CHAPTER 3

RESEARCH METHODOLOGY

This chapter includes the discussion of the relevant design and
procedures used in the undertaking of the study. It involves the different parts
that detailed the research method used, respondents of the study, instrument
used, test of validity and reliability, data gathering procedures and statistical
treatment of data.

Research Method Used
Descriptive method is used in conducting this study in which information is
collected about the present existing conditions needed in the chosen field without
changing its environment. This enables the researchers the mobility to work
beyond just data gathering in seeking the true meaning of data collected and
reporting it to the point of view of the objectives and the basic assumptions of the
project underway.
Descriptive method is designed for the investigator to gather information
about present existing conditions. The main objective of this study is to
describe the nature of a situation as it exists at the time of the study and to
explore the causes of particular phenomena (Sevilla, 2012, p.15).
Descriptive research is an effective way to obtain information used in
devising hypothesis and proposing association. This research study that goes
beyond data gathering and tabulation involved the elements of interpretation of
the significance of what being described. It is also a combination of comparing
and contrasting measurements, classifications, interpretation and evaluation.
As used in this research, gathered and treated are data of the employees
profile such as age, sex, civil status, highest educational attainment, position in
the company, length in the service and company perspective such as form of
business, most rendered services, years of existence, major clients, mode of
payments, and number of employees together with the evaluation of the
respondents regarding the cost, revenue, profit maximization, financial
perspective and related problems and possible solutions.

Respondents of the Study
The respondents of the study were composed of the 15 managers, 2
auditors, 7 supervisors, 2 engineers and 4 accountants of Webcast Technologies
Inc.

Instrument Used
The instrument used by the researchers to obtain data is through survey
questionnaires. The researchers discussed, deliberated and revised the
questionnaires as it may deem necessary. The researchers based the contents
of their questionnaire with the finished questionnaire of Malvecino, Paculaba and
Paron (2013) graduates of the Polytechnic University of the Philippines, in their
thesis entitled "Calibrating the Cost, Revenue and Profit Maximization of Rizal
Poultry and Livestock Association". After finishing the first draft of the
questionnaires, they sought for their adviser, Dr. Gloria T. Baysa for some
comments, suggestions and possible revisions. Also, they consulted to Ms.
Rosalyn Silanga for expert opinion.
The questionnaire is divided into six parts. The first part consisted of the
profile of the respondents. The second part consisted of the company's
perspective in terms of form of business, most rendered services, years of
existence, major clients, mode of payment, and number of employees. The third
part consisted of the cost components in terms of cost consideration, actual cost,
marketing and administrative expense, and miscellaneous or other expenses.
The fourth part consisted of the revenue component in terms of expected
income, actual income and other revenues. The fifth part consisted of the profit
maximization in terms of cost minimization and revenue maximization. The sixth
part consisted of the problems encountered and its possible solutions. Likert
scale was used to modify the answer of the respondents considering the five
options with the corresponding scale. The options used are (SA) Strongly Agree;
(A) Agree; (U) Undecided; (D) Disagree; and (SD) Strongly Disagree. The
respondents are requested to check the answer of their choice for each option.
Statement of opinions is presented to respondents who indicate
agreement or disagreement within the statement. The Likert Scaling Method
assigns one scale value of each of the different responses. To analyze
responses using a Likert Scale, each category is assigned to a numerical value
such as Strongly Agree which is equal to 5 and Strongly Disagree which is equal
to 1. The total assigned value will be determined by using the weighted mean.
The scoring systems for each item unit must be such a high score which
consistently reflects a favorable response and a low score which consistently
reflects an unfavorable response.
The corresponding points from the respondents answers to each item
over a five-point scale were as follows:
WEIGHTED MEAN SCALE VERBAL INTERPRETATION
4.51 - 5.0 5 Strongly Agree
3.51 - 4.5 4 Agree
2.51 - 3.5 3 Undecided
1.51 - 2.5 2 Disagree
0.51 - 1.5 1 Strongly Disagree

Validation of the Instrument
A questionnaire was prepared by the researchers and the questions were
studied and categorized into cost components, revenue components, profit
maximization, and problems encountered and possible solution of the
respondents. In making the questionnaire consultation to Professor Gloria T.
Baysa, the thesis adviser was done in preparation of the questionnaire.
Survey questionnaires were checked and revised in accordance with the
comments and suggestions given by Dr. Gloria T. Baysa. The questionnaire was
also showed to Ms. Rosalyn Silanga, internal auditor of Webcast Technologies
Inc., to verify its applicability and reasonableness to the company and to provide
assurance that the respondents will be able to answer it appropriately. The latter
commented about the questionnaire saying that it is suitable and applicable to
their company because one of the questions written particularly tackles about the
revenues that they generate from their other clients. According to her, Google is
one of the seasonal clients that increase the companys profits significantly
compared to its recurring clients. The other revenues generated from the
companys government clients is also one of the clients that was talked about by
Ms. Silanga that contributes to the one-time-big-time revenue of the company.
She also mentioned that the questionnaire is very long emphasizing that it will
takes time for the participants to answer. Nonetheless, it is accepted and
approved, giving the researchers opportunity to continue on the next step which
is the distribution of the questionnaires to the appropriate respondents. All
corrections were incorporated to the final draft of the questionnaire. Prior to the
actual survey, a pre-survey was conducted in order to test the validity and
reliability of the questionnaire as a whole.
The researchers used item analysis for validity testing by which the
Difficulty index (DI) and the validity index (VI) of each item in test were
determined. This was used to determine if the respondents would be able to
answer the instruments Five (5) representatives from Webcast Technologies Inc.
who were not part of the respondents are the sample used. The responses of
these individuals were tallied to determine who answered the questions with
strongly agree strongly disagree.
To get:
VI = PSA PSD
N
PSA =
NSA

N
PSD =
NSD
As to difficulty index, a question was not appropriate if it is easy,
appropriate if moderately difficult, and modified if difficult.
The Difficult Index formula is:

Where:
P
SA
= Percentage of Strongly Agree
P
SD
= Percentage of Strongly Disagree
The ranges of values used in determining the Difficulty Index are the
following:
DI .75 Item is Easy (E)
. 25 DI .75 Item is Moderately Difficult (Mdf)
DI .25 Item is Difficult (Df)
The results of the difficulty index computation of the questionnaire show
that all were marked Moderately Difficult which shows that the questions are valid
and appropriate.
On the other hand, questions that resulted to a validity index of highly
discriminating were maintained and those that resulted to moderately
discriminating were modified.
The Validity Index formula is:




DI =
(PSA PSD)
2

Where:
VI = Validity Index
P
SA
= percentage of N
SA

P
SD
= percentage of N
SA

N
SA
= answer with highest frequency
N
SD
= answer with lowest frequency
N = number of sample respondents
The ranges of values used in determining the Validity Index are the
following:
VI 0.75 Highly Discriminating (HD)
0.25 VI 0.75 Moderately Discriminating (MD)
VI 0.25 Not Discriminating (ND)
The result of the validity index computation of the questionnaire shows
Highly Discriminating which means that the questions are to be retained and
Moderately Discriminating which means that the questions are to be modified.
For reliability testing, the researchers used the split-half method. The total
set of item questions was divided into halves. The odd numbered items are
assigned as variable x, while the even-numbered are assigned as variable y. The
scores on the halves were correlated to obtain an estimate of reliability.
To obtain the value of correlation, which is the split-half reliability, the
Pearson r Product-Moment Correlation Coefficient formula was used.
The Pearson r Product-Moment Correlation Coefficient formula is:

Where:
r = Pearson correlation coefficient
x = Independent variable 9odd-numbered items
y = Dependent variables (even-numbered items)
n = Total number of respondents
The formula resulted to 91% which denoted a very high relationship.
Since the split-half procedure was based upon a correlation between
scores obtained on only half the test, a correlation was needed to determine the
reliability of the entire test. The halves can be considered approximation to
alternate forms. To do this, the Spearman Brown Prophecy Formula was used
The Spearman-Brown Prophecy Formula is:

Where:
r
sb
= split-half reliability coefficient
r = represents the correlation between the two halves
of the scale
The formula resulted to 95% which denoted a very high relationship.
The succeeding classification is used to find out the level of reliability of
the test:
An r from 0.00 to 0.20 denotes negligible correlation
An r from 0.21 to 0.40 denotes low or slight correlation
An r from 0.41 to 0.70 denotes marked or moderate relationship
An r from 0.71 to 0.90 denotes high relationship
An r from 0.91 to 0.99 denotes very high relationship
An r from 1.00 denotes perfect correlation

Data Gathering Procedures
The researchers had allotted vigorous time, effort and cooperation in
developing their questionnaire so as to serve its intended respondents. The
survey was created using suitable questions modified from related research and
individual questions formed by the researchers. The survey was comprised of 6
main parts subdivided into different subparts which were related to the
participants perception regarding profit maximizing techniques. In the
questionnaire, Likert scale was used to determine if the respondent agreed or
disagreed in a statement. After the professor approved the questionnaire, copies
were distributed to the 30 respondents of Webcast Technology Incorporation on
September 11, 2014. Participants were given time to respond in the morning and
then the researchers collected the survey questionnaires in the afternoon on the
same day.
The data gathered from this research instrument were tallied and
computed for interpretation according to the frequency of items checked by the
participants. Along with primary data, the researchers also made use of
secondary resources in the form of published articles and literatures to support
the survey results.


Statistical Treatment of Data
The data collected in this study were organized and classified based on
the research design and the problems formulated. The data were coded, tallied
and tabulated to facilitate the presentation and interpretation of results using the
following:
1. Frequency and Percentage
The percentage and frequency distributions were used to classify the
respondents according to the personal background variables such as age, sex,
civil status, highest educational attainment, position in the company, length in
service. The frequency also presented the actual response of the respondents to
a specific question or item in the questionnaire.
On the other hand, the percentage of that item is computed by dividing it
with the sample total number of respondents who participated in the survey.
The formula used in the application of this technique is:
% =
N
Where:
% = percentage
f = frequency
n = number of cases or total sample



X 100
2. Ranking
This is a descriptive measure to describe numerical data in addition to
percentage. Ranking was used in the study for comparative purpose and for
sharing the importance of items analyzed.
3. Weighted Mean
Another statistical technique used by the researchers was the weighted
mean. It was used to determine the average responses of the different options
provided in the various parts of the survey questionnaire used. The method is
used in conjunction with the Likert Scale. It was solved by the formula.
x = x
n
Where:
X = weighted mean
x = the sum of all the products of and x, being the
frequency of each weight and x as the weight of each
operation
N = total number of respondents.
4. One-Way Analysis of Variance (ANOVA)
A One-Way Analysis of Variance is a way to test the equality of three or
more means at one time by using variances.
This was used to test the significant differences between means of 3 or
more sets of data simultaneously. It is the method of dividing the variation
observed in experimental data into different parts, each part assignable to a
known source of factor. ANOVA set at 0.05 probabilities was used.
a. Sum of Squares within
SS
n
= SS
t
-SS
b

Where:
SS
t
= total sum of squares

SS
b
= sum of square between
n = total number of samples
b. Sum of Square between:
SS
b
= (X- X
t
)
2
n
Where:
SS
b
= sum of square between
X = mean of any group
X
t
= mean of total distribution
n = total number of sample
c. Sum of Square total:
SS
t
= SS
b
SS
w

Where:
SS
w
= sum of square within
SS
t
= sum of square total
SS
b
= sum of square between


d. Mean Square
MS
b
=SS
b

d
b

Where:
MS = mean square between
SS
b
= sum of square between
d
b
= degrees of freedom between
MS
w
= SS
w

d
w

Where:
MS
w
= mean square within
SS
w
= sum of square within
d
w
= degrees of freedom within
Computation for degree of freedom is necessary in order to obtain the
critical value (P), the formula is:
d = ( r 1) ( k 1)
Where:
R = number of rows
K = number of columns
D = degree of freedom