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Chapter: 3 Research Design


This chapter introduces the research designs and methodology including research tool selection and validation; data availability and collection; and sampling techniques. Empiricism is an approach taken in the pursuit of knowledge that asserts that only when that knowledge is gained through experience and the senses can it be considered sound.
The methodology used in this study presents a novel contribution to the Ethiopian Airlines and to the world airline literature and other organizations. In contrast to most previous studies in the literature that failed to incorporate the theoretical regularity conditions (i.e. the BSC, DEA and SFA integrated comparative approach) in the estimation of the efficiency, our model is estimated subject to full theoretical regularity as none of them has been adopted in the airline industry to integrate BSC, DEA, and SFA
This chapter is organized as follows. First, it discuses research process, research approaches, research type, research design, sampling techniques of the study, data collection method, data analysis method, Validity and reliability of the study.

Research Process

This framework provides an excellent overview and starting point when considering a research project. It gives insight into not only the thought process but also into what is required procedurally in order to execute a research project.
Saunders et al. (2007) presented a more detailed and formal approach to research with their Research Onion diagram. The research onion identifies and examines each major step in the research process and provides the researcher with an overview of each step. Overall, the research onion provides a comprehensive six step approach to research. The research presents a similar but more detailed approach to research:
Step 1 – Identify Research Question
Step 2 – Establish Research Objectives
Step 3 – Select Research Strategy
Step 4 – Prepare a Research Plan
Step 5 – Review the Literature
Step 6 – Gather the Data
Step 7 – Analyse and Interpret the Data
Step 8 – Prepare and Present the Findings
In terms of describing the research process used in this study with reference to reliability, replicability and validity of the scientific philosophies are used as underlying guiding principles. Each piece of research is, by its very nature, a unique process and as such may not fit a pre prescribed structure. With this in mind the following describes the steps taken by the researcher in carrying out this study.

Step 1 – Identify Research Question

At the beginning of the study after exhaustive efforts, the researcher has been searching for a topic associated with strategic vision of the Ethiopian airlines and interrelated issues for the selection of topic since then he has been familiar with a number of articles related concerning the airlines and much of the study were done on the performance evaluation of airlines. Then, he has gained an interest and developed a deep understanding of the airlines industry with the issues of technical efficiency assessment. He has found the research gap from what he has witnessed on the massive changes that have taken place across the international industry as a result of the arrival of the low cost carriers, financial recession, 9/11, SARS, raising fuel price, to the marketplace. During this time many companies tried and failed to successfully emulate the low cost model including attempted moves to low cost carrier model by legacy carriers. This would suggest that emulating the low cost model is not as straightforward as it might appear, nor is it a guarantee of success. Thus the research question becomes ‘What elements constitute highest efficiency of the airlines?’

Step 2 – Establish Research Objectives

Fundamentally, this research sets out to examine world major airlines in an attempt to identify those who are leading the field in terms of airlines performance. In addition, it is intended to benchmark the airlines examined and investigate their financial, operational and strategic 78 activities in an attempt to identify best practices or common characteristics that may be followed by the poorer performing airlines with a particular emphasis of Ethiopian airlines. Above all, the major objective of the study is to develop an integrated comparative model which is a unified comprehensive model to measure technical efficiency.

Step 3 – Literature Review

A review of the relevant literature is carried out. This review covered two main areas performance measurement techniques and the current literature surrounding performance measurement in airline. Chapter 3 looked specifically at performance measurement techniques.
The goal is to identify a suitable technique that would measure financial and operational performance. It is necessary that publicly available data could be used as the researcher has no access to proprietary data. The Balanced Scorecard, Data Envelopment Analysis and Stochastic Frontier Analysis are all reviewed. The reviews are conducted in both a general context and more specifically within the context of airline performance measurement.
Chapter 3 also reviews the literature specific to performance measurement from an airlines perspective. This is carried out with a view to identifying a gap in the literature. From this review DEA was identified as one of the most commonly used analysis techniques with regard to assessing company performance in airlines. This highlights DEAs and SFA suitability for performance analysis in the airlines sector above that of other methods. None of the studies integrated using of BSC- DEA and SFA to its full potential together. DEA consists of three different methodologies for assessing efficiency, but in the majority of the studies reviewed only one or two methodology was employed. In this study, all three DEA models Variable Return of Scale (VRS) and Pure Scale methodologies will be used and applied in comparative with SFA. In the majority of the studies data sources were either not provided or the data were obtained from a mix of third party agencies i.e. International Civil Aviation Organization (ICAO) or International Air Transport association (IATA) and some cases included data that were taken from the airlines themselves.
Although DEA is a frequently used method for assessing company performance in an airlines context, to date the structure of the majority of the empirical work appears to be; investigate general data availability (i.e. investigate what data has been collected and made available by a third party such as IATA, ICAO or www.wikinvest.com) → apply DEA → report result. This approach ultimately results in a study of DEA and SFA using airline data. This researcher proposes the opposite, a study of airlines using DEA & SFA , by adopting the input and output using the BSC concept and following structure, select target group for investigation (airlines) → investigate specific data availability directly from target group → apply DEA & SFA model → report result → further analysis. This approach not only allows for more targeted results i.e. a DEA & SFA study on a group of specifically selected airlines as opposed to a “group of airlines” but gives a deeper insight into how these airlines are performing, why they appear where they do when ranked alongside their peers and then provides specific, actionable targets in order to improve performance. The further analysis aspect of the study consisted of case studies of high, medium and low performing airlines as identified from the Data Envelopment Analysis and Stochastic Frontier Analysis. This allowed for the identification of best practice across a range of financial and non financial headings.

Chapter: 1 Introduction 
1.1 General Overview of the Thesis
1.2 Background: The Airline Industry
1.3 Problem Statement
1.4 Research Objectives
1.5 Rationale
1.6 Delineation of Study
1.7 The scope of the Study
1.8 Significance of the Study
1.9 Glossary: Parameters and Definition of Terminology
1.10 Organization of the Thesis
Chapter: 2 Literature Review 
2.1 Introduction
2.2 Theoretical Model Review
2.3 Empirical Reviews .
2.4 The Research Gap
2.5 Conceptual Framework
Chapter: 3 Research Design 
3.1 Introduction
3.2 Research Process
3.3 Research Approach
3.4 Research Type
3.5 Research Design
3.6 Sampling Design
3.7 Research Models Specifications
3.8 Data Collection Method
3.9 Research Variables and Measures
3.10 Data Analysis Method
3.11 Validity and Reliability
3.12 Ethical Issues
Chapter 4: Result of the Study 
4.1 DEA Result
4.2 Stochastic Frontier Analysis Results
4.3 Comparative Results of DEA and SFA
Chapter: 5 Discussion, Conclusions and Recommendations 
5 .1 Discussion of the Study
5.2 Conclusion of the Study
5. 3 Recommendation of the Study

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