Chapter 3: Theoretical Framework & Research Methodology

3.1 Research Methodology Research in common parlance refers to a search for knowledge. The Advanced Learners Dictionary of Current English lays down the meaning of research as a careful investigation or inquiry specially through search for new facts in any branch of knowledge. (The Advanced Learners Dictionary of Current English, Oxford, 1952) Redman and Mory define research as a systematized effort to gain new knowledge. (L.V. Redman and A.V.H. Mory, The Romance of Research, 1923). Research is an academic activity and as such the term should be used in a technical sense. According to Clifford Woody research comprises defining and redefining problems, formulating hypothesis or suggested solutions; collecting, organizing and evaluating data; making deductions and reaching conclusions; and at last carefully testing the conclusions to determine whether they fit the formulating hypothesis. Research methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. In it the researcher studies the various steps that are generally adopted by a researcher in studying his research problem along with the logic behind them. The research topic is to find the Factors that influence the online buying behavior of Malaysian professionals. The research methodology that will be adapted in the research is Quantitative and Deductive research. 3.2 Research Method: Quantitative Research A choice between research methods rests fundamentally on a set of decisions about the questions a researcher wants to answer and the practicality of gathering the kind of data that will answer those questions. The first step is to look for an obvious fit. Although there are a number of soft differences between the two types of methods, there is one very important distinction. Quantitative research is deductive and hinges on the presence of a hypothesis, which is identified before research begins. Qualitative research is inductive and does not require a hypothesis in order to start the research process.

Quantitative research looks at the general case and moves toward the specific. In quantitative research your aim is to determine the relationship between one thing (an independent variable) and another (a dependent or outcome variable) in a population. The respondents in this research are working professionals in Malaysia who have been using online shopping or have heard of online shopping. In this quantitative study the aim is to determine the relationship between Malaysian professionals online shopping behavior intension and that factors influencing online shopping i.e. attitude, subjective norm, perceived behavior control, trust and perceived risk. 3.3 Research Approach Deductive Deductive approach is a top-down approach that works from the general to the specific. In empirical research, that means that a market researcher begins a study by considering theories that have been developed in conjunction with a topic of interest. This approach lets a market researcher think about research that has been already been conducted and develop an idea about extending or adding to that theoretical foundation. From the topical idea, the market researcher works to develop a hypothesis. This new hypothesis will be tested by the market researcher in the process of conducting a new study. Specific data that has been collected and analyses in the new study will form the basis of the test of the hypothesis. The specific data will either confirm the hypothesis or it will not. The researcher begins the study by reviewing various factors and adoption theories TRA, TBP and TAM that were used in the context of online shopping behavior intention. Finally, the researcher narrows down the research to make an extension of TPB with trust and perceived risk to better predict consumers behavior intention by investigating the on-line shopping patterns of working professionals in Malaysia.

3.4 Research Philosophy - Positivism When starting a study there must be an understanding of in which way the study will be approached. The established research philosophy explains this approach when collecting and analyzing data. Positivism is the approach where the researcher does not want to be affected by nor affect the subject of the research. (Saunders, Lewis & Thornhill, 2007). The researcher believes that the collected and analyzed data can be simplified to a law like generalization using existing theories to develop hypotheses from these. The research will be conducted with a positivistic approach, since the researcher will try to affect and interfere with the collected data as little as possible. 3.5 Research Strategy - Survey There are three distinct conditions that will affect the choice of research strategy: The type of research questions asked, the extent of control an investigator has over actual behavioral events and the degree of focus on contemporary events. According to Yin (1994) there are five different strategies for the research, of course each one has both advantages and disadvantages. The five strategies are an experiment, a survey; history, an analysis of archival records and a case study. Table 3.: Relevant Situations for Different Research Strategies

Since the aim of this study is to collect the answers from a large scale of working professionals who have shopped online or have not shopped online and formulate the main factors that affect the behavior intention to adopt online shopping, the researcher has mainly chosen a survey as the research strategy. This choice is partly determined by the research approach, which to most extent is of quantitative nature. A survey is an appropriate strategy due to the fact that the aim is to answer who, where, how many, or how much or what questions. There is no faster, more affordable way to conduct a survey irrespective of size. Furthermore, due to the quantitative nature of this study, a survey is appropriate because of its quantitative character.

3.6

Theoretical framework

The Theoretical framework to examine the factors that influence the online buying behavior of working professionals in Malaysia is built using TPB model, which is a very powerful and parsimonious model for explaining and predicting online buying behavior. To the TPB model adding the concept of trust and perceived risk will improve the predictive ability of the model to investigate the driving factors influencing the online shopping behavior in Malaysia. A theoretical framework as illustrated in Figure 1 is developed, which forms the foundation on which the entire research will be based upon. Secondly, Dependent variables and independent variables refer to values that change in relationship to each other. Dependant variables are those that tend to change in response to the independent variables. Independent variables are those that are deliberately manipulated to invoke a change in the dependent variables. The Theoretical framework as shown in Figure 1 will have a dependant variable which is the online shopping behavior intention, is influenced by a set of independent variables: Attitude, Subjective Norm, perceived behavior control, Trust and Risk. The independent variables attitude, subjective norm, perceived behavior control, trust and perceived risk will be evaluated on whether their individual affects would be significant to influence the online buying behavior intention of the prospective Malaysian working professionals. The independent variables are believed to be the variables that influence the

dependent variable (online shopping behavior intention) in either a positive or a negative way.

Theory of Planned Behavior Attitude

Subjective Norm

Perceived Behavioral control

Online Shopping Behavior Intention

Trust

Risk

Figure 1:

Research Framework

3.7

Research Hypothesis

In the study the researcher outlines the following five hypotheses in order to determine whether the factors highlighted has significant influence on the behavior intention of Malaysian working professionals to shop online: Attitude towards the behavior is defined by Ajzen (2006) as a persons overall evaluation of performing the behavior in question (p.5). According to TPB studies, attitude towards behavior generally affects the intention more than the dimensions of subjective norm and perceived behavioral control (Ajzen, 2008).

The attitude dimension depends on an individuals salient behavioral beliefs, which represent perceived outcomes or attributes of the behavior (Conner and Armitage, 1998). Krueger et al. (2000) suggested that intentions successfully predict behavior and attitudes successfully predict intentions. Regarding online shopping, George (2004) emphasized that perceived risks of online shopping, privacy issues, and trustworthiness were the factors that influenced attitudes towards Internet purchasing. Additionally, Lim and Dubinsky (2005) claimed that on-line consumers may well rely more on personal evaluations of commercial Web sites than on external factors. Across a wide range of studies relating to a wide variety of types of behaviors and the intentions to engage in those behaviors, attitudes explain over 50% of the variance in intentions (Ajzen, 1987). The more positive the attitude, the greater is the intention. Based on the above explanations the following hypothesis is formulated: H1: Attitude towards online shopping is positively related to behavior intention to shop online. Subjective norms refer to an individual's perception of whether people who are important to him or her think that he or she should or should not perform the behavior in question (Ajzen and Fishbein, 1980). They are the function of how a consumers referent others (e.g., family and friends) view the regarding behavior and how motivated the consumer is to comply with those beliefs (Lim and Dubinsky, 2005). In the review of 185 independent studies dealing with TPB, Armitage and Conner (2001) showed that subjective norms were a weak predictor of behavioral intentions. Yet, Thorbjornsen et al. (2007) and Kwong and Park (2008) indicated that subjective norms may be more important for young people. Wang et al. (2009) confirmed that subjective norms related to peer groups may be more important for teenagers when it comes to illegally downloading music from the Internet. One of the European Journal of Social Sciences Volume 19, Number 4 (2011) 531 reasons given to account for these findings was the susceptibility of young users at the social development and learning stage to social influence.

Considering the fact that Malaysian culture is more collectivist than individualist (Triandis, 1995) and that collectivists are more likely to comply with others than are individualists, the researcher thinks that the proper model of IT adoption for Malaysian customers should include the subjective norm construct. Furthermore, Hartwick and Barki (1994) suggested the effect of subjective norms to be more significant in the initial stages of system implementation. Since the online shopping has been developed recently so it is at the initial stage of implementation and therefore the researcher expects that subjective norm affects the intention to use the online shopping. So, the following hypothesis is formulated: H2: Subjective norm is positively related to behavior intention to shop online. Perceived behavioral control is defined as an individuals confidence that he or she is capable of performing the behavior (Ajzen, 2006). The perception of volitional control or the perceived difficulty towards the behavior will affect intent (Chang, 1998). Unless control over a behavior exists, intentions will not be sufficient as the predictor of the behavior (Sahni, 1994). Factors such as skills, abilities, time, and requisite information play a significant role in predicting and performing the behavior. Keen et al. (2004) investigated the consumers retail format preferences and found that perceived behavioral control as one of the key elements in the consumer purchase decisionmaking process. Similarly, Lim and Dubinsky (2005) hypothesized that perceived behavioral control will be positively associated with consumers purchase intention on the Internet. Yet, in a sample of college students, Kwong and Park (2008) found that the effect of perceived behavioral control on intention was insignificant. They claimed that college students are a wired generation; therefore, computer literacy and knowledge of Internet services are now common skills among them (p.1476). Thorbjornsen et al. (2007) highlighted this argument and stressed that external control factors such as financial resources might be more important for young users than internal control factors such as abilities and skills. Based on the above explanations the following hypothesis is formulated:

H3: Perceived behavioral control is positively related to behavior intention to shop online. Trust can be defined as the willingness of a party to be vulnerable to the actions of another party, expecting that the other is going to perform a particular action important to the trustor (Hassanein & Head, 2007). Consumers have concerns about using the internet to purchase online because of the safety issues. Consumers' trust of e-vendors and internet technology are key factors that influence beliefs about safety (Ha& Stoel, 2009). Trust is the extent to which one believes that the new technology usage will be reliable and credible (Ha & Stoel, 2009; McKnight & Chervany, 2001). This means that the trust in both the online vendor and the online technologies generates consumers' beliefs about the safety of shopping online. Its more critical in the online shopping context than in brick-and-mortar stores (Grewal, Lindsey-Mullikin, & Munger, 2004; Ha & Stoel, 2009). Results from previous studies support trust as an antecedent of attitude (Chen & Tan, 2004; Suh & Han, 2002), and behavioral intention (Ha & Stoel, 2009; Pavlou, 2003; Suh & Han, 2002; Gefen & Straub, 2003). Trust in online vendor and satisfaction with his services both determine future sales opportunities in online environment. Establishing trust is especially important in the online environment to positively impact consumers attitudes and purchasing intentions (Corritore, Kracher, & Wiedenbeck, 2003; Gefen et al., 2003). Internet shopping is a new form of commercial activity, which tends to involve a higher degree of uncertainty and risk when compared with traditional shopping. Internet stores appear to be less well known to consumers, as they cannot physically examine the quality of the products before making a purchase, nor can they fully monitor the safety and security of sending sensitive personal and financial information through the Internet to a party whose behaviors and motives may be hard to predict (Lee and Turban, 2001). Thus, the concept of trust becomes very important in the context of online consumer behavior. Trust refers to the confidence a person has in his or her favorable expectations of what other people will do, based, in many cases, on previous interactions (Gefen, 2000). A significant number of studies (George, 2002; Heijden et al., 2001; Pavlou and Chai 2002) found that trust is a salient determinant of online shopping attitude. Moreover, Lynch et al.,

(2001) found that trust significantly affects a potential consumers intention to shop online. The following hypotheses are formed as follows: H4: Trust has a positive impact on consumers behavior intention toward on-line shopping. Since 1960s, perceived risk has been used to explain consumer behavior in decision making process. Kim, Ferrin, and Rao (2008) defined perceived risk as a consumers belief about the potential uncertain negative outcomes from an online transaction. With the increasing popularity of online shopping the definition of perceived risk has also undergone a change (Chang & Chen, 2008); today it refers to certain types of financial, product performance, social, psychological, physical and time risks experienced by the consumers while making transactions online (Corbitt, Thanasankit, & Yi, 2003; Lim, 2003; Mitchell, 2001) whereas, in past, it was regarded as fraud and product quality (Wu & Wang, 2005). Perceived risk is a multi-dimensional construct; the literature is replete with examples where dimensions of perceived risk have been explored in detail, these dimensions include: financial risk, performance risk, psychological risk, physical risk, social risk, and time risk. An online shopper is reluctant to make a purchase because he/she may have concerns like privacy apprehensions, security ambiguity, expenses of returning the product, hidden costs, any financial loss because of the lack of protection of consumers credit card number; difficulty in getting money back (Akram, 2009). Risk perception towards an internet store is negatively associated with consumers willingness to buy online (Choi & Geistfeld, 2004). Considering the relationship between perceived risk and consumers behavior intention there is an inverse relationship between perceived risks and consumers intention to try the product whereas reputed website brand and its high quality alleviate the consumers concerns regarding perceived risk. The following hypotheses are formed as follows: H5: Perceived Risk has a negative impact on consumers behavior intention toward on-line shopping

3.8 Primary Research Data Primary data refers to collect the data for specific research or study for the first time, primary data did not exist before. Thus, a disadvantage of primary data is that it can be longer and more expensive than the secondary data. (P. Kotler & G. Armstrong, 2010) According to Wiid and Diggiines (2009) primary data for quantitative research can be collected using surveys, observations and experiments. The primary data collection will include a survey questionnaire. Questionnaire was chosen as the key methodology since the researcher, intends to gather information from a large group of working professionals in Malaysia within the tight research timeframe. A data sampling of 120 Malaysian working professionals will be conducted using Statistical Analysis (SPSS) software. In addition, questionnaire is an excellent way to document for future references and relatively cheap way of distributing to prospective online shoppers in Malaysia through email. 3.9 Research Sampling Snowball Sampling is a method used to obtain research and knowledge, from extended associations, through previous acquaintances, Snowball sampling uses recommendations to find people with the specific range of skills that has been determined as being useful. An individual or a group receives information from different places through a mutual intermediary. This is referred to metaphorically as snowball sampling because as more relationships are built through mutual association, more connections can be made through those new relationships and a plethora of information can be shared and collected, much like a snowball that rolls and increases in size as it collects more snow. In the study the researcher will use snowball sampling, as it is a useful tool for building networks and increasing the number of participants. However, the success of this technique depends greatly on the initial contacts and connections made. Thus it is important to correlate with those that are popular and honorable to create more opportunities to grow, but also to create a credible and dependable reputation. 3.10 Research Subjects

Sampling design begins by specifying the target population. This is the collection of elements or objects that possess the information sought by the researcher and about which inferences are to be made (Malhotra and Briks 1999). The research subjects in the study are Malaysian working professionals. Snow ball sampling approach will be used to reach a large number of working professionals diversified in Malaysia. 3.11 Research Questionnaire The questionnaire design was selected vigilantly with consideration to individual questions, pleasing outline along with a reasoned explanation of the aim of the research. The questionnaire will be close ended with clear choice of responses for each question. These answers are fairly easy to scrutinize. The survey questionnaire is created to fit with the objectives of the study and theoretical model. The purpose is to derive clear and succinct statements as a part of the questionnaire design to diminish if not eradicate misapprehension from any respondents. However, participants may misconstrue some questions. Therefore a pilot test based on the draft questions was conducted to detect misunderstanding from preferred respondents. Based on the reply received for the questions in the pilot survey the questionnaire was further simplified and polished to receive accurate responses. This was to guarantee affirmative effect on the response rate and the reliability and validity of the data collection. The survey questionnaire comprised of two parts 1) Demographic profile of the respondents This part of the questionnaire is designed to obtain needed information about the demographic characteristics of prospective Malaysian working professionals like his/her age group, education level and profession and income group. 2) Evaluation of the five predictors. In this section of the questionnaire, it contains 25 questions of which five questions are derived for each element of the factors

that influence the online buying behavior. The questions are distributed evenly with 5 questions per element as tabulated in the below table: Distribution of questions per element Factors influencing online buying behavior 1. Attitude 2. Subjective norm 3. Perceived behavior control 4. Trust 5. Perceived risk Questions 1-5 6-10 11-15 16-20 21-25

In the study the researcher will be collecting prospective Malaysian working professionals responses in this part of the questionnaire to analyze in general the factors that influence the online buying behavior, so that the significant variables will be analyzed and can be used by E-marketers to plot a persuasion strategy to make prospective consumers to shop online. 3.12 Research Questionnaire Scaling Method The scaling method used in the study is LIKERT scale. The participants were asked to indicate their perception on a LIKERT scales with response ranging from "strongly disagree" to "strongly agree". Respondents were asked to indicate their level of agreement with each of the given statements by way of an ordinal scale. Each level on the scale is assigned a numeric value as defined below 1 Strongly Disagree, 2 Disagree, 3 Neutral, 4 Agree, and 5 Strongly Agree.

3.13 Questionnaire Reliability & Validity

Validity is the degree to which a test measures what it claims to measure. Reliability refers to the consistency of a measure's results for each application of the measure.

Reliability and validity (UCLA, n.d.)

In the three figures above, the bulls-eye of the target corresponds to the target reading of the instrument and the holes in the target represent multiple objective measurements of the instrument. In the first figure, the measure is reliable - it measures nearly the same value each time. But the measure in Figure 1 is not valid - the average of the scores is not close to the target reading. In the second figure, the scores are not very reliable - there is a lot of variability in the scores, but they center around the target reading, so they are valid (at least on average). In the third figure, the measure is both reliable and valid. The term accuracy is often used in relation to validity, while the term precision is used to describe reliability. Cronbach's alpha is a measure of internal consistency, that is, how closely related a set of items are as a group. A "high" value of alpha is often used (along with substantive arguments and possibly other statistical measures) as evidence that the items measure an underlying (or latent) construct. Technically speaking, Cronbach's alpha is not a statistical test - it is a coefficient of reliability (or consistency). Cronbach's alpha can be written as a function of the number of test items and the average inter-correlation among the items.

Below, for conceptual purposes, the researcher shows the formula for the standardized Cronbach's alpha:

Here N is equal to the number of items, c-bar is the average inter-item covariance among the items and v-bar equals the average variance. One can see from this formula that if you increase the number of items, you increase Cronbach's alpha. Additionally, if the average inter-item correlation is low, alpha will be low. As the average inter-item correlation increases, Cronbach's alpha increases as well (holding the number of items constant). (UCLA n.d.) 3.14 Administration of the Questionnaire The research began with a pilot study on 15 Malaysian working professionals. These sample groups known as computer literate, highly knowledgeable in areas pertaining to Electronic Commerce and more likely to conduct online shopping. The pilot study was conducted in order: (i) to check for the relevance of the variables selected, (ii) to check the validity of the questionnaire, and (iii) to see the reliability of the questionnaire. Sets of preliminary questionnaire were sent by email to the respondents and their responses on the online shopping, and the factors influencing and inhibiting when browsing or purchasing through the Internet, were taken into contention. It was conducted to determine the content validity, i.e. the sampling adequacy of the content of a measuring instrument (Kerlinger, 1979).After the survey was administered, the data were assessed for reliability and construct validity using Cronbach Alpha (Nunally 1978) in SPSS. Summary of scores for the decision making processes are being summarized in the below table.

Attitude Questions Response Resp 1 Resp 2 Resp 3 Resp 4 Resp 5 Resp 6 Resp 7 Resp 8 Resp 9 Resp 10 Resp 11 Resp 12 Resp 13 Resp 14 Resp 15
1 5 3 2 4 4 5 4 4 4 2 5 4 4 5 4 2 4 3 3 3 4 3 3 4 3 3 4 4 4 4 5 3 3 4 3 3 3 4 4 3 3 2 4 4 3 4 3 4 3 3 4 3 4 4 4 5 3 2 4 4 5 4 4 5 4 2 2 5 3 5 4 5 4 2 4 5 5 4 4 6 5 3 1 4 2 4 5 4 5 1 5 4 4 5 5

Subjective Questions
7 5 3 2 3 3 3 4 4 4 2 3 4 3 4 4 8 4 2 3 3 2 3 3 4 3 2 4 4 4 4 3 4 3 2 4 2 3 4 4 4 4 4 4 3 4 4 4 3 2 3 2 3 4 4 4 3 3 4 4 4 3 3 2 2 4 3 4 4 5 3 3 4 4 4 4 4

Perceived Questions
4 3 2 4 3 4 4 4 4 3 4 3 3 4 4 4 3 3 4 3 4 3 3 4 3 4 3 4 4 5 3 2 3 4 3 3 3 3 4 1 4 4 3 4 3 4 1 2 3 3 4 4 4 4 3 4 3 4 4 3

Perceived Trust Questions

4 2 2 4 2 3 4 4 3 2 3 5 3 3 4 5 3 2 4 2 4 4 3 3 2 4 4 5 4 3 3 3 2 3 3 4 3 5 3 1 4 3 3 4 5 4 1 1 4 2 3 4 3 2 3 4 3 4 4 4 5 2 2 4 2 3 4 4 3 2 3 4 4 3 5

Perceived Risk Questions

4 3 4 4 4 4 4 3 3 3 3 4 4 4 4 4 3 4 4 4 4 3 4 3 4 3 4 4 4 4 4 2 3 3 4 4 4 3 2 4 4 5 4 4 4 5 3 4 5 3 4 4 4 3 4 3 4 3 3 4 4 3 4 4 4 5 4 4 3 3 4 4 4 4 5

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Online Shopper Yes NO NO Yes NO Yes Yes Yes Yes NO YES YES YES YES YES

Summary of reliability statistics using Cronbachs Alpha Test in SPSS Hypothesis & Questions H1 H2 H3 H4 H5 Q1 Q5 Q6 Q10 Q11 - Q15 Q16 Q20 Q21 Q25 Nr of Items 5 5 5 5 5 25 Valid Answers 120 120 120 120 120 120 Cronbach's Alpha 0.770 0.875 0.817 0.870 0.764 0.944

H 1- 5 , Q1-Q25

The outcome shows that all of the variables have values higher than the cut off value of 0.7 suggested by Nunnally (1978). Cronbach's alpha is 0.944, which indicates a good level of internal consistency for the scale with this specific sample. Based on the direct response received during the management of the pilot survey some enhancements were made to create a reliable and unambiguous understanding of the questions.

3.15 Summary

This chapter begins with exploring the research methodology of the study. As Quantitative research is deductive and hinges on the presence of a hypothesis, which is identified before research begins. The research method that will be adapted in the research is Quantitative method. Next, the research approach chosen for the study is Deductive approach which is a top-down approach that works from the general to the specific. Subsequently the research philosophy that was chosen here is positivistic approach, since the researcher will try to affect and interfere with the collected data as little as possible. Also due to the quantitative nature of this study, the research strategy chosen is a survey which is appropriate for this study because of its quantitative character. Based on the literature review, a theoretical framework was developed for the study. In this study the researcher begins with proposing a proper research model about the topic of interest (factors influencing online buying behavior). This model will give a better understanding of the factors that influence the online buying behavior among Malaysian working professionals. Then the researcher tries to narrow that down into more specific hypotheses that the researcher can test. Subsequently, the researcher narrows down even further when the researcher collects related data to address the hypotheses. This ultimately leads us to be able to test the hypotheses with specific data, resulting in confirmation or verification of the original theories. So the researcher draws on the research approach with deductive trait. Next, the primary data collection will include a survey questionnaire. Questionnaire was chosen as the key methodology since the researcher intends to gather information from a large group of working professionals in Malaysia within the tight research timeframe. In the study the researcher will use snowball sampling, as it is a useful tool for building networks and increasing the number of research subjects (Malaysian working professionals) chosen in the study. The survey questionnaire designed comprised of two parts one on demographic profile of the respondents and another on the evaluation of the five independent variables. The scaling method used in the study is LIKERT scale. Cronbach's alpha was used to check the validity and reliability of the research questionnaire. Finally the chapter ended with a pilot study on 15 Malaysian working

professionals. Based on the direct response received during the management of the pilot survey some enhancements were made to create a more reliable and unambiguous understanding of the questions. Malaysian working professionals responses to the survey questionnaire will help us to analyze the factors that influence the online buying behavior, so that the significant variables will be analyzed and can be used by E-marketers to plot a persuasion strategy to make prospective consumers to shop online.