CHAPTER 3

3.1 INTRODUCTION

In order to obtain evidence that helps to strengthen a study, the research methodology needs to
be done using the method of designing, collecting and analyzing a data obtained. The purpose of
this methodology needed in the study is to help more understand in more detail in providing an
explaination and description of the process of this study (Hassan, 2015).
Research methodology is an important aspect in conducting research because it is one of
the most appropriate and effective ways to answer research problems (Naoum, 2013). Therefore,
the planned study method should involve the research design, procedure, research framework,
data retrieval procedure and data analysis procedure. Based on the Dictionary of Dewan Bahasa
dan Pustaka, methodology also carries the meaning of methods, techniques, patterns and
systems. This includes specific ways to achieve the desired goals while conducting the study.
Apart from that, in addition to explaining the research methodology, this chapter also
explains about the background of the selected study area, factors and reasons for the selected
area and explains about the research method that is qualitative study and quantitative research
suitable for this study.
 Problem Identification

Research Objectives
 To examine the factor affecting contractor cash flow.
 To identify the strategies to manage cash flow in the construction project.

Research Scope
 Malaysian Contractor G7 in Selangor

Literature Review
Primary Data
 Quantitative- Questionnaire will be distributed to the local contractor for
both objectives.
Secondary Data
 Journal
 Book
 Annual Report

Data Analysis
Quantitative Method:
 Calculation of percentage and mean were used.
 SPSS and Microsoft Excel were used to assist the calculation.

Research Findings
 Respond rate
 Descriptive Analysis
 Discussion

Conclusion and Recommendation

Flow chart of research methodology

3.2 Research Method
The objectives of the study can be achieved through the order of processes in the methodology
identified as the design of the study. The process found in the study design shows that the flow
of data collection activities is done in sequence to find a solution to the problems of the study.
According to Naoum (2013), study design is the framework used by a study to collect and
analyze data.
Based on Sidin (2005), this study is conducted according to the rules of the study
methodology that has been set. At the initial study stage, an introductory process to the study was
conducted. Followed by the process of development of research theory involved in the literature
study as well as the stage of data collection which is divided into two parts, namely primary data
and secondary data. The fourth stage is data analysis and research findings. The fifth stage is the
conclusion stage of the overall study along with the recommendations.
Initially, the researcher will provide a question structure to obtain information related to
the factor affecting contractor cash flow and proposed strategies to manage cash flow in the
construction project. This can ensure that the objectives of the study will be achieved at the end
of this study and focus on the objectives of the study set.
This study uses quantitative methods. This method uses a questionnaire instrument that
will be conducted to G7 contractors in Selangor to answer the research questions. Questionnaire
is an approach used to obtain a clearer understanding between researchers and respondents
because it is more flexible and effective. In addition, the researcher used the same question to all
respondents to facilitate it to be understood by the respondents and the researcher ensures that all
respondents are ready and have some knowledge during the questionnaire.
After this questionnaire is conducted, the researcher will provide a conclusion based on
the answers obtained from the G7 contractors related to cash flow in the construction project.
The summary will be evaluated and studied to ensure that the findings obtained are appropriate
and achieve the objectives of the study as well as in accordance with the expectations of the
researcher at the end of the study (Hassan, 2015).
However, in order to obtain accurate research results, the researcher needs to choose the
research strategy correctly and in accordance with the researcher's research objectives. Otherwise
the findings of the study are not strong and will affect the objectives of the study. The
unanswered research questions mean that the objectives of the study have not been achieved.
Therefore, this study uses case study as a study strategy and further explanation will be described
in the next chapter (Naoum, 2013).

Stage 1: Preliminary Study

At this stage, the study begins with conducting some preliminary studies. The main purpose of
this stage is to gather some initial information about the research. The initial information meant
is to identify the background of the study, identify the problem statement, identify the research
questions and objectives of the study.

Stage 2: Literature Review

This stage is the stage of gathering information about the study through reading such as books,
journals, online links and others. At this stage, data involving the factor affecting contractor cash
flow and strategies to manage cash flow in the construction project will be collected from several
sources of past researchers. Further data collection continues related to strategies to manage cash
flow in the construction project will be collected. Finally, all information about cash flow in the
construction project obtained will be used as additional reference. All the elements identified in
this literature review can help researchers in formulating interview questions.

Stage 3: Data Collection

The data collection process is divided into two parts namely primary data collection and
secondary data. Primary data collection is through quantitative methods performed with a
questionnaire process to the study respondents. Secondary data collection is done by collecting
information from sources such as books, journals, online links, newspapers and others.

Stage 4: Data Analysis

This stage is to obtain data analyzed from the questionnaires implemented. The data analyzed
were based on the responses to the questionnaires. The data obtained will be analyzed using
Misrosoft Office Excel to obtain the exact percentage. The results of the data will be translated in
the form of graphs to make the data easier for the reader to read. A description of the study
results will also be made based on the graph presented.
Stage 5: Recommendations and Conclusions
This stage is the final stage in the process methodology of the study. At this stage, conclusions
on the study are made comprehensively and suggestions for future improvement are also
proposed. This stage will also discuss the limitations of the study that need to be improved in
future studies.

3.3 Data Collection Methods

Data collection for this study was done using two different types of data as below:

3.3.1 Primary Data

Primary data is data obtained directly from identified sources such as questionnaire method,
respondents were selected based on their experience in the field of construction while facing
problems related to payment in previous construction projects. This is to enable researchers to
get experience and insights from the contractor as well as what are the main factor affecting
contractor cash flow. This questionnaire is also to obtain the appropriate strategy to manage cash
flow in the construction project among contractors.

3.3.2 Secondary Data

For secondary data obtained through references from previous studies, articles, journals, books,
websites and everything related to cash flow in construction project. Literature review is a
platform for the selection of information taken from databases for example google scholar,
academia.com, emerald and all related to contractor cash flow in the construction industry. The
collection of secondary data is important to help provide support for the primary data so that the
information or content of the primary data is more authentic. The results of secondary data will
further help strengthen the information and facts obtained from the study as well as help
researchers produce quality research.
3.4 Research Instruments
3.4.1 Questionnaire Form
This study uses quantitative methods and questionnaire instruments to obtain all data related to
the study from the respondents who have been selected, namely the G7 contractor in Selangor.
This questionnaire is made based on the objectives of the study that have been set.

No Objectives of the study Data Instrument

1. To examine the factor affecting The factor affecting Questionnaire
contractor cash flow. contractor cash flow
2. To identify the strategies to manage cash Strategies to manage Questionnaire
flow in the construction project. cash flow in the
construction project.

Based on Table , this questionnaire will be break down into several parts, namely:

Part A: Background of the respondent

Part B: The main factor affecting contractor cash flow.
Part C: Strategies to manage cash flow in the construction project.

3.4.2 Questionnaire Measurement Scale

According to Hua (2016) there are four (4) types of measurement scales commonly used in a
study, namely nominal scale, ordinal scale, interval scale and ratio scale. For this study nominal
scale and ordinal scale will be used as measurement scale. Nominal scale is a scale used based on
numbers to determine the category of a variable. The nominal measurement scale is used in
section A to determine the demographics of the respondents related to gender, level of education,
position and work experience. Ordinary measurement scale also involves data compiled from
small numbers to large numbers, where small numbers will represent small values (Hua, 2016).
The ordinal scale uses a likert scale to obtain a true picture related to the respondents' feedback.
The likert scale will be used in part B and part C where the respondent can only choose one
answer for each question based on the five answer choices provided. The following shows the
scale to be used in part B and part C.
 Score Value 1 2 3 4 5
Likert Scale Strongly Disagree Neutral Agree Strongly
Disagree Agree

3.5 Research Population

A population is a large group of individuals to be studied. It can also involve an object or
something to be studied (Chua, 2010). The population for this study is the G7 contractors in the
state of Selangor. This is because based on the statistics obtained from the annual report of
the….. clearly shows that Selangor has the highest total….. This means that the population of
this study is a total of 112 G7 contractors in Selangor. Respondents for this study are among the
employees of the contractor such as project managers, engineers, engineers and so on. The
selection of respondents in this area aims to obtain information from respondents in more depth
about the use of cash flow in construction project. In addition, a study was conducted in the
following areas to find out the factor affecting contractor cash flow and the strategies to manage
cash flow in the construction project. .

3.6 Research Sampling

In this study, research sampling is a process of selecting a section such as a unit, group, part or
an organization from a population that needs to be studied as a sampling to obtain data.
According to Chua (2010), data sampling is one of the most important aspects in a
methodological study because the use of samples will affect the validity and reliability of the
data obtained. This is because, inappropriate sampling of data will reduce errors as well as
reduce trust in the sampling of the data. The study sample will be taken from a predetermined
population only will receive the questionnaire of this study. Based on the population of
respondents involved in the sampling of this study are G7 contractors in Selangor which is a total
of 112.
According to Krejcie & Morgans’s (1970), a total of 86 respondents were chosen randomly from
the targeted population of contractor G7 under CIDB. The total sample of the study was selected
according to the sample size determination table Krejcie and Morgan (1970) as stated below:

Population Size Sample Size Population Size Sample S

10 10 70 59
15 14 75 63
20 19 80 66
25 24 85 70
30 28 90 73
35 32 95 76
40 36 100 80
45 40 110 86
50 44 120 92
55 48 130 97
60 52 140 103
65 56 150 108

Sample size of a known population (Krejcie & Morgan, 1970)

3.7 Pilot Study

Based on Dollah (2015), a pilot study is a study conducted at the initial stage of a study that aims
to test the level of validity and reliability of the study conducted as well as to ensure that the
actual study can be conducted smoothly. This study is usually done on a small scale in order to
be a yardstick to measure the level of understanding of respondents regarding the questions to be
asked (Dollah, 2015). This pilot study also aims to identify the level of suitability, shortcomings
and improvements that need to be made in relation to the questions contained in the
questionnaire before the actual study is conducted.
For this study, a total of 10 respondents consisting of contractors in Selangor were
randomly selected for this pilot study. This pilot study was conducted to assess whether the given
questionnaire questions are easy to understand and appropriate to the given topic or not.
Improvements will be made based on comments and views from them before the actual
study is conducted. Respondents need to read and give their views from all angles such as
content, format, language used and so on. If the respondent answers all the questions provided in
the questionnaire, it means that the question is easy to understand and vice versa. Based on the
comments given, improvements were made as soon as the comments were given by the
respondents to ensure the smooth running of the actual study. The following is a table of pilot
study results conducted to respondents.

Table 3.4 Pilot study data that have been conducted

No Respondent Method Comment

Whatsapp and email The statement is easy

to understand

Improvements in
Whatsapp and email terms of content,
content needs to be
added and appropriate

The statement is easy

Whatsapp and email to understand but
there is a less clear
use of sentences
3.8 Data Analysis

In this study, the researcher used the quantitative method as a method to process and analyze the
data obtained. Quantitative method uses a questionnaire instrument as a method to obtain data
from respondents. All information and data obtained in the quantitative will be used to analyze
the data to obtain the required study results in accordance with the study.
The quantitative method as a technique to analyze this data is very complicated because it
involves several processes where the researcher has to send a questionnaire form to the
respondent to obtain further information. The information obtained should be recorded as
research data before the data needs to be analyzed through the results of a questionnaire between
the researcher and the respondents. All information obtained from respondents should be studied
and analyzed carefully and in detail to obtain correlations to achieve the objectives of the study.
All data and information obtained from the questionnaire will be carefully analyzed in
percentage form using Microsoft Office Excel. This data analysis aims to achieve the objectives
that have been set which is to identify the factor affecting the contractor cash flow and the
strategies to manage cash flow in the construction project. The data collected is to obtain
evidence of the study conducted. The results of the data will be provided in the form of graphs to
make it easier to understand.

3.9 Conclusion
In conclusion, the methodological research process is done to gather information regarding the
topic of study. Literature review was conducted to obtain information related to the factor
affecting the contractor cash flow and the strategies to manage cash flow in the construction
project. This chapter discusses the method of this study is implemented, this study uses
quantitative method because this method is suitable for this study. It also contains a framework
in which the study will be applied regularly and in accordance with the objectives of the study. In
addition, procedures on how case studies are conducted are discussed. This chapter also
describes the data collection, steps or procedures of how the data analysis process is
implemented to obtain accurate data. To obtain information and data for this study, the
questionnaire was implemented based on the objectives of the study. The respondent for this
study is a G7 contractor in Selangor. Finally, the procedures and steps of analyzing the
information are also described in this chapter.