4 Research Methodology
4.2 Research Approach – Rationale for the Selection of a Qualitative Approach
4.1 Introduction
As was set out in the preceding chapters of this thesis, the objective of this exploratory research is to investigate the context and motivations that saw the Financial Services industry in South Africa voluntarily develop a blueprint for the economic transformation of the sector – a blueprint known as the Financial Sector Charter. This chapter sets out the study’s research methodology, the sampling and information gathering procedures and the manner in which the data analysis was undertaken in order to reach the findings and conclusions that are presented in later chapters. The chapter commences with a consideration of the choice of research approach and the conceptual merits thereof, then continues with an explanation of the data collection and sampling methods applied. The subsequent data analysis technique is described together with issues around the validity of the findings. The chapter concludes with a review of the research ethics applicable to, and the limitations of, the study.
4.2 Research Approach – Rationale for the Selection of a Qualitative Approach
It is important to locate a research study within an appropriate research tradition and within that tradition, an appropriate research paradigm. Modern research in social sciences is typically described as following one of three broadly acknowledged research traditions or research designs, namely quantitative, qualitative or mixed methods research (Cresswell, 2014).
Quantitative research follows the post-positivism tradition of determinism and reductionism (Armitage, 2007), being directed towards studying causal relationships or correlations between variables, using statistical methods on large sample sizes to prove hypotheses or draw theory generated by “deduction from a priori assumptions” (Patton, 2002). Objective data is obtained
“from empirical observations and measures. Validity and reliability of scores on instruments lead to meaning interpretations of data." (Cresswell, 2014).
By contrast qualitative research, the use of which has grown significantly since the 1980s (Miles & Huberman, 2002), is a process of “actively enter[ing] the worlds of interacting individuals” which makes possible “description and understanding of both externally observable behaviours and internal states (e.g. opinions, values).” (Patton, 2002, quoting Norman Denzin). As a consequence of this process, “theory (or some other broad explanation) becomes the end point of the study”, using smaller sample sizes to inductively build from data to broad themes to a model or new theory (Cresswell, 2014).
Thirdly, research may adopt a mixed methods design for a study whose context is suited to adopting particular elements of both approaches. This is a comparatively newer field of research design, where the intention is to utilise the collection of data that is both qualitative and quantitative to neutralise potential weaknesses in either form of the data, often through cross database analysis (Maxwell, 2013).
While various quantitative studies have looked at the financial impact of particular elements of economic transformation on South African companies and their shareholders (for example the work of Allesandri et al (2011) and Miller (2012) as considered in Chapter 3) such studies are by definition exploring numerical measures across a large number of companies, sufficient to generate an appropriate sample size in order to test a particular hypothesis. In the two research examples cited above, the test was the creation of shareholder value over time from a B-BBEE ownership transaction. This study, by contrast, seeks to explore the events and processes that led to the formation of a legislative and business environment which resulted in the creation of those very ownership transactions, focussing on Financial Services companies. This is an exploration that is better suited to a qualitative approach. Reinforcing this, Denzin and Lincoln (2011) note: “qualitative research is a situated activity that locates the observer in the world.
[It] consists of a set of interpretive, material practices that make the world visible.”
From an epistemological point of view, the particular research paradigms (or “knowledge claims”) typically associated with qualitative research are often described as being social constructivism, critical theory (or advocacy) or pragmatism (Cresswell, 2014), though scholars such as Denzin and Lincoln introduce other emerging paradigms into this list as well, including feminism, racialised discourses, cultural studies and queer theory (2011). Whist there are
recognised overlaps in these paradigm descriptions (Patton, 2002), as the use of qualitative research continues to grow so do the theoretical boundaries continue to be pushed and reimagined, such that it is more about “taking account of the world that we have inherited” and less about the hegemonic dominance of one paradigm over the other (Denzin & Lincoln, 2003).
Social constructivism (often combined with interpretivism) seeks to understand social phenomena from a context-specific perspective, noting that a particular “reality” is either socially, culturally or historically constructed. The aim is to generate or inductively create meaning, often by posing questions to generate data through a process of interaction among individuals (Lincoln & Guba, 1985). Critical theory (or critical realism), by contrast, has a strong focus on social justice, arguing that social constructivism does not go far enough in dealing with marginalised or disenfranchised groups in setting – as an outcome – an action agenda to address injustice or inequality (Cresswell, 2014). The pragmatist approach – not being committed to the underlying issues of the above paradigms – views the problem or issue as primary and carries an interest or concern in applications and solutions. Research may thus employ, in a creative basis, either qualitative or quantitative methods (or a combination of both) to understand the root of the “problem” that best meets their purposes (Cresswell, 2014) in adopting a pragmatist approach.
Given that the main objective of this exploratory study was to understand the factors that caused the development, adoption and implementation of the 2003 Financial Sector Charter, and 15 years later how the industry, government and their social partners might set the agenda for a new, second phase of transformation to tackle the country’s ongoing social challenges, a critical realism approach with its social justice orientation aligns strongly with the stated research objectives (Merriam & Tisdell, 2016). Given the practical requirements of this MPhil degree, a further important benefit of adopting a critical realism approach is its focus on action resulting from the study; as Merriam and Tisdell note of the approach (quoting Patton, 2015):
“it aims to critique existing conditions and through that critique, bring about change” for a
“more just society” (2016).
There is also a “longitudinal” element to the study: the Financial Sector Charter development process was initiated in 2002 and took place during 2003, yet 15 years later there has been debate in the South African parliament (Carrim, 2017) on the effectiveness (or otherwise) of the industry’s transformation efforts. Hence the study provides an opportunity to look at contemporary (that is 2018/19) views as well, to establish whether and how the contextual situation and perspectives of companies, government and social partners have changed over the period.
4.2.1 Grounded Theory
Within this approach the researcher employed grounded theory-type methods to analyse the responses from the data gathering process to reveal the complexities and nuances of the initial Charter development process and its subsequent implementation. This approach does have limitations that are well recognised: the ability of the researcher to generalize the findings outside the study setting are constrained and theory testing is not possible; however, the approach is regarded as suitable for initial exploratory research.
Grounded theory emerged as a methodology in the 1960s following fieldwork by Glazer and Strauss on terminal patients in American hospitals. Glaser and Strauss (1967) advocated that
“theory could be deducted from research grounded in data rather than deducting testable hypotheses from existing theories.” Their initial work was further advanced by Strauss and Corbin and although the original proponents diverged in their views on the specific application of the methodology (Charmaz, 2006), the methodology was further developed by Charmaz, who emphasised the inherent flexibility of grounded theory as being one of its greatest strengths (2006).
Taken to its full extent, grounded theory “through a process of constant comparison and reduction, aims to establish tight, well-integrated theory built from well-defined concepts arising directly from the empirical research in hand” (Wimpenny & Gass, 2000).
Although it is not the intention of the researcher to develop theory, focussing instead on an exploratory study, it was precisely this flexibility and the process of constant comparison that lead the researcher to make use of grounded theory methods to analyse interview responses (from black business professionals, government, industry leaders, industry bodies and non- governmental and community organisations), to reveal the complexities and nuances that drove the development of the initial Charter process. Similarly, to seek these perceptions from those who have inherited the Charter and its gazetted successor – the Financial Sector Code – in 2018/19. As illustrated by Charmaz (2006) “the potential strength of grounded theory lies in its analytic power to theorise how meanings, actions and social structures are constructed”.
Another advantage of adopting grounded theory methods for analysis is that qualitative research methods often produce significant quantities of raw data, and such methods “provide researchers with analytic tools for handling masses of raw data”, allowing “results and findings [to be] grounded in the real world.” (Patton, 2002).
The integration of the findings from this unique case in this manner with a critical lens (Merriam & Tisdell, 2016) enabled the underlying perceptions and factors that motivated the development of the Financial Sector Charter in South Africa in 2003 to be uncovered and assessed, together with lessons from its development and implementation through to 2018. In this way commentary about the sector and its achievements regarding transformation can be better analysed and understood, allowing for practical opportunities (common to critical realism research and a requirement for this dissertation) to be better formulated and situated.