Economic Downturn

Economic Downturn Economic Downturn Home›Economics Posts›Economic Downturn Economics PostsMethodology3.0 IntroductionThe economic downturn witnessed between 2007 and 2009 brought about a myriad of negative consequences for companies and most of them are still struggling to make up for the losses. Companies that were utilizing the outsourcing strategy however did not sustain severe losses compared to companies that utilized inbound services. This is because outsourcing reduces expenses considerably, given that the outsourcing company bears all the costs and also bears all the risks incurred in the outsourced service. The Standard Chartered Bank in the UK is one such company, which practically reduced the severity of the economic downturn. The bank which outsources the HR function did not incur major losses during the downturn because expenses in the HR services were highly minimized. The impact of HR outsourcing on the financial performance in UK banks is a subject that elicits the need for resear ch, hence this study.Presentation of the methodology that will be used in the study is the main goal of this section. This section seeks to establish how HR outsourcing affected financial performance of UK’s banking industry. Understanding the methodology is important in developing a study whose findings are acceptable to existing social systems. It is important that the research be designed in a manner that is appreciative of the role played by accuracy in ensuring that the findings of a research are acceptable. In this regard, the researcher must aim at using the most appropriate research approach, instruments and research strategies to ensure accuracy of the information collected.3.1 Research PhilosophyThis research will aim at maintaining the highest level of accuracy and validity, with an objective of making it a reliable research for reference in the academic as well as the business field. It should be factual and as informative as possible to assure its usefulness to the us ers. The idea is to produce a high quality research paper through coming up with conclusions that represent the actual situation on the ground. Further, it will exhibit high professionalism levels and thus act as a guide for future research. This will be done through efficient selection of the population sample and utilization of research strategies that assure accuracy of data collected. The completion of this study will thereby culminate in a well researched paper that will not only provide information that is highly valid; but which also depicts high accuracy levels and thus useful for drawing important conclusions for firms that wish to consider the outsourcing strategy.3.2 Research ApproachAn understanding of the research approach is important in determining the levels of accuracy that can be attained in any given research (Russell 2005). It is of critical importance that the research methodology employed by any research be reflective of its objectives. This is the main factor that was considered in seeking a survey approach. In this regard, this research will utilize the qualitative approach in obtaining relevant information to answer the research questions. The use of qualitative approach is applicable in this study because the research is mostly explorative; given that it seeks to determine the effect of HR outsourcing in banks during the economic downturn. As noted by Cohen, Manion and Morrison (2000, p. 18), qualitative research attempts explain the occurrence of phenomena through answering the what, why, how, where, and when of various occurrences to come up with conclusive findings. On the other hand, the quantitative approach seeks provide statistical representation of factors under study in order to establish relationships between variables. In this study, there is insignificant use of statistics and thus the quantitative approach is not necessary in the completion of the research.3.3 Research StrategiesThese refer to the research methods that ar e going to be utilized in collecting data to answer the research questions. In this regard, the research strategies should not only be effective in collecting data but they should also ensure that the information collected is authentic and applicable (Orcher, 2005, p. 87). Research strategies must be efficient in obtaining the desired information with minimal challenges and few chances of obtaining unreliable information. This study will utilize two main research strategies namely the survey method and case study method as discussed below:3.3.1 SurveyThe survey method refers to a descriptive, non-experimental method that is often used in collecting information on phenomena that are not directly observable. These may include opinions and experiences; mostly collected through questionnaires and interviews (Russell, 2005, p. 71). In this research, the main objective is to establish whether HR outsourcing had an impact on the financial performance of banks in the UK. This is a research that will involve both opinions and facts from the banks’ financial records. It is however notable that different opinions and descriptions of the HR outsourcing in the face of the economic downturn will be required hence the need to use the survey method. The research will utilize the survey method to obtain primary data for use in providing answers to the research questions. The survey which will be conducted in the form of a questionnaire will seek to determine the how HR outsourcing affected the performance of banks in the UK during the downturn.Surveys are often conducted in two forms: cross-sectional and longitudinal surveys. While cross-sectional surveys collect information based on a single time period, longitudinal studies span over long durations (Trochim William, 2001, p. 176). The survey to be used in this study can be described as cross-sectional, mostly because it will involve the study of a onetime occurrence (the economic downturn) in order to establish how the UK banks were affected by this unfortunate happening. It will only involve one survey in which the respondents involved will be required to answer the various questions regarding the HR outsourcing and bank financial performance.3.3.2 Case StudyThe case study method is considered highly useful due to its ability to provide practical illustration of phenomena and thus give a more clear explanation of factors under study (Yin, 2003, p. 13). It provides real life application of the subject under study and thus provides a clear representation of how specific phenomena occur.  A case study denotes an in-depth investigation in which a researcher studies events, groups, individuals, policies, institutions and projects among others in order to explore underlying principles and causations (Yin, 2003, p. 16). Case studies also refer to investigation in the real life context aimed at establishing the specific nature of phenomena and occurrence of events under study. Case studies can either be e xplanatory or descriptive and based on a combination of quantitative and qualitative evidence.This research will use Standard Chartered Bank in the UK as the case study to examine the impact of HR outsourcing on bank financial performance during the economic downturn. Standard Chartered Bank Plc in the United Kingdom has been in existence for 150 years and has therefore developed vehemently in terms of managerial expertise (Standard Chartered UK website). The bank which is headquartered at Basinghall Avenue, London is considered as one of the largest banks in the United Kingdom and among the top 20 FTSE companies (Standard Chartered UK website).The bank is home to numerous banking operations and has grown admirably to cover a wide client base all over Europe and beyond. As a large bank therefore, the bank seeks to reduce operational costs through outsourcing, including HR outsourcing. This works through delegating the HR function to expert companies and thus giving the bank an oppor tunity to concentrate on important aspects and functions of the bank. The Standard Chartered Bank will act as a perfect choice for a case study on the impact of HR outsourcing on the financial performance during the economic downturn. The case study will seek to identify how the bank survived following the economic downturn and whether the use of HR outsourcing had any impact on the financial performance of the organization. In this case study, the advantages and disadvantages of outsourcing will be discussed with an objective of providing companies with information relevant to this strategy. The impact of outsourcing on financial performance will also be discussed and this information used to relate to the challenges faced during the economic downturn.3.4 Data Collection3.4.1 InstrumentsData collection instruments to be used for this study will be questionnaires. This will include formulation of a set of questions addressing various issues pertaining to the subject of the research; which respondents will be required to answer as indicated in the questionnaire.3.4.2 PopulationThe population that this research will focus on consists of banks in the United Kingdom. This population is particularly important because it will help to establish the challenges that banks were facing during the economic downturn. In addition to the information obtained from the managers from Standard Chartered Bank management, this population will help to establish the relevance of HR outsourcing and how this may affect the financial performance of a company. The sample to be selected is therefore a representative sample of the UK banks, which in this case symbolize the population. Six banks will be selected randomly across the large banks in the UK to act as the representative samples for the entire banking population. The information obtained from the six banks will be taken to represent the entire banking sector in the UK.3.4.3 SampleIn a bid to achieve the objectives of this study, a sample of 34 managers will be included in the survey. Among the managers selected, 10 of the managers to be interviewed will be from Standard Chartered Bank and will consist of managers from the executive, financial departments, operations departments and the HR departments. Apart from the 10 managers from Standard Chartered Bank to be included in the survey, the other 24 managers to be included in the study will be obtained from six (6) banks selected randomly among major banks in the UK. Three of these banks should not be outsourcing their HR while the other three should be outsourcing their HR. This will help to differentiate the impact of the economic downturn on banks in the UK, depending on whether they were outsourcing the HR services and how the financial performance of each was affected.3.4.4 Sampling methodsThis research will utilize convenience sampling to select the managers to participate in the survey. Alternatively referred to as opportunity sampling, convenience s ampling refers to a form of non-probability sampling in which the sample drawn is selected because it is either easily available or convenient to obtain the required information for the study (Bryman Bell, 2007, p. 247). This method is highly useful where a certain specific sample in the population is capable of providing the information required for the research. In this study, the sample will be drawn from the mainstream managers because they are more capable of having information about the impact of HR outsourcing on financial performance. The executive, finance managers, HR managers and operations managers are in a better position to provide information on the costs incurred in their companies. Accordingly, they are best placed to provide the information required for this study as opposed to regular employees who may not have direct contact with the finances and operations of the company. The researcher will pick four managers from each of the 6 banks selected besides Standard Chartered bank. These will include the Chief Financial Officer, accounting manager, HR manager and Operations manager from each bank selected. Using probability sampling would thereby reduce the possibility of obtaining the desired data, hence the use of convenience sampling.3.5 Data Analysis  Data collection must be followed by analysis, interpretation and presentation.  Analysis of the data will take on a qualitative approach and will involve both descriptive and inferential analysis. The qualitative approach is highly applicable in this research because it mostly involves analysis of phenomena as they occur within the UK banks. The study explores how the banks involved were affected financially and the role of HR outsourcing in these banks. In reference to the qualitative approach, this research will apply the coding method for data analysis. This method is considerably effective for analyzing qualitative data, thus producing well refined results. Analyzing data using the codin g technique involves sorting data into segments containing related (Orcher, 2005, p. 209). For each segment, a ‘code’ is given, usually a word or short phrase to suggest what the findings in each segment represent. Upon completion of the coding process, the findings are summarized in a process that involves assessment of similarities, differences and relationships that exists among the findings.3.6 LimitationThe process of research is bound to be characterized by a considerable number of challenges and limitations, which the researcher should aim at coping with or eliminating to ensure successful research. These include difficulties and uncertainties that are likely to impact on this research including practical and ethical issues. To begin with, the banks are private institutions and getting internal information could thus be limited in the event that the management does not allow research within the organization (Bryman Bell, 2007, p. 93). The respondents may also give inaccu rate information due to the fear of being victimized, malicious intentions or general disinterest in the exercise (Holliday, 2007, p. 238). Time constraints are also apparent, given that the time available for the study may not allow exhaustive research. Accordingly, extra effort will have to be exerted to complete the project on time. Financial limitations may also prove to be a challenge when conducting the research and therefore the researcher may need to seek alternative sources of finance (Bryman Bell, 2007, p. 94).Most importantly, it can be hypothesized that the nature of banks in the UK is not necessarily the same and that the results obtained from the study may not be a true picture of what transpired in all the banks in the UK. The study makes the assumption that the results obtained from the sample population will represent the overall effect of the economic downturn on the financial performance of the banking industry. However, different banks not included in the study are likely to have had different experiences compared to their peers.3.7 QuestionnaireThe success of the research will to a significant extent depend on the effectiveness of the questionnaire in collecting relevant information to aid in meeting the objectives of the study. Accordingly, the questionnaire design should be formulated in such a way that it is easy to understand and at the same time focuses on obtaining answers to the main inquiry of the research (Russell, 2005, p. 278). The following considerations will be made during construction of the questionnaire:Readability: While the target population will mostly constitute of professionals with knowledge on the technical language used in business, the language used will be made as simple as possible so as to facilitate easy understanding and hence assure accurate results (Wilson et al, 1994, p. 33).Time: The respondents for this study are extremely busy professionals and therefore have little free time to spare in responding to the survey (Trochim William 2001, p. 281). Accordingly, only pertinent issues will be included in the questionnaire. This will reduce the input of respondents and therefore play a role in ensuring high response rates.Structure: The internal structure including the length and interaction between items in the questionnaire are expected to affect the response rate vehemently (Wilson et al, 1994, p. 32). In this regard, the questions will be constructed as simply as possible while keeping up with professional standards of research.Privacy: Privacy is considered to be of great importance because it affects the openness with which the respondents will answer the research questions (Trochim William 2001, p. 281). In this regard, the need for personal information will be completely avoided in the questionnaires so as to allow respondents to freely express their viewpoints.