Evaluating the European Central Bank's quantitative easing policy effectiveness

Organizational Research

Organizations are complex systems, open and dynamic and thus require a great deal of focus by researchers when they are examined. One can use quantitative, qualitative or a mixed methods approach to organizational research (Swanson, 2005, p. 6). Research can be conducted using surveys, interviews, observational methods, meta-analysis, phenomenological approaches, multivariate or structural equation modeling and many other ways (Creswell, 2007). Essentially, it is up to the researcher to decide what problem or issue he wants to study and then assessing the best method that would suit the subject. For instance, if the researcher wants to investigate how employees within an organization respond to management styles of leadership, the researcher could conduct quantitative research using surveys and a Likert-scale form of analysis, or he could conduct qualitative research using interviews -- or he could do both and provide a mixed methods study. If the researcher wanted to investigate supply-chain management within an organization, he could adopt similar approaches or apply something like a factor analysis method. The options are virtually endless and depend upon where the researcher would like to apply his focus.

The company chosen for this study is the European Central Bank (ECB) led by Mario Draghi. The problem to be addressed is whether or not the ECB's policy of quantitative easing through the purchase of assets has had any positive impact on the banking sector in Europe by allowing banks to provide more loans with the available liquidity to corporations, housing or private consumers. The study could be conducted by using a survey method.

The ECB is currently trying to stimulate the economy in Europe through a number of policies such as zero-percent interest rates, negative interest rates, and quantitative easing (the purchasing of asset classes, which helps to provide market liquidity). The problem is that the economy continues to show no signs of growth; meanwhile the ECB takes on more debt. It is not an isolated scenario either as the same thing is essentially being practiced by the central bank in the U.S. Thus, this study could have value for Americans seeking to understand the level of effectiveness of the Federal Reserve at economic intervention.

There is little evidence that the ECB is currently using research studies within the organization, as most central banks are closed systems that do not provide a great deal of transparency. However, there is some indication that the bank does assess its situation, though if comments from Draghi are any sign, those assessments essentially mean nothing next to the ECB head's determination to go "all in" on economic stimulus policies that have not even been shown to have any positive effect on the economy whatsoever. For this reason, it is vital to the health of the organization that a real research study into the organization's policies be conducted in order to assess their effectiveness, even if only on a basic qualitative level.