Business Research Methods Topic for MBA and NET Students

1. Measurement & Scaling
Techniques
UNIT – III
Business Research Methodology

3. Measurement in Research
• In our daily life we are said to measure when we use some
yardstick to determine weight, height, or some other feature
of a physical object.
• We also measure when we judge how well we like a song, a
painting or the personalities of our friends.
• We, thus, measure physical objects as well as abstract
concepts.
• By measurement we mean the process of assigning numbers
to objects or observations, the level of measurement being a
function of the rules under which the numbers are assigned.
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4. Measurement Scales
• Nominal Scale
• Ordinal Scale
• Interval Scale
• Ratio Scale

5. Nominal Scale of Measurement
Nominal stands for “Name” of category
Numbers are used simply as levels for group or class
It is use for qualitative rather than quantitative data
Nominal Scale is the least powerful level of measurement
It provide convenient ways to keeping track of people,
objects and events.
One can not do much with the number involved.

6. Example

7. Ordinal Scale of Measurement
The lowest level of the ordered scale that is commonly used
Data elements may be ordered according to their relative size of
quality.
Four products ranked by a consumer may be ranked as 1,2,3 & 4 where
4 is the best and 1 is the worst.
In this scale we don’t know how much better one product is than
others, only that it is better.
One has to be very careful in making statement about scores
based on ordinal scales. For instance,
if Ram’s position in his class is 10 and Mohan’s position is 40, it cannot
be said that Ram’s position is four times as good as that of Mohan and
this would make no sense at all.
It only permit the ranking of items from highest to lowest
It has no absolute values, and the real difference between
adjacent rank may not ne equal.

8. Example
• The use of an ordinal scale implies a statement of “greater
than” and “less than” (an equality statement is also
acceptable) without being state how much greater or less.
• The real difference between rank 1 & 2 may be more or less
than the difference between 4 & 5.
• Since the number of this scale have only rank meaning, the
appropriate measure of central tendency is the median.
• A percentile or quartile is use for measuring dispersion
• Correlation are restricted to various rank order method.

9. Interval Scale of Measurement
• In this scale the value of zero is assign arbitrarily and
therefore we can not take ratio of two measurements.
• It doesn’t have the capacity to measure the complete absence
of trait or characteristics.
• But we can take ratio for intervals.
• It provide more powerful measurement than ordinal scale.
• It also incorporates the concept of equality of interval.
• Mean can be use for arithmetic operation and standard
deviation can be use for dispersion.

10. Example
• Some examples of variables that use interval scales would be
time, temperature (Celsius), temperature (Fahrenheit), etc.
• When using a twelve hour clock, we can compare the time
of 4:00 in the afternoon to 8:00 in the evening. It is possible
to say that the difference in time is four hours (8:00 − 4:00).
Please see the illustration below.

11. • On a comparable twenty-four hour clock, we can compare
the time of 16:00 in the afternoon to 20:00 in the evening. It
is possible to say that the difference in time is four hours
(20:00 − 16:00). Please see the illustration above.
•
If we look at the ratios of these numbers [4/2 = 2, and 18/16
= 1.125], the ratios are different, indicating that these ratios
have no meaning.

12. Ratio Scale of Measurement
• If two measurements are in ratio scale, then we can take ratios of
these measurements.
• The zero in the scale is absolute Zero
• Ratio scale represent the actual amount of variables
• Measures of physical dimensions such as weight, height, distance,
etc. are the examples
• All statistical techniques are usable with ratio scales and all
manipulations that one can carry out with real numbers can also be
carried out with ratio scale values
• Multiplications and division can be used with this scale but not
with other scale values
• Hence the ‘Nominal Scale’ is the least precise type of scale and
‘Ratio Scale’ is the most precise type of scale.

13. Example
• Money is measured in a ratio scale
• A sum of Rs. 100 is twice as large as
Rs. 50
• A sum of Rs. 0 means absence of any
money and is thus an absolute zero.
Weight, Volume, Area or Length are also
the examples of ratio scale.

15. Problems in Measurement
Scaling
• Problem related with Respondent
• Situation
• Measurer
• Instrument

16. Test of Sound Measurement/
Characteristics of Good Measurement/
Goodness of Measures
• Validity
• Reliability
• Practicality

17. Validity
• Validity refers to the accuracy of the measurement. It means
the ability of a scale to measure what is supposed to e
measured. In other words, Validity refers to the extent to
which a test measures what we actually wish to measure.
• For example, behavior of employees to measure consumer
satisfaction in a big shopping mall is a validity issue. As
behavior of employees is not the only determinant of
consumer satisfaction rather various others factors such as
pricing policies, discount, parking facility and others may be
responsible for generating consumer satisfaction.

18. • Hence, the tool that was designed to measure consumer
satisfaction from “employee’s behavior” may not be valid
measurement tool.
• The researcher are always concerned about the validity of
their measuring instrument.

19. Reliability
• It refers to the extent to which a scale produces consistent
results if repeated measurement are made on the
characteristic.
• It means reliability has to do with the accuracy and precision
of a measurement procedure.
• In other words, a scale or test is reliable to the extent that
repeat measurement made by it under constant conditions
will give the same result.
• Reliability is a necessary contributor to validity but is not a
sufficient condition for validity.

20. Practicality
• It’s an instrument can be judged in terms of economy,
convenience and interpretability.
• From the operational point of view, the measuring instrument
ought to be practical i.e., it should be economical, convenient
and interpretable.