one of the world’s largest suppliers of industrial heavy equipment. In this role, he oversees all sales and service operations.
• This year, for the first time, the company has decided to perform a CRM employee evaluation process that will allow an overall ranking of all CRM employees. • Griff knows this will be a difficult task for many reasons, not the least of which is that he oversees over a thousand employees worldwide. • The ranking will be used to single out the best performers. These employees will be recognized at the company’s annual CRM conference. • The rankings will also be used to identify the lowest 20 percent of performers. These employees will be put on a probationary list with specific targeted improvement goals that will have to be met within 12 months or they will be fired. • Griff is becoming really stressed out trying to define the performance ranking process
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Business Research Methods, 2e Author: Naval Bajpai Naval Bajpai • Griff’s key question is, “What is performance?” Although these employees are now often referred to as CRM employees, they have
• “What should be measured” is a complex task to be performed. • Measurement objects can be tangible such as the number of people or consumers, or psychological such as attitude or perception measurement • A researcher attempts to measure either physical or psychological properties of a phenomenon
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Business Research Methods, 2e Author: Naval Bajpai Naval Bajpai What Should be Measured? • The measurement of physical properties is not a complex deal,
whereas measurement of psychological properties requires a careful attention of a researcher. • For example, consider a business researcher willing to address a research question “What motivates a consumer to buy a luxury car.” • In this case, a researcher has to focus on unfolding the underlying motives of a consumer • Therefore, a researcher has to broadly quantify the research focus on “consumer motivation” to address the above • The quality of the research always depends on the fact that what measurement techniques are adopted by the researcher and how these fit in the prevailing research circumstances. Business Research Methods, 2e Author: Naval Bajpai Consumer motivation to buy luxury cars • [1] Not strongly motivated How motivated • [2] Not motivated are you to buy
• [3] Neutral luxury car? • [4] Motivated • [5] Strongly motivated • Mercedes__ Give ranks from 1 to 5, for your • Range Rover__ motivation to buy • Roll-Royce__ luxury cars of these • Bentley__ brands: • BMW__ Will you be buying luxurious car from • Yes Mercedes? • NO
• numbers convey different meanings that are always case specific. • there is a need to understand the concept of scale of measurement to use an appropriate statistical tool and technique, based on different scales of measurement.
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Business Research Methods, 2e Author: Naval Bajpai Naval Bajpai Scales of Measurement
• A Nominal Scale is a measurement scale, in which numbers serve as “tags” or “labels” only, to identify or classify an object • Nominal scale possesses only the description characteristic which means it possesses unique labels to identify or delegate values to the items • For example, numbers are written on cars in a racing track. The numbers are there merely to identify the driver associated with the car, it has nothing to do with characteristics of the car.
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Business Research Methods, 2e Author: Naval Bajpai Naval Bajpai Characteristics of Nominal Scale • 1) In nominal scale a variable is divided into two or more categories, for example, agree/disagree, yes or no etc. It’s is a
measurement mechanism in which answer to a particular question can fall into either category. • 2) Nominal scale is qualitative in nature, which means numbers are used here only to categorize or identify objects. • For example, football fans will be really excited, as the football world cup is around the corner! Have you noticed numbers on a jersey of a football player? These numbers have nothing to do with the ability of players, however, they can help identify the player.
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Business Research Methods, 2e Author: Naval Bajpai Naval Bajpai Characteristics of Nominal Scale
• In nominal scale, numbers don’t define the characteristics related to the object, which means each number is assigned to one object. • The only permissible aspect related to numbers in a nominal scale is “counting • Examples • Employee identification numbers, • contributory provident fund numbers, • personal identification number
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Business Research Methods, 2e Author: Naval Bajpai Naval Bajpai Scales of Measurement Nominal Scale: When data are labels or names used to identify the attribute of an
element, the nominal scale is used. • For example, assume that a marketing research company wants to conduct a survey in three towns of India: Bhopal, Nagpur, and Baroda. While compiling the data, the company assigns the Numeric Code “1” to Bhopal, “2” to Nagpur, and “3” to Baroda. • In this case, 1, 2, and 3 are the labels used to identify the three different towns. Bhopal = 1 Nagpur = 2 Baroda = 3 • Data show the numeric value, but the scale of measurement is nominal
Business Research Methods, 2e Author: Naval Bajpai
• Reports the ranking and ordering of the data without actually establishing the degree of variation between them. Ordinal level of measurement is the second of the four measurement scales. • “Ordinal” indicates “order”. Ordinal data is quantitative data which have naturally occurring orders and the difference between is unknown. • It can be named, grouped and also ranked. • Likert Scaleis an example of why the interval difference between ordinal variables cannot be concluded. In this scale the answer options usually polar such as, “Totally satisfied” to “Totally dissatisfied”
• The properties of the interval are not known. • Measurement of non-numeric attributes such as frequency, satisfaction, happiness etc. • In addition to the information provided by nominal scale ordinal scale identifies the rank of variables. • Using this scale, survey makers can analyze the degree of agreement among respondents with respect to the identified order of the variables.
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Business Research Methods, 2e Author: Naval Bajpai Naval Bajpai Ordinal Scale Examples • Ranking of high school students – 1st, 3rd, 4th, 10th… Nth. A student scoring 99/100 would be the 1st rank, another student scoring
Business Research Methods, 2e Author: Naval Bajpai Naval Bajpai Interval scale • The interval scale is a quantitative measurement scale where there is order, the difference between the two variables is meaningful
and equal, and the presence of zero is arbitrary. • It measures variables that exist along a common scale at equal intervals. The measures used to calculate the distance between the variables are highly reliable • It is easy to remember the objective of this scale because “interval” refers to the interval (or distance) between two variables • With the interval scale is that the data between two variables can be added or subtracted, but not multiplied or divided.
Business Research Methods, 2e Author: Naval Bajpai Naval Bajpai Ratio scale • Ratio scale allows any researcher to compare the intervals or differences.
• Ratio scale is the 4th level of measurement and possesses a zero point or character of origin. • A ratio scale is the most informative scale as it tends to tell about the order and number of the object between the values of the scale. The most common examples of ratio scale are height, money, age, weight etc
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Business Research Methods, 2e Author: Naval Bajpai Naval Bajpai Scales of Measurement
Ratio Scale: Ratio level measurements possess all the properties of
interval data with meaningful ratio of two values. Must contain ZERO value. e.g. Price • For example, a company markets two toothbrushes priced Rs 30 and Rs 15, respectively. • In the ratio scale, the difference between the two prices, that is, Rs 30 − Rs 15 = Rs 15, can be calculated and is meaningful. • With it, we can also say that the price of the first product, Rs 30, is two times that of the second product • The interval and ratio level data are collected using some precise instruments. • These data are called metric data and are sometimes referred as quantitative data Business Research Methods, 2e Author: Naval Bajpai Characteristics of Ratio Scale • Ratio scale, as mentioned earlier has an absolute zero characteristic. It has orders and equally distanced value between
units. • The zero point characteristic makes it relevant or meaningful to say, “one object has twice the length of the other” or “is twice as long.” • Ratio scale doesn’t have a negative number, unlike interval scale because of the absolute zero or zero point characteristic. • To measure any object on a ratio scale, researchers must first see if the object meets all the criteria for interval scale plus has an absolute zero characteristic
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Business Research Methods, 2e Author: Naval Bajpai Naval Bajpai • Ratio scale provides unique possibilities for statistical analysis. • In ratio scale, variables can be systematically added, subtracted,
multiplied and divided (ratio). • All statistical analysis including mean, mode, the median can be calculated using ratio scale. • Also, chi-square can be calculated on ratio scale variable. • Ratio scale has ratio scale units which have several unique and useful properties. • One of them is they allow unit conversion. Take an example of calculation of energy flow. Several units of energy occur like Joules, gram-calories, kilogram-calories, British thermal units. • Still more units of energy per unit time (power) exist kilocalories per day, liters of oxygen per hour, ergs, and Watts Business Research Methods Business Research Methods, 2e Author: Naval Bajpai Naval Bajpai FOUR LEVELS OF DATA MEASUREMENT
• Nominal data have the most limited use in terms of the use of analytical and statistical tools and techniques. • When compared with the nominal data, the ordinal data allows a researcher to use statistical tools and techniques with some additional features • In terms of using the data level, statistical tools and techniques can be divided into two categories: parametric statistics and non-parametric statistics • In parametric statistics, the information about the distribution of the population is known and is based on a fixed set of parameters. • In nonparametric statistics, the information about the distribution of a population is unknown, and the parameters are not fixed, which makes is necessary to test the hypothesis for the population
Business Research Methods, 2e Author: Naval Bajpai Naval Bajpai Figure 3.1: A comparison between the four levels of data measurement in terms of usage potential (capacity) In terms of measurement capacity, nominal, ordinal, interval, and ratio level data are placed in ascending order.
• The extent to which the results can be reproduced when the research is repeated under the same conditions • How is it assessed? • By checking the consistency of results across time, across different observers, and across parts of the test itself. • How do they relate? • A reliable measurement is not always valid: the results might be reproducible, but they’re not necessarily correct.
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Business Research Methods, 2e Author: Naval Bajpai Naval Bajpai • Reliability refers to how consistently a method measures something. If the same result can be consistently achieved by
using the same methods under the same circumstances, the measurement is considered reliable.
• Eg. You measure the temperature of a liquid sample several times
under identical conditions. The thermometer displays the same temperature every time, so the results are reliable.
• Eg.A doctor uses a symptom questionnaire to diagnose a patient
with a long-term medical condition. Several different doctors use the same questionnaire with the same patient but give different diagnoses. This indicates that the questionnaire has low reliability as a measure of the condition Business Research Methods Business Research Methods, 2e Author: Naval Bajpai Naval Bajpai validity
• What does it tell you : • The extent to which the results really measure what they are supposed to measure. • How is it assessed : • By checking how well the results correspond to established theories and other measures of the same concept. • How do they relate? : • A valid measurement is generally reliable: if a test produces accurate results, they should be reproducible.
(B) Customer Relationship Management Objective: To Facilitates The Students To Understand The Process of CRM, Implementation of CRM Strategies and Customisation of Services Unit I