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Observation means viewing or seeing. Observation may be defined as a systematic viewing of a specific phenomenon in its proper setting for the specific purpose of gathering data for a particular study. Observation is classical method of scientific study.

General Characteristics of Observation Method

Observation as a method of data collection has certain characteristics.

1. It is both a physical and a mental activity: The observing eye catches many things that are present. But attention is focused on data that are pertinent to the given study.

2. Observation is selective: A researcher does not observe anything and everything, but selects the range of things to be observed on the basis of the nature, scope and objectives of his study. For example, suppose a researcher desires to study the causes of city road accidents and also formulated a tentative hypothesis that accidents are caused by violation of traffic rules and over speeding. When he observed the movements of vehicles on the road, many things are before his eyes; the type, make, size and colour of the vehicles, the persons sitting in them, their hair style, etc. All such things which are not relevant to his study are ignored and only over speeding and traffic violations are keenly observed by him.

3. Observation is purposive and not casual: It is made for the specific purpose of noting things relevant to the study. It captures the natural social context in which persons behaviour occur. It grasps the significant events and occurrences that affect social relations of the participants.

4. Observation should be exact and be based on standardized tools of research and such as observation schedule, social metric scale etc., and precision instruments, if any.

Use of Observation in Business Research

Observation is suitable for a variety of research purposes. It may be used for studying (a) The behaviour of human beings in purchasing goods and services.: life style, customs, and manner, interpersonal relations, group dynamics, crowd behaviour, leadership styles, managerial style, other behaviours and actions; (b) The behaviour of other living creatures like birds, animals etc. (c) Physical characteristics of inanimate things like stores, factories, residences etc. (d) Flow of traffic and parking problems

(e) movement of materials and products through a plant.

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