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4.1. INTRODUCTION

Research plays a significant role in human progress. It inculcates scientific and inductive

thinking and promotes the development of logical thinking and organization. The role of

research in several fields of applied economics has increased in modem times. As an aid to

economic policy, it has gained importance for policy makers in understanding the complex

nature of the functioning of the economy. It also occupies special significance in solving

various operational and planning problems of business and industry. Social scientists study

the relationships among many variables seeking answers to complex issues through research.

In short, research aids the process of knowledge formation and serves as an important source

of providing guidelines to different business, government and social organizations. The

knowledge of the critical perspectives or philosophy of science, techniques of data collection

and tools or methods of analyzing data are essential for undertaking research in a systematic

manner.

4.2. RESEARCH METHODOLOGY & ITS CONSTITUENTS

Research in common parlance refers to a search for knowledge. It can be defined as a

scientific and systematic enquiry either to discover new facts or to verify old facts, their

sequences, interrelationships, causal explanation and the adherence to natural laws governing

them. It thus aims to discover the truth by applying scientific methods.

Research Methodology is a wider tern. It consists of three important elements:

i. theoretical perspectives or orientation that guide research and logic of enquiry,

ii. tools and techniques of data collection, and

iii. methods of data analysis.

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Research Methods, comprises of research techniques and tools. Research techniques refer

to the practical aspects of collecting data and the way the information/data obtained/collected

is organized and analyzed. Tools are the instruments that are used for data collection and its

analysis. It includes questionnaire/schedules, dairies, check lists, maps, photos, drawings etc.

Census and survey methods are mainly used to collect quantitative data. In qualitative

research, data is generated/compiled by way of participant observation, semi structured

interviews, life histories, experiments, pilot studies, scenarios etc. Data analysis involves a

set of statistical techniques used in establishing relationships between the different variables

and in evaluating the accuracy of the results.

Thus, methodology, methods and tools/techniques are three distinct elements of the research

process. Any one of these three elements by itself may not be adequate in many situations.

For instance, no data can be systematically collected without adequate knowledge of

techniques of data collection. Similarly, data cannot be explained without comprehending the

philosophy or perspective behind the characteristics underlying the variables to which the

data relates. A sound knowledge of statistical techniques is also necessary to analyze the data

efficiently.

4.3. TYPES OF RESEARCH

A research can be divided into two broad categories: 6

(A) Scientific Research

(B) Social Research

(A) Scientific Research

It is also known as the objective research or pure research. It is defined as a process of

knowing the new facts and verifying old ones, by the application of scientific method to

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natural phenomena so as to come to uniform explanation of laws governing these

phenomena.

(B) Social Research

P. V. Young has defined social research. According to him, it is “the systematic method

of discovering new facts or verifying old facts, their sequences, inter-relationships, casual

explanation and the natural laws which govern them”.

The definition explains the following characteristics features of social research:

(a) Social research deals with phenomena. It studies the human behaviour.

(b) It discovers new facts and verifies old facts. With the improvement in the

technique and changes in the phenomena the researcher has to study them.

(c) Casual relations between various human activities can also be studied in

social research.

The researcher has to conduct scientific analysis, comparisons and also logical

interpretations of human behaviour.

The other types of research are as given below:

1. Descriptive Research and Analytical Research

2. Applied Research and Fundamental Research

3. Qualitative Research and Quantitative Research

4. Conceptual Research and Empirical Research

5. One time Research and Longitudinal Research

6. Filed Research and Laboratory Research

7. Historical Research

8. Conclusion Oriented Research and Decision oriented research.

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1) Descriptive Research and Analytical Research

This type of research covers the surveys and fact-finding inquiries of different kinds. It

describes the state of affairs as it is today. Ex-post facto Research is the term often used

in social research and business. Researcher cannot have his control over the variables.

The analytical research refers to the collection of the facts, which are analyzed critically.

2) Applied Research and Fundamental Research:

In applied research one can find a solution for an immediate problem of a society or

business organization. In fundamental research, one can generalize and formulate a

theory. P. V. Young refers the pure research as to gather data for knowledge’s sake. Any

natural phenomenon or an example in pure mathematics can be explained in fundamental

research. The studies relating to human behaviour are conducted to make generalization

about human behaviour and they are included in the Fundamental Research. But the

applied research covers the socio-economic and political studies, marketing research or

evaluation research. Therefore, the distinction between the fundamental research and

applied research can be stated as the former deals with finding information and the latter

as the base of its application to the practical problem.

3) Qualitative Research and Quantitative Research

The quality is the base of qualitative research, whereas the quantitative research is the

measurement of quantity. The motivation research covers the reason of human behaviour.

In the behavioural research the qualitative research is useful.

4) Conceptual Research vs. Empirical Research

In the conceptual research, abstract idea or theory is covered. Philosophers are using it.

The empirical research covers the experiences or observations.

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The empirical research is known as the experimental type of research. The researcher

puts forth the hypothesis and then tries to collect the facts. Such research is appropriate

when proof is sought. The certain variables affect other variables in some way.

5) One Time Research Vs. Longitudinal Research

One time research is confined to single time period. Longitudinal research is carried on

over several time periods.

6) Field Setting Research Vs Laboratory Research

The research conducted in the field to analyze human behaviour is known as field setting

research. If the research is conducted in the laboratory it is called laboratory research.

7) Historical Research

This is based on historical sources. It studies the events in the past. It studies the

philosophy of persons.

8) Conclusion Oriented Research and Decision Oriented Research

Any problem is taken by a researcher, design the inquiry and get the conclusion on the

basis. This is known as conclusion oriented research. In decision-oriented research, the

researcher has to conduct his studies in the direction of the decision maker. The best

example of the decision-oriented research is the operation research.

4.4. RESEARCH PROCESS

Any research study like this thesis needs a sound ground of well-established research process;

the process generally consists of following steps.

(I) Statement of the Research Problem

(II) Literature Review

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(III) Development of Working Hypotheses

(IV) Preparing the Research Design

(V) Determination of the Sample

(VI) Collection of Data

(VII) Analysis of Data

(VIII) Hypotheses Testing

(IX) Interpretation and Generalization

(X) Preparation of Research Report.

All the above steps are conducted systematically and consciously during this study and

followed the guidelines of the process.

(I) Statement of the Research Problem

It is true that dramatic events like banks Core Banking Solution system and day to day

increases the repo and reverse rate by RBI forcefully banks has to make changes in their

Interest charging and applied on respected accounts and this occupy the Indian business

newspapers almost daily. Further they have become central focus of public and corporate

policy issues. Some assert that the activities Core Banking Solution system represent a new

force in creativity and productivity. Some others view it as blight on our economy.

Regardless of these views, they do represent a major trend in the contemporary and economic

environment. This is an area of potential good as well as potential harm in corporate strategy

in banking industry. Core Banking Solution system take place due to various motives.

Therefore an analysis has to be made to compare the financial performance of the pre and

post Core Banking Solution system installations of banks to gain some insights into the

factors that might have possibly induced the implementation of CBS in Co-operative banks.

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(II) Literature Review

Abundant literature is available on this issue; the literature review generally contains the

reading of the following.

(a) The books related to the subject matter

(b) Periodicals devoted or otherwise covering the issues regarding industry

(c) Published reports of Government, Non-Government & Social Organizations

(d) Literature available in the form of articles published in different publications

(e) Daily newspapers.

The researcher had followed the process of literature review by reviewing different literature

and books.

(III) Development of Hypothesis

The word hypothesis is a compound of two words ‘hypo’ and ‘thesis’ and literally hypo

means under or below and thesis means a reasoned theory or rational viewpoint.

Accordingly, hypothesis would mean a theory, which is not fully reasoned. In other words,

hypothesis is a theory entertained in order to study the facts and examine the validity of the

theory.

Mill has defined hypothesis as “an supposition, which we make (either without actual

evidence, or an evidence avowedly insufficient) in order to endeavour to deduce conclusions

in accordance with facts which are known to be real under the idea that if the conclusions to

which the hypothesis leads are known truths, the hypothesis itself either must be or at least

likely to be true.” According to Coffey, “A hypothesis is an attempt to explanation: a

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provisional supposition made in order to explain scientifically some fact or phenomenon.”

And According to Cohen and Nagel, “A hypothesis directs our search for the order.” It is not

essential for a hypothesis to be necessarily true. In fact, hypothesis is not a claim of truth but

a claim for truth. Hypothesis is a bridge in the process of inquiry or search, which begins

with some, felt difficulty or problem and ends without the resolution of the problem. In the

words of Cohen and Nagel, “The function of a hypothesis is to direct our search for the order

among facts. The suggestions formulated in the hypothesis may be solution to the problem.

Whether they are, is the risk of the inquiry.” The truth of hypothesis involves observation,

imaginative thinking, anticipation and deductive verification.

The statement of hypotheses was evolved with proper deliberations and care, in fact the

hypothetical statements were the result of literature review and the consequence of

discussions made with my guide. The statements were redefined and reformulated to catch

the exact meaning of the problem and to bear them the following characteristics.

1) It has adequate reply to the above stated research problem.

2) It is logical and simple.

3) It takes care of all the variables.

It is with the scope to get disproved or rejected depending on the analysis of the data and

revelations of the research study.

(IV) Preparation of Research Design

Research design simply means adopting that type of technique of research, which is most

suited for the research, and study of the problem for investigation and research of the

problem. The proper material has to be selected and collected. In one line proper man,

material, method, type and techniques of research should be used.

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Definitions

The term ‘Research Design’ has been defined by different social scientists differently. Few of

them are given below.

1) Russer Ackoff in his book ‘Design of Social Research’ has defined, it as “Design

is the process of making decisions before a situation arises in which the decision

has to be carried out. It is process of deliberate anticipation directed towards

bringing an unexpected situation under control”.

2) Prof. Miller in his book titled “Designed Research” has defined it as “the planned

sequence of the entire process involved in conducting a research study”.

3) Prof. Young has defined it as “the design results from controlling general

scientific model into varied research procedure”.

4) Johoda, Deutish and Cook have defined it as “a research design is the

arrangement of conditions for collection and analysis of data a manner that aims

to combing relevance t the research purpose with economy in procedure”.

5) In a simple language, General Def has defined Research Design as “the plan,

structure and strategy of investigation conceived so as to obtain answers to

research questions and control variance”.

The design talks about the following points at various places during the explanations on

the specific point. A general list which takes cares and answers the following questions.

However for the comprehension of the reader the questions pertaining to the research

design are mentioned here under in a brief mode.

1) What is the study about?

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A1) The study is about the compare the financial performance of the pre & post CBS

implementation of selected co-operative banks in Pune and Mumbai region. Why is

the study being made?

A2) To gain some insights into the factors that might have possibly induced the CBS

implementation.

2) What type of data is required?

A4) This research study is purely based on Primary and secondary data.

3) Where can be the required data found?

A5) The data can collected from Prowess Database of CMIE, annual reports/financial

statements of the selected co-operative banks in Pune and Mumbai region.

4) What period of time will be study include?

A6) the CBS implementation prior to implementation i.e. banking data as on 31st March

2000 and after the implementation of CBS takes place during the period 31st March

2005 and 31st March 2011. To study the objectives 5 years pre & 5 years post CBS

implementation period is considered.

5) What will be the sampling method?

A6) A detail explanation is offered under the heading sampling method.

6) What techniques of data collection are used?

A7) A detail explanation is offered under the heading data collection.

7) How will be the data analyzed?

A8) Considering the nature of research problem, required data is taken from annual

report/financial statements of each sample Co-operative banks for 5 years pre & 5

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years post CBS implementation period is considered. Which are the tools to be used

for data analysis?

A9) A detail explanation is offered under the heading tools to be used for data analysis.

8) In what style the report will be prepared?

A10) The style of report is abided by the conventional norms of the reporting followed

for the purpose of submission of theses for which the Ph.D degree is awarded.

(V) Determination of Sample Size

A detail description about the sample size is explained under the heading of Sampling

Method.

(VI) Collection of Data

A detail description about the sample size is explained under the heading of Data

Collection.

(VII) Analysis of Data

A detail description about this point is explained under the heading of data analysis &

testing of hypothesis.

(VIII) Hypothesis Testing

In the chapter of Data Analysis, Testing of Hypotheses specially describes the

conclusion regarding either the hypothetical statement whether proved or disproved.

Not a single statement is left without it’s testing. The entire testing of hypotheses

bears a linkage with the analysis.

(IX) Interpretation and Generalization

The process of interpretation is carried out along with the process of analysis.

Therefore the interpretation is placed in the form of Inference, Comments,

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Observations and Findings from data analysis & testing with statistical tool. Similarly

the generalization is reflected by the proof of hypotheses.

(X) Preparation of Research Report

Since this is a work which is submitted for the purpose of award of Ph.D degree. It

follows all the conventions generally followed for the reporting and the

Chapterization of the report is as under.

CONTENTS

Chapter ParticularPage No

(From – To)

Declaration

Certificate

Acknowledgement

List of Tables

List of Abbreviations

List of Graphs

I Introduction

II Literature Review

III Conceptual Framework

IV Research Methodology

V Data Presentation and Analysis

VI Findings and Suggestions

VII Conclusion

Bibliography & References

Appendix

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4.5. OBJECTIVES OF THE STUDY

Based on Review of literature & available data, researcher stated following objectives.

a) To overview the operating performance of selected Indian Metals & Metal

Products and Machinery companies going for merger.

b) To study the types of merger during 2005 to 2010 of manufacturing companies.

c) To evaluate the financial performance of selected Indian Metals & Metal Products

and Machinery companies during pre and post mergers.

d) To study the impact of merger on the financial performance of selected Indian

Metals & Metal Products and Machinery companies in long run.

4.6. HYPOTHESES

The present study tests the following null hypotheses.

a) The merged manufacturing companies did not achieve liquidity, solvency and

improve profitability after merger.

b) The merged manufacturing companies did not expand their business activities

after merger.

c) There is improvement in operating performance of merged manufacturing

companies.

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4.7. PERIOD OF STUDY

To study the objectives 3 years pre & 3 years post merger period is considered. Merger year

considered as a base year.

4.8. SAMPLING METHOD

While selecting sample the researcher is used convenient sampling method. With reference

to Indian Metals & Metal Products and Machinery companies is to be taken into

consideration to formulate the total population. Here the researcher proposed to take 15%

sample size from total population for the study.

4.9. DATA COLLECTION

The present study is mainly based on secondary data. The availability of secondary data to be

collected from Prowess Database of CMIE, Annual Reports, published Research, Reports

and Research Organization, Books, periodicals and Website etc.

4.10. TOOLS TO BE USED FOR DATA ANALYSIS

In order to analysis & evaluation of the collected data, tools like Ratio Analysis, it is used

Mean, Standard Deviation &‘t’-test to be using.

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4.11. DATA ANALYSIS AND TESTING OF HYPOTHESIS

To study the objectives & test the hypothesis, the researcher is used following parameters;

Testing of HYPOTHESES:

The present study tests the following null hypotheses.

H1 The merged manufacturing companies did not achieve liquidity, solvency and

improve profitability after merger.

A. Liquidity Parameters: Current ratio

Quick ratio

Net working capital and

Diversion of short-term funds.

B. Leverage Parameters: Total debt and equity to total assets

Total borrowings and equity to EBITD and

Interest coverage ratio

C. Profitability and Other Parameters:

Operating profit

Net profit

ROI and

Net worth.

H2 The merged manufacturing companies did not expand their business activities

after merger.

For the purpose of testing the two hypotheses stated above, this study is classified into two sections.

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Section A. Liquidity, Solvency and Profitability of Merged Manufacturing Companies,

Section B. Capital Formation and Investment of Merged Manufacturing Companies.

H3 There is improvement in operating performance of merged manufacturing

companies.

Operating Profit Margin

Gross Profit Margin

Net Profit Margin

Return on Net worth

Return on Capital Employed

Debt-equity Ratio

4.12. LIMITATIONS OF THE STUDY

i. This research study is limited to merger takes place during the period 1st April 2005 to

31st March 2010 in selected Indian Metals and Metal Products and Machinery

companies’.

ii. Time span for the study is 3 years pre merger & 3 years post merger.

iii. The sample sizes are selected from Prowess database of CMIE which is online

corporate database.

4.13. CHAPTERIZATION

To perform the study systematically the research is divided in to various chapters as follows:

CHAPTER I: INTRODUCTION TO STUDY

In this chapter a brief introduction of the research is given. It includes the significance of the

research study which explain that the why this research is important. The researcher has

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made attempt to give general analysis of current trends in merger and acquisition in India as

well in the International market.

CHAPTER II: REVIEW OF LITERATURE

In the chapter the researcher has studied the available existing literature related to mergers,

amalgamation, acquisitions, takeovers, capital structures for that purpose the researcher used

published or unpublished articles, research papers, previous PhD thesis, news in news papers

and other available sources. This helps the researcher the in the view of analyzing the

financial performance during merger activity in different time periods & also helps to

deciding the sector in which the research is required, objectives and hypothesis of the study.

CHAPTER III: CONCEPTUAL FRAMEWORK

The theoretical application related to the research is discussed in this chapter. This chapter

includes history, concept, meaning, types & various terms related to merger and acquisitions.

The researcher also includes the various motives behind and effects take place on the

organization which leads to make deals, legal & procedural aspect of merger, which are the

methods used by the organization at the time of merger for financing the deal, accounting for

merger and acquisitions and finally SEBI guidelines related to merger and acquisitions.

CHAPTER IV: RESEARCH METHODOGY

In this chapter a brief introduction of the research methodology is given. This chapter include

statement of research, objectives and hypothesis of study, period of the study sampling

technique, data collection method, tools to be used for data analysis & testing of hypothesis,

limitations of study and finally Chapterization which gives details of the contents covered in

every chapter. With the help of this chapter the researcher came to know right way to guide

& complete the research study.

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CHAPTER V: PRESENTATION ANALYSIS AND INTERPRETATION

The collected data is analyzed and tested in this chapter. In order to analysis & evaluation of

the collected data, tools like Ratio Analysis, Mean, Standard Deviation &‘t’-test is used.

With the help of analysis and testing of collected data the researcher has made interpretation.

CHAPTER VI: FINDINGS AND SUGGESTIONS

In this chapter the findings and suggestions are given. The findings are made depending upon

the data analysis and testing of data. With the help of testing the researcher has came to know

which hypothesis is positive or negative. On this basis the researcher has given suggestions.

CHAPTER VII: CONCLUSION

With the help of above chapters the researcher has made the conclusion and gives which are

the areas needs to be exploring in future period of time.