Epistemology, methodology, and validity in Craig/Amernic and Yonnedi privatization studies

Privatization -- a Comparison of Two Studies

Privatization:

A Comparison of Two Studies

The author of this paper is asked to offer a review and analysis of two major studies that both pertain to corporate privatization. The author is asked to break down the analysis into eight major categories. Those areas, in order, are epistemology (how relevant/correct the method is for the study relative to what is being studied), the associated literature reviews, the methods employed overall, the data analysis underpinning the results for each study, the interpretation of the results for each study, the overall readability of each study's summary, the relevance of the conclusions reached, and the contribution of the research to the overall body of knowledge as parlayed by the two studies.

Epistemology

The overall approach of the Craig/Amernic study is to focus on the senior management discourse of companies that take the privatization route. The study notes that a narrative perspective is adopted and the results/review of the study are stated in accounting-type language. There is perhaps a danger in not sticking to verifiable and provable figures, but the overall method employed for this study was solid. There is a huge qualitative dimension to this subject and that has to be recognized. A modicum of academic prowess is maintained via the use of accounting-based language because this is a set of jargon and terminology that many professionals reading this study will understand implicitly due to the shared knowledge set and culture of the accounting industry around the world (Craig & Amernic, 2008).

The methodology behind the Yonnedi article was much more quantitative in nature because a standardized questionnaire was used. For that reason alone, any conclusions drawn will generally have much more weight and validity because qualitative analysis can be very subject to bias and preconceived notions and that can cloud and pollute the efficacy and validity of any results offered, even if the conclusions happen to be the right ones (Yonnedi, 2010).

Literature Review & Research Question Connection

The Craig/Amernic report has an extensive section that covers prior theory and research. The study goes so far as to offer a breakdown of certain trends and terms starting on page 1094 of the treatise. Example topics include operating ratio/adjusted operating ratio, compensation and benefit policies and so forth (Craig & Amernic, 2008).

The Yonnedi study also has a section like the above but it is much smaller, spanning only a few pages. That being said, there is certainly a "bang for the buck" as they author apparently assumes that most people reading the study will know the basics and jargon behind the industry and they just get to the "meat" of prior research and conclusions so as to quickly inform the debate and questions that are about to come. Immediately after this section, the Yonnedi report gets right into the development of the hypotheses of the study (Yonnedi, 2010).

Methods Employed

As noted above, there is a fairly strict difference and demarcation between the way that each study was done. The Craig/Amernic study went for the qualitative dimensions whereas the Yonnedi study went for a much more quantitative direction with a standardized measurement instrument. Truly, any good study would have to blend the two methods because statistics can be deceiving and the qualitative aspect of this subject simply cannot be ignored. Indeed, there are probably instances where making (or keeping) a business private is the optimal way to proceed and there are also times where going the public route makes a lot more sense, probably mostly for a venture capital/investment reason that a private solution would not be able to address (Craig & Amernic, 2008)(Yonnedi, 2010).

Interpretation of Results

The results of the two studies were noticeably different, but they were not conflicting. The Craig/Amernic study focused on using standardized and industry-accepted language to describe corporate progress and processes whereas the Yonnedi study focused on the fact that the expected change variables vis-a-vis privatization and what comes with vary a lot based on the overall ownership structure of the companies being assessed. Again, the results are not conflicting as they do not contain bits of information that are glaringly at odds. The two studies just look a different dimension and part of the privatization process and debate but both of the studies use real-world anecdotes and/or statistical data to come to their conclusions rather than engaging in "ivory tower" supposition that is not reliable in the least (Craig & Amernic, 2008) (Yonnedi, 2010).

Readability

The overall readability and user-friendly nature of both studies is quite good. For someone that is at least somewhat versed in the relevant topics surrounding global firms and how well (or even if) they go private and the results that ensue, then either one of these studies would not be a hard read. However, a person reading the Craig and Amernic study would probably be a lot more informed if they were completely or somewhat new to the topic because the foundations and definitions offered in the literature review and theory explanation is much more expansive than the Yonnedi study (Craig & Amernic, 2008)(Yonnedi, 2010).

A delicate balance has to be struck between keeping the study readable and "dumbing it down" too much for people that are not as informed on the subject. Generally, so long as the studies stay away from getting too technical and entrenched in using words and terms that not even most business professionals even know and as long as the words and conclusions are not too simplistic, then anything between that is generally fine. It is a matter of keeping it complex enough to be truly applicable to real world practice and simple enough so that people can easily comprehend what is being said and what led to the conclusions. Both of these studies are easily within the proper spectrum (Craig & Amernic, 2008)(Yonnedi, 2010).

Contribution of the Research to the Body of Knowledge

As noted above, neither of the studies are perfect because they seem to take too high-level or simple an approach to what is being covered. There is something to said for taking on too broad a topic and there is also something to be said for drilling down too far. The overall level of perspective in these two studies is not the problem. Instead, it is more of an issue of not going far enough in the methodology as opposed to the root questions simply being wrong. Even so, there are no obvious fatal flaws in either study. The feel and function of each study is noticeably different, but it is clear that the researchers behind each study had at least a decent understanding of how the study should progress and why. The author of this response just feels that they could have (and should have) perfected their approach just a bit more (Craig & Amernic, 2008)(Yonnedi, 2010).

Conclusion

The two studies are both high-quality and both appear in prestigious academic journals. It is clear that the people behind these studies are professional but there is perhaps a bit of academic morass coming into play. Many people point to a disconnect between the conclusions of the academic world and the actual results that ensue in the "real" world. It is true that many academic minds cut their teeth in the business sphere (and/or they are still there and do academic work on the side) but there are also academic minds that are very insulated and are perhaps not able (or perhaps willing) to open up entirely to what is really going on and why. Economics would be a good example. Some people feel that Keynesian economics is the end-all be-all while others feel that governments spending heavily during a recession (a key Keynesian facet) is lunacy. Business and privatization as a topic would be no different and that's never going to change. This is why using numbers alone is wrong and using non-numerical data is also a stunted point-of-view. The whole package needs to be there for the research to truly mean something and be valid in the eyes of anyone that has an open mind.