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RESEARCH TOPIC: How complex investment appraisal procedures recommend right investment decisions in UK Industry. Investment banks case studies for JP Morgan and Merrill Lynch. 6/16/2010 Kaplan Professional MBA International Management (Top Up)
GAUHAR ISHAQUE C0363396
Contents Page 1 S. o 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33
3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7 2.0 2.1 2.2 2.3 2.3.1 2.3.2 2.3.3 2.4 2.4.1 2.4.2 2.5 2.6 1.0 1.1 1.2 1.3 1.4 1.4.1 1.4.2 1.4.3 1.5
Content o Chapter 1 INTRODUCTION Overview Research Question Research Objective Motivation / Rational for Research Personal Motivation (Career) Business Rational Academics Reason Research Context Chapter 2 LITERATURE REVIEW
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Conceptual Definition of Research Topic Importance Investment Appraisal Basic Literature Sources Theories Theorist Models Academic Debate Barriers to Investment Appraisal Implication to Investment Appraisal Self (Researcher’s) Opinion on Literature Review Literature Review Relevance to Research Topic Chapter 3 RESEARCH METHODOLOGY Research Philosophy Research Approach Research Strategies Research Sample Research Ethics Research Reliability and Validity Research Plan
9 9 10 10 10 11 11 13
Contents Page 2 33 34 35 36 37 38 39 40 41
4.0 4.1 4.2 4.3 4.4 4.5
Chapter 4 PERSONAL DEVELOPMENT PORTFOLIO Introduction Difficulties in Research proposal Resolving Difficulties Skill by Learning Outcome Portfolio Conclusion Bibliography Original Turnitin Report
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Research Proposal - Chapter 1 Chapter 1 1.0 1.1 INTRODUCTION Overview: Investment appraisal is the key factor for any business to obtain internal and external sources of funds. An entrepreneur decided to invest in the business to maximise profit in existing market on the basis of investment appraisal for available internal or external or both sources. The decision is not only to make which source of fund is more favourable and serve better in term of benefit and return but, also which project is more promising from source of investment point of view and why. Some technical processes of calculating investment appraisal are very complicated. As a decision making tool investment, appraisal is very common to adopt for investments in any type of business. In UK, where investment banks and high-street banks have a very significant role to play for business economy of the country and almost totally businesses are dependent over bank lending or borrowed financial investments. London not only a business and financial hub it is indeed a city with historical financial accountancy background for carefully position itself to second top city for business investment. There are a more number of opportunities for any investor to become prudent in new or rather old investments by consulting the banker and financial consulting firm. Banks like JP Morgan and Merrill Lynch use same techniques of investment appraisal for their valued finance seeker clients. Upon satisfactory report of investment appraisal, these financial houses sanction applied finance to needy business. But it is not simple because investment appraisal is a factual financial report which forecast the future return on presently available financial resources. Investment bank and companies keep very strict criteria to remit any financial sources for lending to businesses.
1.2 1) 2) 3) 4) 1.3
Research Questions and Objectives Research Questions: What are Investment Appraisals and why is it so important? What are process complexities in investment appraisal? How investment appraisal can work to Strengthen UK industries? What roles JP Morgan and Merrill Lynch have as an investment bank? Research Objectives: To critically evaluate investment appraisal performance of complex process for financial resourcing in UK large scale enterprises. To synthesize contribution of JP Morgan and Merrill Lynch in UK industrial enterprises on the basis of investment appraisals. To propose recommendation for JP Morgan and Merrill Lynch to improve decision making procedure based on investment appraisals.
1.4 Motivation / Rational for Research. My research proposal is unique in the sense that it would need all three reasons to take into account for preparing research proposal. 1.4.1 Business Rational: Investment appraisal make very difficult decision easy when comparing two or more investment needed project under investment appraisal determining technique. It tell which project to be invested in comparison of long term net present value of capital invested and short term payback period. It is actually a complex exercise for decision maker would not be making any unpredictable decision. Some time it’s too lengthy depending upon size of the project which, make the merit of critical decision eminent. Majority of the UK
Research Proposal - Chapter 1 own enterprise are finance by the Major investment bank like JP Morgan, Merrill Lynch as well as street banks e.g. Barclays, NatWest, Lloyd and recently Morgan Stanley from USA also open it business operation in UK. In short it the business rational is Investment Banks Role i.e. JP Morgan and Merrill lynch to benefit businesses in UK. 1.4.2 Academics Reason: It gives researcher more interest for this particular topic than any other topic, because he can relate his proposal’s topic to his previous assignment that he submitted in his “Advance Professional Diploma”. Assertive feedback would not be a challenge from his previous course work. It may also give him an opportunity to critically research on previously examine topic and convey his thought and observation to general masses. The institution like Kaplan is also a motivate him to perform such a research proposal for final dissertation. 1.4.3 Personal Motivation (Career): Researcher ultimate objective after completing MBA from Kaplan is to find a challenging job in financial sector where he can perform better and attain best possible working experience using my previous working experience. Researcher is bachelor in commerce and mostly worked in accounting field. Therefore by doing such a research, researcher may get a good insight of UK banking system for business entrepreneur and at the time of job interview he could explain better that what MBA research was about. If researcher got luck in his favour than may be the prospect employing firm would be researching investment banks. 1.5 Research Context The important and interesting part of my research is the investment bank because that is where the investment really comes from in UK. The foreign investment groups working in UK with objective of earning interest over their lending to investor in the form of profit or in case of business unsuccessful it would be repossession of assets against the investor liability. The contrast and similarity of these two banks would be synthesized critically in lieu to basic investment appraisal criteria for their basic objective and contribution in investment sector to support UK large enterprises. There are two well known main investment banks i.e. JP Morgan and Merrill lynch in world for indsustrial and commercial business. Researcher chose both of these mentioned banks to incorporate in his research because it would emphasize researcher argument in greater detail for comparison and consistency and also separate research topic from being a general statement, therefore these investment entities are; A. JP MORGAN JP MORGAN ASSET MANAGEMENT: The world largest asset manager has total assets of $2.0 trillion serving 20,000 clients all over world (100 countries). This asset management company is offering its financial services to business entity for the last 200 historic years of diverse financial services. It is a part of JP Morgan Chase & Co, and they have expertise for institutional and individual investor in global equity investment, fixed revenue, tangible assets, hedging, personal equities and liquidities. JP Morgan has won seven times in row for Gold Standard Award. JP Morgan has developed its financial services for managing assets, commercialise and private banking, banking for investment, securities and Treasury Services. (www.jpmorgan.com/pages/jpmorgan); (www.jpmorganassetmanagement.co.uk) B. MERRILL LYNCH MERRILL LYNCH BANK OF AMERICA: Commonly known as Merrill Lynch joined forces with bank of America in 2008 to become Bank of America Merrill lynch. This is another largest financial institution with clients over 150 countries. 99% of US Fortune 500 and 83% of Fortune Global 500 are in banking and financial relationship with BOA Merrill Lynch which has service diversification in Global Market, Investment Banking and Private Equity. Merrill Lynch has $2.2 trillion of assets in approximation and joint venture has raise nearly 3.0 trillion for client
Research Proposal - Chapter 1 worldwide. Stocks have listed under Industrial Average of Dow Jones at NYSE. Most of the brokerage house held in the world by Merrill Lynch is also a very old bank and in financial sector for near about 100 years. (http://gmi.ml.com/); (http://ml.com/indexasp) Morgan Stanley is also making its way to UK business. Researcher chose two banks because diversity of their back ground although both are USA based assets management firms but there operations in UK need to be discussed. It would support for comprehend my research in such a way that it asserts my arguments. These brokerage houses and asset management companies would also lead the businesses to form collaboration, merger, joint venture and acquisitions. Therefore the investment banks would also be considered as catalyst in many business prepositions.
Research Proposal - Chapter 2 Chapter 2 2.0 LITERATURE REVIEW
2.1 Conceptual Definition of Research Topic: The core concept of research proposal is to understand background process of the investment appraisal. That is why investment is so important in capital market as well as money lending for business investment. Process of investment appraisal is so delicate and complex. Therefore there are many implications on the business investment plan. These may cause the project to be delayed, and even some time terminate. What could harm by mal practise investment appraisal approach to business plan moreover, how investment banks e.g. JP Morgan or Merrill Lynch can use this financial tool or activity to support new and existing business, is under consideration. Lumby & Jones (2001; 163) discussed in fundamental of investment appraisal: “In attempting to outline a normative theory of investment decision making, we shell try to be both as practical and realistic as possible. In doing so, we will assume that hard (or external) capital rationing, both for individuals and companies, is likely to be only a relatively short-run phenomenon which may well arise, in practice, out of poor forward planning. It is certainly true to say that unlimited amount of investment capital are not immediately available to companies, because capital raising operation can take some time to arrange.” Process for Investment Appraisal: Since investment appraisal is a financial document and it is generated on recommendation from important basic financial document which is the prerequisite for it; Perquisite Investment Appraisal Activities: 1. Preparation Financial Statement Ledgers accounts Income statement Final Accounts Balance sheet 2. Interpretation of Financial Statement 3. Sources of Finance 4. Investment Appraisal: Activities of an investment appraisal is tend to process an investment recommendation after thorough consideration of project or a business concerning investment, to evaluate the financial return over a certain period of time. There are different methods or types to consider the financial viability of the project or business investments, which are listed. Investment Appraisal Activities: • Pay Back Period • ARR (accounting rate of return) • Cash Flow • NPV (net present value) Discount Cash Flow • Internal Rate of return (DCF) • Profitability Index Post-Investment Appraisal Activities After the basic requisite in term of financial document an investment appraisal can be produce which could initiate further accounting activities. Forecasting Decision Making Budgeting
Based on Investment Appraisal
Research Proposal - Chapter 2 2.2 Importance of Investment Appraisal: Moran (2000; P10) state that in discussing investment appraisal for non-financial manager: “There is a vast array of investment types that must be evaluated in the course of running a business. Any investment appraisal method used must be robust enough to cope with the varying dimensions of investment size, length and complexity.” Importance of investment appraisal method is segmental highlighted in above book reference in term of investment manifestation. The Investment appraisal is a critical review for proposal concerning investment that could be resource by investing companies. Mostly these companies are investment or commercial / street banks. Without a valid and feasible investment appraisal these financial institution may not be willing to lend their capital, no matter how beneficial and profitable business plane may look. 2.3 Basic Literature Sources of Investment Appraisal: This is much detailed written financial topic. Many financial experts have given their thought over this accounting topic. 2.3.1 Theories: Good theoretical literature could be viewed online and through library’s searches. The general idea and concept of investment appraisal criteria is to relate empirical formulas and value of the money in present and future consideration. Basic idea of investment appraisal revolves around the following theory which, West & Stein (1997; P5) state that: “An evaluation of the costs and benefits of a proposed investment in operating assets. Capital investment appraisal techniques generally involve comparisons between the project cash outflow to recognise changes in the time value of money, or may be based on unadjusted cash flows”. a) Investment Appraisal vs. Investment Appraisal Techniques Misapplication: Anon (2010 ;P1) define investment appraisal in The Time 100 12th Edition: “One of the most important long term decisions for any business relates to investment. Investment is the purchase or creation of assets with the objective of making gains in the future. Typically investment involves using financial resources to purchase a machine/ building or other asset, which will then yield returns to an organisation over a period of time.”
YEAR 1 2 3 4 NET CASH INFLOW (£mn) 6 6 6 6 INVESTMENT PROJECT COST
Ideally appraise investment has illustrated in above table showing predicted cash flow for “Hazlewood Sandwiches” after investment of £25, where as the technique utilize is payback period. For the sake of argument this example of historic technique would not be enough to discuss appropriate objectiveness of researcher’s proposal and also limiting the usefulness of this accounting method where it can serve favourably if applied perfectly with its limiting factors and prudent approach. Therefore researcher would go in the detail study background by Anon (2010; P2) state in investment appraisal thesis that “Surveys of capital budgeting practices in the UK and USA reveal a trend towards the increased use of more sophisticated investment appraisals requiring the application of DCF techniques.” The implementation success of investment appraisal technique can be seen from above words of thesis. Financially ongoing trend is more toward complex methods of numerical formula that
Research Proposal - Chapter 2 presents an investment appraisal very accurately. Project management could become complacent due to covering every investing factor. The real picture to this adaptable technique can be supported from the following words. Whilst be aware of misapplication, that definitely cause a business project to perform under if not exactly right amount of capital invested. This is most common mistake that investor made either deliberately or due to scarcity of capital resource. Drury and Tayles (1997; P86) states that “Several writers, however, have claimed that companies are underinvesting because they misapply or misinterpret DCF techniques.” Another common error when investment appraisal has done is made by overstating the discount factor or rate which make investment attractive on lower investment capital and return is higher which violates the prudent concept of accounting standard so, project become investment starve or emergency capital seeker. Dimson and Marsh (1994) cited in Professor Colin Drury and Lecturer Mike Tayles (1997; 89) “many UK companies may be using excessively high discount rates to appraise investments and, as a result, these companies are in danger of under investing.” That is a misleading form of fact, which entrepreneurs look for investments to a high yielding project with miscalculated low available resources. This is not sincere to project viability at all, infect it omit scare finance from capital market to inappropriately investment appraise project. 2.3.2 Theorist: During research of proposed topic researcher would come across numerous writers of the articles and author of books and generals who contribute to this very important accounting and financial activity. Steve Lumby and Chris Jones, Professor Colin Drury and Lecturer Mike Tayles, Dimson and Marsh, West and Stein, and Kate Moran were the main theorists in researcher’s proposal. Apart from Kate Moran who discussed investment appraisal for non financial managers, rest of other wrote much on investment appraisal methods of calculation and process. Importance of the topic in relation to other researchers and financial analyst whatever they have contributed from their experience, one thing is common among them all, as “investment appraisal” is a fundamental practice and primarily must done activity before an investment could be undertaken. The researcher has used past literary researcher’s works, that would be sufficient to support research topic. Bibliography dominated by journal, article, thesis and books would reflect investment appraisal case studies of companies. 2.3.3 Models: The models of investment appraisal are demonstrated what investment appraisal methods are. It depends upon suitability of investment plan that whichever method it would be taken into practice to evaluate the investment feasibility of business appraisal plan. The following diagrams would help us visualise and understand the process of investment appraisal as whole and individually. Investment Appraisal Model
Source: Investment Appraisal Presentation (copy right 2007 – Biz / ed) http://www.bized.co.uk
Research Proposal - Chapter 2 The purpose of this model is to educate readers about investment banks such as Merrill Lynch or JP Morgan guideline for considering financial appraisal. Problem to these models are their complex nature integration to each other investment process, but as a model it is easy to illustrate. 2.4 Academic Debate: The aspects would be cover in consideration of their implication in a broader perspective of debate as well as narrow it down to relate to case studies and journal’s article for industry. 2.4.1 Barriers to Investment Appraisal: The main problematic obstacles to investment appraisals for UK industry and investment banks, those want to invest their capital reserves or shareholder’s funds for better return on capital investment, are elaborated below; a) Capital Market Imperfection: Analytical financial position of the company given preference over actual consideration of the proposed business project. Source of Investment appraisal is financial statement which could be judged against analytical interpretation of available financial sources by virtue of financial ratios. Capital market analysis can affect investor decision for project to go ahead and deter the decision making process depending upon capital market feedback. Drury & Tayles (1997; P88) states that “The extent to which a project’s impact on financial accounting performance measures influences capital investment decisions is an area where further research is required.” An extensive research beyond short term financial factor that could restrict a positive investment appraisal could help in find out actual reason behind decision in approving or disapproving investment in a project. 2.4.2 Implication to Investment Appraisal: Unpredictable interest rates in capital market and complex investment appraisal process that has already made it an implicated accounting technique. Now it has advanced to further more discounting factor such as DDC (discrete discount factor) and CDC (continuous discount factor), therefore Drury & Tayles M. (1997) cited within thesis by Anon (2010; P3) state that “many UK firms are guilty of misapplying DCF techniques.” a) Performance Implication to Investment: Total quality management, Kaizen, learning organization, six sigma and BPR are tested and adaptable approaches to satisfy customer and fulfil their needs. These methods of improving performance increase cost of capital employed. As it is stated by Carr and Tyson (1992) cited in Angel and Jeya Chandra (2001; P109) that “TQM programs, such as zero defects or six sigma, demand significant operating expenditures and capital investment.” Associated cost for satisfaction is invisible and very difficult to assertion because it is directly related to customer but indirectly to performance. Margavio et al (1993) cited in. Angell and Jeya Chandra (2001; P109) in stating cost of performance implications that: “Furthermore, failure costs related to customer dissatisfaction, often described as the hidden costs of quality because they are so difficult to measure or estimate, can total a significant 20 per cent of the cost of sales.” b) Risk Analysis: Although there are many benefits of risk examination in appraising investments to set aside demerits. A project must be judge and analyse before any decision for investment made. As a whole investment appraisal analysis is so broads and depth that it is virtually impossible to get a hundred percent accurate analysis. A minute negligence could cause a disaster to entire project where as analysis were denied any
Research Proposal - Chapter 2 such predictions. Savvides (1994; P28) stated during assessing investment appraisal’s risk that: “Overlooking significant inter-relationships among the projected variables can distort the results of risk analysis and lead to misleading conclusions. The analyst should take due care to identify the major correlated variables and to adequately provide for the impact of such correlations in the simulation.” c) Inflation: It has relevance to investment appraisal and incremental inflation should always consider in appraising investment for any project proposal. Project cost shell be normally incremental due to increasing rate of inflation. Finnie (1988); Hodder et al (1985); Kaplan Financial (1986) cited in Professor Colin Drury and Lecturer Mike Tayles (1997 ;P88) states that: “that firms are guilty of rejecting worthwhile investments because of the improper treatment of inflation in the financial appraisal.” Apart from inflation there is another cost i.e. sunk cost e.g. market research or survey for project or one time advertising campaign which has relevance to investment appraisal but not as incremental cost of inflation like annual staff increment or yearly advertising budget expenditure. 2.5 Self (Researcher’s) Opinion on Literature Review: The dilemma in capital investment is easy to understand but hard to accept. Prime objective of an investment appraisal is an investment decision making. Decision Making: This decision is tough when two or more project’s proposals of same importance compared to decide investment for preference. As far as method of investment appraisals are concerned, there are provision for decision for two or more mutually inclusive business endeavours to prefer over on another. It is actually a logical approach to adapt investment appraisal as decision making tool for investments. According to common definition of profit, an investor would risk its capital and assets for a reward that would be prefer to take. Methods of investment appraisals may be sometime contrary to that approach of risk taking. In true meaning an investor or investment bank actually incorporate that financial risk to a project for which investment is required. Regardless size of investing organization, financial risk or burden could be miscalculated so an inappropriate invest appraisal would be approve even thorough investment appraisal technique had been looked in carefully. 2.6 Literature Review Relevance to Research Topic: Researchers literature review combines with research topic, as for reason that every discussion in basic literature sources and academic debate clearly state problem area and complex implication of topic respectively. The dominant part, i.e. academic debate of literature review is strictly related to important aspects of research topic of investment appraisal. As for summarization of researcher’s argument on proposed topic, it is supported by Anon (2010; P4) in thesis; “Investments are the most critical aspect for the success of an organization. So that it has given the highest importance in financial management. It is because it’s impact upon the long term future of the business, the amount of scare resources utilized and degree of irreversibility. Misguided decisions can endanger the survival of the business and cause difficulties in obtaining additional finance from more costly sources.” Researcher review in literature has a reflection on his opinion which emphasize on final decision on investment appraisal, which coincide with above reference.
Research Proposal - Chapter 3 Chapter 3 3.0 RESEARCH METHODOLOGY Saunders et al, (2007) state within chapter 1 of nature of business and management research of “Research Method for Business Students” that there are different methods for researchers to follow their research proposal. However the term research methods or research methodology have been use to refer same techniques by researcher for their theories. Research method / methodology can be explain as entire process adopted to carry out step by step for a research in any field of studies either done in past or not is consider being a research methodology. Research methodology help researcher to perform various task under it chalk out researching methods and plan. 3.1 Research Philosophy: It is a pathway that a researcher adopts to peruse a goal for finding out a research required issue. In a categorically there are three main research philosophies and any researcher work may would have fall one or more of them; Epistemology: It is an acceptance of available existing knowledge of research study. This is more confined to research proposal in light of available research methodology. The researcher would only be specific of research topic to endorse his conclusive argument. Contrary to universal acceptance of investment appraisal in business projects could be challenge. Ontology: It is based at ongoing research exercise; researcher can use this to motivate research process. It gives researcher sense of progression in field of research study. During this research proposal new managerial discovery about investment appraisal in UK would have been discussed in more detail. Axiology: It is associated to ethical values of researcher with vary narrow margin of ethical difference in terms of organization one i.e. JP Morgan. This would have been explaining in detail later under research ethics in 3.5. Among from above three research philosophies out of that one philosophy in general and specific to that a philosophy position would be recommended by researcher for his research proposal’s methodology. In understanding research philosophy and approaches, Gill & Johnson, 2002 quoted in Saunders et al, (2007) that positivists normally gear their research methodology structure highly for critical synthesis, therefore researcher has chosen “Epistemology”, for his research philosophy. Best fit philosophy position would be “Positivism” or researcher would be “Positivist”. Researcher could not agree more to Gill and Johnson to underpin his reasons for adopting particular research philosophy position. Required research philosophy for proposal has to be extremely critical and sophisticated for all aspects of final research report (dissertation) that would be literature review, research methodology, data collection & analysis, finally conclusion and recommendations. Epistemology is recommended because researcher would have to seek existing knowledge from other source for proposed research topic. Stand point of positivist emphasize for research to become value free as far as it can. As well as hypothetical outcome of research would also confirms by general verifiable testing. Saunders et al (2007; P101), stated while explaining research philosophies in research methods for business students. “In part, the philosophy you adopt will be influence by practical consideration. However, the main influence is likely to be your particular view of the relationship between knowledge and the process by which it is developed.”
Research Proposal - Chapter 3 3.2 Research Approach: Identification of a research topic i.e. hypothetical theory which may not have adequate linkage to a research design as well as research strategy. As it is the case in researcher’s proposal where in its initial stage of research topic proposal work. Researcher was not too shore for finding best way to conclusive research. Saunders et al (2007; P117) state that “The extent to which you are clear about the theory at the beginning of your research raises an important question concerning the design of your research project”. But it is not necessary that only either approach should be use, infect Saunders et al (2007; P119) written that “Not only is it perfectly possible to combine deduction and induction within the same piece of research, but also in our experience it is often advantageous to do so”. Deductive: An approach in which researcher has developed a hypothetical theory which would be explicit to research topic or question. Researcher inclination for recommendation toward deductive approach is not preconceived notion instead it is a result of subconscious research paradigm. 3.3 Research Strategies: Research strategies refer to research format(s) in research methodology either for quantitative or qualitative conclusion or both. It is a clear cut approach to quantify or qualify a research area for fact finding so research outcome could be determine. Saunders et al (2007; P135) stated while discussing clear strategic of clear research. “Your choice of research strategy will be guided by your research question(s) and objectives, the extent of existing knowledge, the amount of time and other resources you have available, as well as your own philosophy underpinning”. Although several other type strategic research such as experiments, surveys, action, grounded theory and archival. Proposed Research Strategy: Nature of topic study is explanatory which deal with issue of cooperate financing. Therefore recommended explanatory research strategy is to be “Case Study”. Suitable data collection and analysing choice for research is multiple method choice combining qualitative and quantitative techniques and procedure, Curran and Blackburn, 2001 quoted in Saunders et al (2007 ;P145), State to “This choice is increasingly advocate within business and management research”. The time horizon accepted as Cross–sectional comparative case studies. Quantitative Data: It would be empirical data either in form of primary data which is already available in case study, books, journal article, or secondary data that would be collected in research by private investment banks data. Qualitative Approach: Qualitative analysis is interpretation of quantitative data in form of visual description. Case studies, past researches and writers conclusive opinion in written books can be consider as primary data. 3.4 Research Sample: A research sample is a true representative of population under examination. It is a miniature of large scale of examining event, survey or data which would be impossible to handle for analysis. A sample has to be collected carefully and define a sampling method critically for sanctity evaluation and authenticity. Researcher would be using a very suitable sampling method to challenge any critical fallout.
Research Proposal - Chapter 3 Sampling Methods: Researcher has to adopt probable sample method for particular type of research going underway. A probable sampling method could facilitate research topic justification. Field of research study also related to empirical and numerical judgemental standards for which a well collected and constructed statistical date by mean of impartial and unbiased procedure is imperative. To narrow down research sampling method is persuasive and dynamic conclusion and recommendations; researcher has to comply with “Stratified Sampling Methods” Henry, 1990 referred in Saunders et al (2007; P206), while elaborating need of sample that “using sampling makes possible a higher accuracy than a census. The smaller number of cases for which you need to collect data means that more time can be spent designing and piloting the means of collecting these data”. Probable Stratified Sampling: A pool of case studies would be collected from literature resources and then applied condition of stratum to low incident relativity, which are common strategic factors and condition effecting or affecting investment appraisal for that particular firm. 3.5 Research Ethics: These are code of conducting a research that, enable the researchers to perform in their field of study under specific guideline given by REF (research ethics framework) for economic and social research council. Important research related ethics issues should include following; Confidentiality: Research kept all the information relating to research from any vulnerable institution and business concern under strict secrecy under data protection act 1998. Anonymity: Research would not disclose any personal information under any circumstances. If ordered by court of law unless and otherwise will be remain anonymous. Reassurance: Researcher has provided a full confidence regarding research ethics framework to assure participant public and any institution for full practice of REF code. Any information would only be use merely for research purposes. Ethical issue of research would also be gaining access to organization of case study and in researcher field of study is investment banks i.e. JP Morgan and Merrill Lynch. Researcher would have to overcome organization concern about research. Researcher has to explain nature of research topic to gain access to such financial institution. Benefits of research should be well defined and self explanatory during conducting research within such organizations. Saunders et al (2007; P153), State to “The general ethical issue here is that the research design should not subject those you are researching (the research population) to embarrassment or any other material disadvantage”. 3.6 Research Reliability and Validity: Reliability and validity are two different but very significant yardsticks to claim research is reliable and validated. Data collection and analytical source of data has to be authentically reliable and presented in acceptable and proper format. Research Reliability: Reliability of research is proportional to consistency or repetition of similar result over and over again. The higher is degree of similarity in desire result the higher reliable or more reliable research would be. Researcher has to make some factor constant
Research Proposal - Chapter 3 during research or in control to reflect reliability of the research. Research reliability for researcher also means generalised findings, which indicate same finding for other researcher provided control research factor would be observe in their repeated exercise for outcome. Research Validity: Elimination of error to observation and finding in seen or unforeseen research circumstances will validate research outcome. The source of data collects that researcher would use as primary and secondary data would, may have glitches or error that may prevent research to become validated. So such type of erroneous and misleading observation would have to be filter and at the same time encounter any hidden threat to validity such as history and ambiguity. Saunders et al (2007; P149), explains credibility of finding in research as “All you can do is reduce the possibility of getting the answer wrong” and, “Reducing the possibility of getting the answer wrong means that attention has to be paid to two particular emphases on research design: reliability and validity”. Consistency Test for Reliability and Validity: To testify consistency in research finding through collected observing data researcher would choose Inter-Rater or Inter Observer Reliability. Research can be authenticated for reliability and validity by testing data observation on different scales of rater or observer in term of descriptive statistics.
Research Proposal - Chapter 3
RESEARCH PLAN CHART KEYS
Research Activity Not Started Research Activity Started Research Activity Continues
Research Activity Finished Research Activity Performed Cease Research Activity
RESEARCH ACTIVITIES EXTENSIVE LITERATURE REVIEW
DISSERTATION REPORT WRITING
RESEARCH TIME FRAME
JUN JUL AUG SEP OCT NOV DEC
APPLIED AVAILABLE RESOURCES British library, past student’s Work of Kaplan and LJMU, online web documents.
Simultaneous reporting of literature review and research methodology observations
DATA COLLECTION & ANALYSIS ACCESS TO INVESTMENT BANKS CONCLUSION &
REFLECTIVE STATEMENT DISSERTATION PRINTING & BINDING DISSERTATION SUBMISSION
x x x
Case studies, books, journals, online documents, news papers, investment bank’s data access. JP Morgan and Merrill Lynch. (contact personally and professionally) Based on research finding by literature review and data analysis under research methodology Based on dissertation experience and research outcome (stored soft copy of final dissertation) Reference to dissertation Printing and Binding Guide (calculative cost of two set of dissertation copies) Dissertation submi to Kaplan issertation submit
Research Proposal - Chapter 4
Personal Development Portfolio
Chapter 4 4.0 PERSONAL DEVELOPMENT PLAN (PDP)
4.1 Introduction: The researcher reflective report for his personal experience in doing research proposal is tight and narrow to learning outcome to demonstrate further learning skill in practice. This critical honest and true portfolio has three main development phases for researcher to reflect them in personal development portfolio; 1. What difficulties researcher had to undergo in preparing acceptable dissertation research proposal? 2. How difficulties have been overcome to handle the situations for acquiring and modifying latest research topic learning skills? 3. What reflection of self experience that, it would show on researcher portfolio to magnify his further research? 4.2 Difficulties in Research proposal:
i. Research Topic: It was a daunting challenge to choose a research topic initially of 5000 words to be accepted for proposed final dissertation of 20000 words. Due to fixed Kaplan schedule and also narrow selection criteria emphasize by supervisor Mr. Mo, choosing a topic on first instance was not easy. I had no pre-emptive filter or firewall to counter illusive and unrealistic research ideas; those could preoccupy my mental capabilities to distract me from a genuinely smart and intelligent research topic or idea. ii. Kaplan Coursework Strategy: Style of studies was new, rather different to previous college. Short span of just two and half month for concise learning came as a surprise for being a researcher it was not quite clear. Ambiguous and confused two different approaches in MBA studies i.e. research proposal and research topic. I lost many time with Kaplan’s provided RSA module literature in deciding which guideline to follow to exact framework for research proposal. iii. Research Proposal Format: Literature review and research methodology were two important and grade scoring parts, which required most of researcher attention. Al most 80% of time utilized in creating a flawless literature review and reliable methodology. Adopting different sources of literature either online or accessible written books profoundly obscure my reading abilities to understand and analyse the research topic at required level of research and academic studies. 4.3 i. Resolving Difficulties:
Research Topic: Studies in edexcel diploma for financial accounting assist me cut and lose so I could select and peruse an applied research topic in investment appraisal. Critical instruction and literature review assert my argument of research topic. Strictly sticking to main research idea help me concentrating on researching proposing the research topic. Kaplan Coursework Strategy: Adopting a different style of studies was solved with pragmatic learning approach. Kaplan’s reading material was referred multiple times to understand them thoroughly, to apply in a respective part of proposal. Tim’s arranged module papers and Mo’s instruction were synchronized for understanding simple course
Research Proposal - Chapter 4
Personal Development Portfolio
strategy. End term rescheduling of classes provided leap to finish proposal before deadline and review them in critically. iii. Research Proposal Format: Under supervision of Mo a dedicated research proposal work has been performed at Kaplan’s resource room. Consistence literature review had been done from online document searches such as emerald. Books were referenced at British Library on request in reading room. Mark Saunders book at Kaplan library was great source of establishing research methodologies for dissertation. 4.4 i. Skill by Learning Outcome:
Research Topic: I had successfully accomplished my first task of selecting a right topic within couple of week. It was evidence of self reliance that was supported by available online literature review to assert my research question. Selecting a proposed research topic right from the very beginning has given me self confidence to produce finest piece of research work for my final dissertation. Kaplan Coursework Strategy: Repeated reading of course handout by several time increases my knowledge and analyses for manoeuvring research topic in framework with research proposal standards. Ethical knowledge of research was gain during confinement of Kaplan’s resource room environment. Development of research work ethics have been emphasized under research proposal so a fair and free research result could be extract through my research dissertation. Research Proposal Format: Variety of literature resources e.g. online article and generals, books and other internet sources made literature review rather challenging and exciting. Writing proposal style has been developed as well structured and formatted as it should be accepted for final dissertation. Not only equip and enable me as a researcher for a well drafted future dissertation but also motivate for researching through literature and interacting in personnel. Research Ethics By-Product Learning Outcome: Except outlined learning outcome skills discuss in 4.4, in a capacity of researcher I have been privileged to acquire further more research knowledge. The main sources of these segregated research ethics knowledge’s from research methodology are my fellow students. The overview of earlier student’s final dissertations have served this ethical knowledge to prepare myself for getting onboard with my last preparation and submission of most required final dissertation. 4.5 PDP Conclusion: I had gone through an exceptional self understanding of research philosophy of learning research process. It was immensely appreciated to become researcher within myself. It was also a accomplish feeling of self realisation for understanding entire phenomenon of research philosophy which infect cannot be learned in just a research proposal, instead it illuminated researcher thinking of idea. Motivation, self confidence and reliance for research are basic foundational pillars which have been acquired through practical experience that could also be reflected in final dissertation.
Bibliography Anon. (2010) investment Appraisal Thesis. [online] Scribd http://www.scribd.com/doc/6049030/Investment-Appraisal-thesis. [Accessed 29th March 2010]. Carr and Tyson. (1992) cited in: Linda C.l, Angel and Chandra, M. Jeya (2001) Performance Implications of Investments in Continuous Quality Improvement: Published International Journal of Operations Production Management. thesis, Pennsylvania State University. Curran and Blackburn. (2001) cited in: Saunders, Mark et al. (2007) Research Methods for Business Students. 4th edition. Harlow, Pearson Education Limited. Dimson and Marsh. (1994) cited in: Drury, Colin and Tayles, Mike (1997) The Misapplication of Capital Investment Appraisal Techniques: Published Management Decision. thesis, University of Huddersfield. Drury C. and Tyles M. (1997) cited in: Anon (2010) Investment Appraisal Thesis. [online] Scribd http://www.scribd.com/doc/6049030/Investment-Appraisal-thesis. [Accessed 29th March 2010]. Drury, Colin and Tayles, Mike (1997) The Misapplication of Capital Investment Appraisal Techniques: Published Management Decision. thesis, University of Huddersfield. Finnie (1988); Hodder et al (1985); Kaplan (1986) cited in Drury, Colin and Tayles, Mike (1997) The Misapplication of Capital Investment Appraisal Techniques: Published Management Decision. thesis, University of Huddersfield. Gill and Johnson. (2002) cited in: Saunders, Mark et al. (2007) Research Methods for Business Students. 4th edition. Harlow, Pearson Education Limited. Lumby, Stephen and Jones, Chris. (2001) Fundamentals of investment appraisal. London, Thomson Learning. Margavio et al (1993) cited in: Linda C.l, Angel and Chandra, M. Jeya (2001) Performance Implications of Investments in Continuous Quality Improvement: Published International Journal of Operations Production Management. thesis, Pennsylvania State University. Moran, Kate. (2000) Investment appraisal for non-financial managers : a step-by-step guide to making profitable decisions . London, Prentice-Hall. Saunders, Mark et al. (2007) Research Methods for Business Students. 4th edition. Harlow, Pearson Education Limited. Savvides, Savvakis C. (1994) Risk Analysisin in Investment Appriasal. Published Project Appraissal. thesis. Cyprus Development Bank. The Time 100 12 Edition. (2010) Investment Appraisal. [online] The Time 100. http://www.thetimes100.co.uk/downloads/theory/investment_appraisal.pdf. [Accessed 29th March 2010]. West, C and Stein, N. (1997) Investment Appraisal. London, Chartered Institute of Management Accountants.