The Background To The Business Problems Commerce Essay

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A major problem confronting business is how to increase productivity, provide higher levels of service and responsiveness, and at the same time reduce costs (Carr and Johansson, 1995). Companies are increasingly coming to realize that traditional organizational structures, customer service philosophies, and business methods are no longer competitive (Carr and Johansson, 1995).

As organizations strive to be more competitive in today's challenging business environment, more of them are looking at the key business processes and systems as a means of gaining competitive advantage (Dutta and Manzoni, 1999).

Hammer and Stanton (1995) argues that business enterprise is only as effective as its processes and business goals can be achieved only through development of logical business processes. There are many advantages of developing and improving business processes such as reduced time, better performance, decreased red tape and so on which result in increasing effectiveness and efficiency (Hammer and Champy, 1993)

Companies that practice improvement of business processes are able to consistently improve the results obtained from existing processes (Harmon, 2003). Moreover, companies that undertake more extensive business process redesign can achieve results in excess of 20%. (Harmon, 2003)

Organizations in Uzbekistan and Kazakhstan also have to deal with business specifics of the market. Certain circumstances don't allow business to operate in the way it is desired. There are different factors influence it such as registering property, getting credit, paying taxes, enforcing contracts, protecting investors etc. Some processes are not effective due to these factors.

In Reengineering the Corporation, the driving forces behind reengineering were characterized as the three Cs: customers, competition, and change. According to Hammer and Stanton (1995), "Customers have become much more sophisticated and demanding; they have a much greater range of alternatives, are much more knowledgeable about their own needs, and are exerting ever greater pressure on their suppliers. Competition, which at one time was local and relatively gentle, has become global and cutthroat".

In addition to 3Cs, Professor Rosabeth Moss Kanter of Harvard Business School has reasoned that a successful 21st century company needs to have the 5F's - Fast, Focused, Flexible, Friendly and Fun (

Since the quantity of BPR failures was high, Business Process Management (BPM) came in (Harmon, 2003). BPM includes the measurement and ongoing improvement of business processes. Harmon (2003) argues that existing processes can be significantly improved by installing or improving the management system used with the process.

Project Aims and Objectives

No research was done in the field of business process practices in region of Uzbekistan

Determine key business processes in service industry

Evaluate the factors that make business processes important in service organizations

To identify the extent of business processes practices in the organizations of Uzbekistan.

Evaluate the drivers causing Uzbekistan financial service organizations to focus on business processes

Determine the conditions under which change in business process is necessary.

Create framework for the implementation business improvement tools in chaotic business environment (Create a model to analyze the organization and identify the level of transformation necessary that better suits the organizational needs).

Examine possible business improvement tools to be implemented in Uzbekistan?


The purpose of this study is to show the importance and benefits of business processes and increase effectiveness and efficiency of commercial enterprises in developing countries such as Uzbekistan, where the field of Business Process Management is not well known, through recommendations on Business Improvement tools.


What is Business Process?

The success of any organization depends on the performance of each element of organization (Jones, 1994):

Its product and services, i.e. its deliverables

Its business processes and supportive services

Its people, i.e. its employees and suppliers

Processes are the essential link between the customer's requirements and the delivery of products or services.

Terminology from information systems, manufacturing, as well as organization and strategy studies are often mixed. It also can be seen that operational definitions of processes are most common with definitions of Johansson, Davenport, Hammer taking organizational aspects of processes into account:

A process is a set of linked activities that takes an input and transforms it to create an output. It should add value to the input and create an output that is more useful and effective to the recipient. (Johansson et. al. 1993)

BP is a structured, measured set of activities designed to produce a specified output for a particular customer or market: a structure for action. (Davenport, 1993)

Activities that take one or more kinds of input and create an output that is of value to the customer. (Hammer, 1993)

Definitions support well the operational perspective of redesign. On the organizational level there is some support, while strategic subjects seem to been ignored. The conclusion is that focus is on operations, while it can be maintained that BPR should start from strategies (Tinilla, 1995).

In contrast to functional definitions, process perspective is clearly focusing on the tasks and activities done in an organization. The emphasis is on how work is done, rather than the functional emphasis on what is done in an organizational unit as Davenport (1993) has observed:

Business process is a specific ordering of work activities across time and place, it has a beginning, an end, and clearly identified inputs and outputs.(Davenport, 1993)

According to Jones (1994), traditionally managers have seen processes as means of achieving their department's objectives that are internally focused:

The processing of a given number of orders;

The achievement of a certain volume of production;

The raising the required number of invoices.

Now more emphasis is being placed externally focused objectives:

The fulfillment of specific customer requirements;

The achievement of high and improving levels of customer satisfaction;

Adapting the organization to the needs of a changing market and business environment.

Key business processes are logically grouped related tasks, independent of the organizational structure, which utilize the resources of the organization to produce specific results (Jones, 1994).

The management and improving of these key business processes provides significant opportunities for improving business performance.

Besides processes, redesign of business processes has also generated many definitions with several different terms used interchangeably.

Business Process Change

Business Processes and Strategy

Harmon P. (2003) believes that the best way to understand and improve organization is by starting a clear understanding of the organization's business processes. Business processes are fundamental to an organization's success in producing its goods and services (Harmon, 2008). In order to maximize competitiveness for an organization it needs to have processes which are both well designed and which work effectively.

The general background to any review of business processes is lying in Porter's value chain model - see Figure 1.

The value chain model shows the way in which various activities of any organization work together to add value to the customer. The process perspective on management involves understanding business in terms of their individual processes.

Figure 1.


Slack et al (2006) defines business processes as an arrangement of resources that transforms inputs into outputs that satisfy (internal and external) customer needs.

This definition with reference to satisfying internal and external customer needs helps to underline the common ground between business processes and business strategy of an organization (Thomas, 2008). Both seek to deliver the value for the customer. Business strategy is concerned with the allocation of resources in order to develop financial and strategic performance. The underlying logic behind this is that financial and strategic performance will be achieved by delivering value to the customer. And this value delivery will be achieved through business processes (Thomas, 2008).

The value of business process perspective

Process perspective contributes to the organizational performance in four ways (Thomas, 2008):

Cost Control - keeping costs under control by ensuring process efficiency.

Revenue - enhancing a business's ability to generate revenue through the quality of the products and services it produces.

Investment - maximizing the return on investments by ensuring that they operate as they are intended to.

Capabilities - embedding the capabilities that will form the basis of the business's ongoing future competitiveness.

Process-oriented organizations also break down the barriers of structural departments and try to avoid functional 'silos' (when each department concentrating on its own function rather that understanding how it contributes to overall value creation in an organization) (Thomas, 2008).

The strategic value of the process perspective comes not only from analysis of current processes but also identifying the areas where they can be improved (Harmon, 2003). The result of well designed business process is increased effectiveness (value of the customer) and increased efficiency (lower costs for the business).

Process improvement is often considered as being synonymous with automation (Thomas, 2008). But this is not necessarily the case. Even if they are outcomes of process improvement, they should not ultimately be the reasons for it.

Organizational Maturity

The concept of Process Maturity levels was developed at the Software Engineering Institute (SEI). The Capability Maturity Model Integrated (CMMI) has been generalized so that it can be applied to any of a wide variety of processes in diverse organizations (Harmon, 2003).

The key assumption that CMMI is that immature organizations don't perform consistently; mature organizations, by contrast, produce quality products and services effectively and consistently (Harmon, 2003).

The main point of CMMI as a reference model is to help organizations understand their current process capabilities, in order to make a plan for development (Harmon, 2003). But it doesn't prescribe how to get there.

Source: Harmon (2003), Business Process Change, BPTrends

What is BPR?

The literature describes the core emphasis of BPR in different ways:

"The fundamental rethinking and radical redesign of business processes to bring about dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed." Hammer and Stanton (1995)

"The analysis and redesign of business and manufacturing processes to eliminate that which adds no value." Parker (1993)

"A radically new process of organizational change that many companies are using to renew their commitment to customer service." Janson (1992-93)

Dutta and Manzoni (1999) said that there are some common aspects can be identified across these performance improvement efforts. First, there is a shared emphasis on rethinking different aspects of the existing business behaviors:

It isn't about fixing anything, it means starting all over, starting from scratch. (Hammer and Champy, 1993)

Secondly, much of the motivation for this rethinking seems to arise from observation that many current work practices are outdated and no longer suited to today's competitive situation or matched to the capabilities offered by current technology (Dutta and Manzoni, 1999):

The problem appears to be … developed systems of production that were remarkably successful in their time but are no longer suited to a changed world. (Keith, 1993)

Emphasis of BPR is on processes. According to Dutta and Manzoni (1999), the assumption is that a business can be defined as a set of interrelated 'processes' that are logically and continuously evolving to satisfy a set of common customer oriented objectives. From this point of view, a process can be defined as:

… a sequence of activities that fulfills the needs of an internal or external customer. (Harrison and Pratt, 1993)

… a collection of activities that takes one or more kinds of input and creates an output that is f value to customer. (Hammer and Champy, 1993)

In fact, today's performance improvement programs such as BPR, TQM, Material Resource Planning (MRP), Just-in-time (JIT) system, are themselves becoming a process; performance improvement is no longer looking at as a project only, but increasingly as an ongoing effort of analyzing and radically redefining the key business processes of a company with the ultimate goal of achieving and sustaining significant performance gains (Shin and Jemella, 2002).

Continuous Improvement versus Radical Improvement

The main area of debate is whether BPR is concerned with radical change only or focus on continuous incremental change such as TQM (Peppard and Rowland, 1995). Peppard and Rowland (1995) argue that continuous incremental improvement based on small changes throughout organizations can bring high increase in performance. For instance, companies such as Toyota and Nissan have shown that this approach is often more effective than the radical change approach that many western companies followed, often at large costs and with little success). So great improvement may be achieved by small changes being made to the processes, but a lot of them which in sum become significant (Peppard and Rowland, 1995).

Vankatraman (1994) introduced his framework concerning the disputes between two approaches. It claims that relationship between benefits obtainable by applying ICT and the extent of redesign or organizational change required (Vankatraman, 1994). As we can see on the Figure 1., within two axes five typical models, one of which is BPR. However, on this graph BPR is not considered as "from scratch" approach to organizational redesign. In fact, it represents a kind of middle level of transformation, with two different approaches offering more radical change and increased efficiency gain potential, and two more models offering less radical change, mainly relying on the automation of existing routines with limited efficiency gain potential (Vankatraman, 1994).

Figure 1. Business Transformation framework.

Peppard & Rowland (1995) stressed the importance of understanding current work processes and identified the two broad approaches of BPR as follows:

Systematic Redesign - identifies and understands existing processes and then work through them systematically to create new processes to deliver the desired outcomes.

Clean Sheet approach - fundamentally rethink the way that product or service is delivered and design new processes from scratch.

Vankatraman (1994) was arguing that emerging business environment calls for a strategy based on three intertwined elements: low cost, high quality, and fast and flexible response to customer needs. Important notice is that no one element is sufficient for competitive success. Also it says that benefits form IT deployment are marginal if only superimposed on existing organizational conditions (especially strategies, structures, processes, and culture)

BPM as a new fad

In spite of the opportunities offered by BPR, most of the reengineering projects fail to achieve them (Peppard and Rowland, 2005).

Instead of concentrating on the reasons for BPR failure, Racca (2003) emphasized on strengths of BPM comparing with BPR:

BPM makes continuous improvement cycles affordable and painless where BPR made them lengthy and painful.

BPM hides process change from the human participant, greatly reducing the resistance that they offered when being trained in new processes.

BPM helps avoid the natural political struggles that were due to explicit reorganization necessary for BPR to work.

BPM leverages the most popular metaphor among computer users -email- to manage process change, avoiding the lengthy and costly work-habit changes that were typical in BPR.

The latest fad in evolution of performance improvement methodologies is Business Process Management (BPM). BPM is a structured approach to analyze and continually improve fundamental activities such as manufacturing, marketing, communication and other major elements of a company's operation (Zairi, 1997).

Zairi (1997) said that essentially, BPM is concerned with the main aspects of business operations where there is high leverage and a big proportion of added value. BPM has to be governed by the following rules (Zairi, 1997):

Major activities have to be properly mapped and documented.

BPM creates a focus on customers through horizontal linkages between key activities.

BPM relies on systems and documented procedures to ensure discipline, consistency and repeatability of quality performance.

BPM relies on measurement activity to assess the performance of each individual process, set targets and deliver output levels which can meet corporate objectives.

BPM has to be based on a continuous approach of optimization through problem solving and reaping out extra benefits.

BPM has to be inspired by best practice to ensure that superior competitiveness is achieved.

BPM is an approach for culture change and does not result simply through having good systems and the right structure in place.

Jeston and Nelis (2006) argue that BPM tools have taken the advantage of the BPR experience and conceptually are more flexible in terms of expanse and intensity. Unlike BPR which targets end-to-end process by radically redesigning it, BPM tools can be applied part by part to the whole enterprise at a time, by adopting much more manageable and smaller changes in the process (Jeston and Nelis, 2006). This way the investments, risks and amount of change are minimized but at the same time the tangible impact is much more modest than what was a possibility with BPR (Harmon, 2003). Yet BPM tools for automating processes have their basis on the fundamental concepts that were emphasized by BPR (Alonso et al., 2007), such as:

Simple processes delivering on the metrics of quality, service, flexibility

Focus on eliminating non-value adding activities

Decisions becoming integral part of the process

Smith and Finger (2003) argues to achieve a fundamental shift from process reengineering to ongoing process management, companies are beginning to understand the value of the Business Process Management systems.

We can see the difference between BPR and BPM on the table below:

Table 1.1 Comparison of BPR and Third Wave BPM

Factors Compared

Process Reengineering

Third Wave BPM

Level of change


Total lifecycle

Interpretation of "As is" and "To be"

Old process, Brand new process - Discontinuity

No BPM Capability, BPM capability

Starting point

Clean state

New or existing processes

Frequency of change

Periodic one-time change

One-time, periodic, continuous or evolutionary

Time required


Real time


Disruptive, Big Bang Conversation




Top-down and bottom-up

Number of processes

One major process at a time

Simultaneous, across many processes

Source: Smith and Finger, The Third Wave-Business Processes: Form Reengineering to Management, 2003

Recent survey conducted by BPTrends shows that BPM is very popular among companies in different industries. 75% of all companies that participate in the survey are working on improving existing business processes (Palmer, 2010).

Overall, the major conclusion of this survey is that both the use of BPMS software and business process improvement initiatives in general are yielding favorable results for most users. The area remains relatively immature. Only a handful of firms are able to realize consistent, repeatable results (Palmer, 2010).

Service Industry

According to Drew (1996) focus on business processes is getting more and more popular in service industry, especially, for financial industry. Deregulation and competition are transforming financial markets and make companies continually reinvent their product and services (Drew, 1996). Now more than ever, organizations are under the pressure to balance customer responsiveness, operational efficiency and flexibility (Dutta and Manzoni, 1999).

Services lie at the very hub of economic activity in any country (Fitzsimmons, J. and Fitzsimmons, M., 1998). Dorothy Riddle (1986) formulated the economic model. This model shows the flow of activity among the three principal sectors of the economy: extractive (mining and farming), manufacturing, and service, which is divided into five subgroups but all activities lead to the consumer:

Business Services. Consulting, finance, banking

Trade Services. Retailing, maintenance, repair

Infrastructure services. Communications, transportation

Social/personal services. Restaurants, health care

Public administration. Education, government

In an industrialized economy, specialized firms can supply business services to manufacturing firms more cheaply and efficiently than manufacturing firms can supply these services for themselves (Fitzsimmons, J. and Fitzsimmons, M., 1998).

Therefore, it is imperative to recognize that services are not peripheral activities but rather integral parts of economy. They are central to a functioning and healthy economy and lie at the heart of that economy. Services are the crucial force for today's change toward a global economy. (Fitzsimmons, J. and Fitzsimmons, M., 2004).

Due to significantly reduced demand, growth rate, organizations put large emphasis on cost cutting and customer (Osenton, 2004). Therefore, managers of service companies need to understand new competitive dimensions such as economies of scale, economies of scope, complexity, boundary crossing, and competitiveness, to take advantage of opportunities to improve service quality and performance (Fitzsimmons, J. and Fitzsimmons, M., 1998). By doing so, organization creates barriers to the entry of foreign and domestic competitors. Competing on the traditional dimensions of quality, price, and availability will always be important, but taking into consideration these dimensions based on the use of Information Technologies, which are the source of the value added by service firms (Fitzsimmons, J. and Fitzsimmons, M., 2004).

Service classification

According to Fitzsimmons, J. and Fitzsimmons, M. (1998) there are four quadrants of the service process matrix have been given names, as defined by the two dimensions, to describe the nature of the services illustrated:

Service factories provide a standardized service with high capital investment, much like a line-flow manufacturing plant.

Service shops permit more service customization, but they do so in a high-capital environment.

Customers of a mass service will receive an undifferentiated service in a labor-intensive environment.

Customers of a professional service will be given individual attention by highly trained specialists.

Fitzsimmons, J. and Fitzsimmons, M. (2004) argue that mangers of service organizations in any category, whether service factory, service shop, mass service, or professional service, share similar challenges, as noted in Figure 1.1. Due to similarities stated, the work will focus on professional services.

Figure 1.1 Challenges for service managers

Challenges for managers (low labor intensity):

Capital decisions

Technological advances

Managing demand to avoid peaks and to promote off peaks

Scheduling service delivery

Challenges for managers (high interaction/high customization)

Fighting cost increases

Maintaining quality

Reacting to consumer intervention in process

Managing advancement of people delivering service

Managing flat hierarchy with loose subordinate-superior relationships

Gaining employee loyalty

Challenges for managers

(low interaction/low customization):


Making service "warm"

Attention to physical surroundings

Managing fairly rigid hierarchy with need for standard operating procedure

Service shop

(Low labor/high interaction and customization)

Service factory

(Low labor/low interaction and customization)

Professional service

(high labor/high interaction and customization)

Mass service

(high labor/low interaction and customization)

Challenges for managers(high labor intensity)



Methods development and control

Employees' welfare

Scheduling workforces

Control of far -flung geographical locations

Startup of new units

Managing growth

Source: Challenges for service managers. (From "How Can Service Survive and Prosper?" by Roger W. Schmenner, Sloan Management Review, vol. 27, no. 3, Spring 1986, p. 27)

For some services, such as banking, however, the focus of activity is on processing information instead of people (Powers and Hahn, 2003).

The service concept and competitive advantage

Carr and Johansson (1995) said that reengineering to achieve major improvements in performance takes place in core business processes critical for competitive advantage. Three generic strategies are successful in formulating methods that allow a firm to outperform competitors. The strategies of overall cost leadership, differentiation, and market focus are approaches that service firms have adopted in various ways to gain a competitive advantage (Bharadwaj, Varadarajan, Fahy, 1993). Winning customers in the marketplace means competing on several dimensions. Customers base their purchase decisions on variables such as price, convenience, reputation, and safety. Knowing your customers is a significant competitive advantage for a service organization (Powers and Hahn, 2003). For instance, having a data base of customers' names and addresses and their use of the service permits targeted marketing and individual treatment of customers.

Understanding the business environment of service organizations

Service firms compete in a difficult economic environment, and there are many reasons for this difficulty (Fitzsimmons and Fitzimmons, 1998):

Relatively low overall entry barriers. Since service innovations are not patentable, and in most cases, services are no capital-intensive, thus, innovations can easily be copied by competitors.

Minimal opportunities of economies of scale. The nature of service assumes high customization and labor intensity, therefore, there is not much opportunity to benefit from economies of scale.

Erratic sales fluctuations. Service demand varies during the time, sometimes seasonally.

Customer loyalty. Established firms using personalized service create a loyal customer base, which becomes a barrier to entry by new services.

Information Technology and service industry

According to Harmon (2003) companies that routinely practice business process improvement are able to consistently improve the results from existing processes. Moreover, companies that practice more extensive business process redesign efforts can achieve improvements in excess of 20%. It shows the fact that most existing processes are less efficient than they could be and that new technologies make it possible to redesign much more efficient processes (Harmon, 2003).

Harmon (2003) said that over the past few decades a major trend has been to increase the number of tasks performed by computers and he argued that any companies that seek to improve a process will want to consider automating and streamlining the processes.

A recent industry survey (Oracle Financial Services, 2009) found that Business Process Improvement as the number one priority for IT organizations. Banks, investment management firms and brokerages can achieve significant cost efficiencies by leveraging BPM to streamline and integrate front, middle, and back office trade processes (Oracle Financial Services, 2009). In the current financial crisis and recession of global capital markets, financial institutions are facing problems such as margin pressures, growing customer demand for better services, and increasing regulatory rules and obligations (Oracle Financial Services, 2009).

Chaotic Business Environment

According to the definition, chaotic means situation happening in a confused way or without any order or organization (Macmillan Dictionary, 2009).

Chaotics and Turbulent markets are the new terms that are mentioned in recent publication of Harvard Business Review (2009). Donald Sull (2009) in his article "How to Thrive in Turbulent Markets" relates uncertainty as the main contributor to chaotics and turbulence. According to Sull (2009) uncertainty is the defining characteristics of business competition today. He argues that competing in volatile markets is tough because it is difficult to predict the market conditions. The accounting company PricewaterhouseCoopers even summarized the decade ending in 2006 as "10 years of high-speed change" characterized by "unsettling twists and turns," with a series of events such as Enron's case, dot-com bubble, The September 11 terrorist attacks, The Gulf War, a sharp jump in commodity prices, the rise of emerging economies, and credit crunch (Sull, 2009).

In 1972, Edward Lorenz, father of Chaos Theory, posed the question, "Does the flap of a butterfly's wings in Brazil set off a tornado in Texas?" (Kotler and Caslione, 2009). According to Kotler and Caslione (2009), the idea of butterfly effect refers to the fact that small initial effect can cause an exponential growth of perturbations.

Kotler and Caslione (2009) define business turbulence as the unpredictable and swift changes in an organization's external or internal environments that affect its performance. Authors said that the "butterfly effect" occurs because of increasingly interconnected global economy supporting giant flows of trade and information.

Idea of Kotler and Caslione about chaotic business environment was supported by Georges Anderla (1998) in the article called "Chaotics" in European Business Review.

Kotler and Caslione (2009) argues that there is much more risk and uncertainty in business today that ever before. It is coming from disruptive innovations and big unexpected shocks. Kotler and Caslione (2009) describe it as "a new normality" saying" characterized by "ongoing continuous turbulence and heightened chaos". The contrasts between normal economy and new normality economies are shown in Table 3.

Table 2.1 Normal versus new normality economies.


Normal Economy

New Normality Economy

Economic Cycles




Definable (Avg. 7 years)

Unpredictable, Erratic


Definable (Avg. 10 months)

Unpredictable, Erratic

Potential Impact of Issues



Overall Investment Profile

Expansive, Broad

Cautious, Focused

Market Risk Tolerance



Customer Attitudes



Customer Preferences

Steady, Evolving

Apprehensive, Flight to Safety

Source: Kotler and Caslione (2009), Chaotics: the business of managing and marketing in the age of turbulence, p. 16.

New normality economy is more than just normal times of up and down business cycles which are more or less predictable for businesses at the macro level (Kotler and Caslione, 2009). Today's businesses can expect big changes such as big shocks, many disruptions, causing increase in risk and uncertainty at both the macroeconomic and the microeconomic level (Kotler and Caslione, 2009). Authors also mentioned other factors that can cause Chaos:

Technological Advanced and the Information Revolution

Disruptive Technologies and Innovations

The "Rise of the Rest"


Sovereign Wealth Funds

The Environment

Customer Empowerment

Conclusion and Additional Research

There is abundant research in the literature, academic journals, and magazines about usefulness and potential gains in performance that organization can achieve using BPR and BPM. There are a lot of discussions about two different approaches; radical change ("from scratch") or working on existing processes (continuous improvement) (Racca, 2003). Literature also covers extensively the correlation between Business Processes and IT. Some authors even argue that there is no future in BPR (Racca, 2003). Literature describes frameworks, methodologies, and guidelines for the implementation of Business Improvement practices such as BPM and BPR (Jeston and Nelis, 2006) but not many researchers have gone into conditions under which radical change or continuous improvement should be undertaken. They concentrates on organization, its internal environment but not much about external environment such as economic and market turbulence, government regulations, region and culture, for instance, Asia, USA or Europe. There is also a lack of information about implementation of business process improvements in service industry.

The impact of Business Process Improvements practices in Central Asia, especially, in developing country of this region as Uzbekistan, needs to be observed and tested through more researches and studies on degree of awareness and concept of Business Process Improvement.


The purpose of this chapter is to present the chosen research strategy and methods of achieving the research objectives. Research purpose, and strategy, sample selection will be described.

According to Cooper and Schinder (2006), research can be defined as any organized inquiry carried out to provide information for solving problems. They further explore that business research is a systematic inquiry shoes objective is to provide information to solve managerial problems or management dilemma: the problem or opportunity that requires a management decision.

Research Purpose

Neuman (2003) states that the purposes of social research may be organized into three groups based on the researcher's goal: explore a new topic, describe a social phenomenon, or explain why something occurs. He argues that studies may have different purposes (e.g., to to explore and describe), but one is usually dominant.

Table 2. Different types of research purpose




- Become familiar with the basic facts, setting, and concerns.

- Create a general mental picture of conditions.

- Formulate and focus questions for future research.

- Generate new ideas, conjectures, or hypotheses.

- Determine the feasibility of conducting research.

- Develop techniques for measuring and locating future data.

- Provide a detailed, highly accurate picture.

- Locate new data that contradict past data

- Create a set of categories or classify types.

- Clarify a sequence of steps or stages.

- Document a causal process or mechanism.

- Report on the background or context of a situation.

- Test a theory's predictions or principle.

- Elaborate and enrich a theory's explanation.

- Extend a theory to new issues or topics.

- Support or refute an explanation or prediction.

- Link issues or topics with a general principle.

- Determine which of several explanations is best.

This particular study is a mix of different research purposes. Since the reader becomes familiar with the basic facts, trends, and concerns, the research is exploratory. But primarily it is descriptive because it involves research purpose and research questions. Also this study provides a background to the situation and relatively detailed accurate picture.