Impact of Mergers and Acquisition on Firms: Case Study of PTT Global Chemical Company - Dissertation Example

? IMPACT OF MERGERS AND ACQUISITION ON FIRMS: A CASE STUDY OF PTT GLOBAL CHEMICAL COMPANY Chapter - Methodology 3 Introduction Research is often referred to as the search for knowledge. In common parlance, research is also deemed as a systematic and scientific exploration of pertinent information about the subject of concern. As a result of this research is regarded as “an art of scientific investigation”. Eminent scholars such as Wetter (2010) defined research as a process of expanding the knowledge without having any targeted application. The author also mentioned that an applied research o the other hand acts as a linkage between business and science. Newagepublishers (2013) defined research as “systematized effort to gain new knowledge”. Hence, it is evident that the methodology adopted for a project plays an indispensible role in the success of the project. In addition, the research methodology of a study is also crucial towards the way the research objectives are addressed. The research methodology of a study is defined as the procedures that are put into practise by a researcher in order to accumulate and organize data and information for the principal purpose of making organizational decision or addressing the objective of a particular study. Eminent scholars such as Blaxter, Hughes and Tight (2006) accentuated that “a research methodology defines what the activity of research is, how to proceed, how to measure progress, and what constitutes success”. This study aims to investigate the impact of mergers and acquisition on firms. In this context the company is PTT global chemical company. The secondary research has made it evident that the major thrust for companies to undergo merger and acquisition based on Thailand is to enhance their efficiency as well as increase the competitiveness of the firms. In this section, the study will highlight about methodology to be adopted for conducting the primary research as well as the way by which accumulated data will be analysed. 3.2 Qualitative and Quantitative Methodology The research methods are generally the various procedures, algorithms or schemes that are used in a research study. This is the reason why research methodology is often termed as a systematic way of addressing the problems of the study. In general, there are two broad research methodologies termed as qualitative research method and quantitative research method. The methodology chosen for the study however depends heavily on the objectives of the study and also the intention of the researcher. There are vast differences between the qualitative and quantitative research. The basic difference between a qualitative research and a quantitative research lie in the way research is being carried out (Creswell, 2003). Quantitative research is a type of research method relating to the characteristics that can be quantified or can be expressed in the form of quantity or can be articulated as numerical values. As a result of that quantitative methodology involves measurement of amount or quantity. The prime purpose of a quantitative research is to test the validity of hypothesis, scrutinize the cause and effect and ultimately make the predictions (Kothari, 1985). Researchers believing in quantitative methodology have a knack of collecting statistical or numerical information. In general the sample for a quantitative research is randomly selected and is large in numbers. The data collection techniques that are usually put into practise by the researchers includes questionnaire survey. Once the data and information are collected researchers use the available econometric and statistical methods to analyse the findings. Some of the most common ones are regression analysis, correlation analysis, Anova test and time series analysis to name a few (Hair, Bush and Ortinau, 2007). Qualitative research, on the other hand is concerned with the collection of qualitative data. Hence, researchers pursuing qualitative research have the knack of collecting in-depth qualitative information about the subject and endeavour to uncover the internal perception of the respondents. One of the common examples of qualitative research is ‘motivation research’ that attempts to investigate about the human behaviour. Hence it is evident that qualitative research aims to comprehend and interpret social phenomenon. Unlike quantitative research it does not involve scrutiny of any particular variable rather encompasses assessment of the whole setting. Some of the common data collection instruments used by researchers following a qualitative research are observation, focus group interview, semi structured interview and reflections among others. The conclusion is drawn by deducing the theory and the information gathered from the respondents (NSF, 2012; Pratt, 2006). Methodology Advantages Disadvantages Qualitative Methodology 1. It has the ability to discover in-depth information about people’s expectation and experience. 2. Less expensive than quantitative research 1. The collected data cannot be used to make assumption beyond the participants. 2. The conclusion is purely dependent upon the description and interpretation of the researcher. Quantitative Methodology 1. It allows measurement and calculation of data. 2. Data can be organized and can be converted into meaningful information. 1. Results are often limited as numerical descriptions do not provide detailed account of human perception. 2. It is not applicable for psychology & psychiatry and anthropological studies. 3.3. Research Strategy The research strategy of a study is the procedure which is used to achieve certain intermediary research objective. A research strategy of encompasses the process of sampling, data collection technique and the method to be employed for data analysis. Hence, data analysis and sampling strategies will be highlighted in the research (Indiana, 2013). 3.3.1 Questionnaires and Surveys Questionnaire is a research instrument used to collect data from the respondents. Usually, a questionnaire comprises of a number of a number of questions. There are two types of questionnaire namely open ended and closed ended and the type is chose as per the requirement of the study. On the other hand, surveys are another process of data collection. A survey usually involves an interviewer and an interviewee or a group of interviewee. The interviewer seeks to obtain certain information pertaining to the area of study. Type Advantages Disadvantages Questionnaire 1. Large information can be collected 2. Data can be quantified and can be organized easily 1. Sometimes it lacks validity. 2. Does not consider factors such as human behaviour, feelings. Survey 1. The process is simple and cost effective 2. Attitude and behaviour of the respondents can be observed 1. Response rates are sometime below the expectation. 2. Time consuming In this context of the study, it will be difficult to interview the managers as well as the stakeholders and hence this method is not selected. 3.3.2 Case Study Case study can be defined as an empirical inquiry that seeks to examine a phenomenon in real life context. A case study research can encompass a single or multiple case studies. Advantages Disadvantages Case Study 1. Helps in validation through triangulation. 2. Allow researchers to deal with complex circumstances 1. The process is time consuming. 2. There is a doubt over the credibility. This approach was selected for this study as case studies conducted by other organizations pertaining to merger and acquisition were obtained to study the impact of mergers and acquisition on firms. Although, there may be still doubts over the credibility of the chosen case study, but it was surmounted by selecting case studies from authentic sources and which have been cited previously by researchers and scholars. 3.3.3 Research Methodologies Types of Research Walliman (2001) defines research methodology as the method that will be applied to a study to address the research objectives, measure the progress and specifies about the way of communication about the subject of research. There are various types of researches and the advantages and disadvantages of the same are described below: - Type of Research Advantage Disadvantage Historical Enable researcher to know about past occurrences. The data may not be relevant in the current setting. Comparative It allows comparison of both qualitative and quantitative comparison of social entities. Depends upon the selection of the case. Descriptive It provides a multifaceted approach of data collection Confidentiality is one of the biggest weaknesses of descriptive research. Correlation It has the ability to show the relation between two variables. indistinct explanation of cause and affect Experimental It offers in-depth information about the subject. Biasness and untruthfulness may take place. Evaluation It has strong practical orientation and has the ability to improve program effectiveness. Conflict of interest may take place and sometime generalization of the findings becomes difficult. Action The research can be set within a specific situation and can lead to open ended outcomes Ethical issues often take place with this type of research. Since the study seeks to investigate the impact of merger and acquisition, the factors which will be considered for this study are historical, comparative, descriptive, correlation, experimental and evaluation. For example historical data will help in understanding impact of merger in general. In the similar way, correlation will allow us to know the impact of different variables on the study. 3.4 Sampling Sampling is the act of taking out a segment from the overall population which can be used to represent the overall population. One of the biggest advantages of using sampling technique in a research is that it reduces the overall cost of data collection and also makes the data collection process faster (Deming, 1996; Lohr, 2010). There are several ways by which sampling is done and some of the common methods that are put into practise include simple random sampling, stratified sampling, systematic sampling, quota sampling, cluster sampling and panel sampling to name a few. In this context, the study will have two set of samples; one set will be used for collecting quantitative data and the other for qualitative data. The sample will be the managers of PTT Global Chemical Company for qualitative study and the employees and other stakeholders for quantitative information. The sample size will be 5 for managers and 30 for the employees and stakeholders. The sampling process to be put into practise is simple random sampling. This is principally because, the chances of biasness will reduce and everybody will have the equal opportunity of getting selected. 3.5 Data Collection The data collection process of a research study is extremely important towards the study successfully addressing the objectives of the study. Moreover, data collection is also important as the conclusion of the study is drawn on the basis of it. Hence, the tools, techniques, instruments and strategy adopted for collecting the data plays an imperative role. Since the study attempts to uncover the impact of merger and acquisition on a company both qualitative as well as the quantitative aspect will be considered. The qualitative data will be collected through focus group interviews. On the other hand, the quantitative data will be collected thorough pre-coded questionnaire. Apart from directly collecting numerical data, the quantitative research will also accumulate data which can be easily quantified. 3.6 Data Analysis Data analysis is one of the vital functions of a research study. It is process by which raw data is organized and analyzed to convert it into a meaningful form. Hence, the technique of analysis must be appropriate. This study seeks to scrutinize the impact of mergers and acquisition on PTT global chemical company. The data analysis will be carried out with the help of SPSS and in this context, correlation between different variables will be identified and simultaneously the validity of the formulated hypotheses will be tested. 3.7 Potential Research Methodologies There are two major research methodologies namely qualitative research and quantitative research. The advantages and disadvantages are as follows: - Quantitative Research: - The biggest advantage of undertaking a quantitative research is that the collected data is easier to collate and put together in the form of tables or charts. Hence the data presentation is more logical and transparent. However, the biggest disadvantage is that the data collected may sometime become irrelevant and can be biased (Ereaut, Imms and Callingham, 2002). Qualitative Research: One of the biggest advantages of undertaking qualitative research is that it involves small sample size and hence the researcher has to incur less cost in comparison to a quantitative research. The major disadvantage is that the study will depend upon the perception and thinking of the researcher (Kumar, 2005). 3.8 Ethics in Research The ethical issues in research studies have been gaining substantial attention since the last few decades. One of the major reasons for this can be the appearance of several unethical issues in the field of research (University of Washington School of Medicine, 2010). Ethics in research plays a crucial role as it guides the research and ensures it gets completed without violating the ethical norms. Similarly, this study will also follow the ethical norms while accomplishing it. The identity of the respondents will be kept confidential, prior consent from the participants will be taken and the participants will be allowed to leave the study at any point of time. 3.9 Conclusion and Justification This study seeks to scrutinize the impact of mergers and acquisition on PTT global chemical company. Since the impact on the company is the subject of analysis, it will encompass both financial impact as well as the impact on the morale of employees and stakeholders. Therefore it is evident that the study requires the collection of both qualitative as well as quantitative data. As part of this study consists of case study, the chosen approach is adjudged to be relevant. The subsequent chapter will throw light on the results of the analysis. Reference List Blaxter, L., Hughes, C., and Tight, M., 2006. How to Research. 3rd ed. New York: McGraw-Hill International. Creswell, J. W., 2003. Research Design: Qualitative, Quantitative, and Mixed Methods Approaches. London: SAGE. Deming, W. E., 1996. Some Theory of Sampling. New York: Courier Dover Publications. Ereaut, G., Imms, M., and Callingham, M., 2002. Qualitative Market Research: Principle & Practice. London: SAGE. Hair, F., Bush, R. P., and Ortinau, D. J., 2007. Marketing Research. 3rd ed. New York: McGraw-Hill Education. Indiana, 2013. Research Methodology. [online] Available at: < http://www.cs.indiana.edu/mit.research.how.to/section3.12.html> [Accessed 02 August 2013]. Kothari, C. R., 1985. Research Methodology- Methods and Techniques. New Delhi: Wiley Eastern Limited. Kumar, R., 2005. Research Methodology: A Step-by-Step Guide for Beginners. California: SAGE. Lohr, S. L., 2010. Sampling: Design and Analysis. 2nd ed. Connecticut: Cengage Learning. Newagepublishers, 2013. Research Methodology: An Introduction. [pdf] Available at: [Accessed 02 August 2013]. NSF, 2012. Overview of Qualitative Methods and Analytic Techniques. [Online] Available at: < http://www.nsf.gov/pubs/1997/nsf97153/chap_3.htm> [Accessed 02 August 2013]. Pratt, N., 2006. Qualitative research. [online] Available at: [Accessed 02 August 2013]. Walliman, N. S. R., 2001. Your Research Project: A Step-by-Step Guide for the First-Time Researcher. London: Sage Publications Ltd. Wetter, J. J., 2010. The Impacts of Research and Development Expenditures: The Relationship Between Total Factor Productivity and U.S. Gross Domestic Product Performance. Berlin: Springer. Read More