Chapter 4

Research Design and Methodology

 Chapter 4: Research Design and Methodology
Chapter Preview

This chapter is concerned with formulating the plans and procedures, measurement instrument
development, methods for data collection, analysis and interpretation. The chapter proposes with
justification the methodology used for finding solutions to the research problems. This chapter
describes the various approaches for research and narrows down to describe the research
approach suitable for the current study.

4.1 Background

The previous chapters were dedicated to problem identification, formulating the research questions
and literature review to determine the work done in the field as well as research gap identification.
The previous chapter proposed the course of action to address these gaps by carrying out a
comprehensive study involving all stakeholders’ viz. Bank senior management, employees,
customers and technology solution providers. In the previous chapter, a model for internet banking
adoption, using constructs from extant literature was also proposed.

4.2 Research Design

The previous chapters discussed the first stage of the study i.e. formulation of the research
definition. Figure 4.1 illustrates the approach for planning applied research. The researcher needs
to perform five activities simultaneously during the research design process viz. selecting a design,
choosing data collection approaches, inventorying resources, assessing feasibility of executing the
proposed approach and determining trade-offs, (Bickman et al, 1998).

Research Design is a “blueprint” for empirical research aimed at answering specific research
questions or testing specific hypotheses, and must specify at least three processes: (1) The data
collection process, (2) The instrument development process, and (3) The sampling process,
(Bhattacherjee, 2012).

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 Stage I Understand the problem
Research
Definition
Identify questions

Refine/revise questions

Sage II Chose design/data

Research collection approaches
Design/Plan

Determine
trade-offs Inventory
resources

Access
feasibility

To Execution

Figure 4.1: Applied Research Planning (Adapted from Bickman & Rog, 1998)

4.2.1 The research design used in this study

The present study comprised of eight phases to understand the problem of low usage of internet
banking from a broader perspective. The methodology employed in each phase is different. Figure
4.2 illustrates the research design employed in this study. The research design was formulated
based on literature review on the internet and internet banking. Existing literature revealed the
various methods researchers employed to study the broad area of internet banking and the
literature was classified into different categories as discussed in chapter 2. The present study was
conducted in different phases. The idea was that the results of all phases, when tied together at the
conclusion stage, would produce illuminating results as compared with looking at the results of
each phase separately. This is true in most mixed methods research where the sum is larger than
the parts.

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 Preliminary information Problem definition Literature review Theoretical
gathering framework

State of the internet Website Semi- Branch IB & IB user IB acceptance

evaluation structured employees’ performance satisfaction model
interviews perception
about IB
Secondary Questionnaire Questionnaire
Secondary Data Data Collection
data Design Design
Questionnaire
Design
Regression Pretest & Pretest &
D pilot test
Construct Ranking Based pilot test
identification from on dissemination
questionnaire Transaction & Pretest &
Document pilot test Hypothesis Data collection Data collection
relationship Studies Testing
scores

Data analysis Data analysis Data analysis

Measurement model Reliability & Data collection Measurement Reliability Measurement Reliability
validity model & validity model & validity
Testing Testing Testing

Structural model Hypothesis Data analysis Structural Hypothesis Structural Hypothesis

Testing model Testing model Testing

Findings, discussion, conclusion & recommendations

Figure 4.2: Research design

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4.3 Research approach

Broadly, research can be classified as inductive and deductive.

Deductive research is a study in which a conceptual and theoretical structure is developed and then
tested by empirical observation; thus, particular instances are deduced from general inferences. For
this reason, the deductive method is referred to as moving from the general to the particular,
(Collis & Hussey, 2009).

Inductive research is a study in which theory is developed from the observation of empirical
reality; thus, general inferences are induced from particular instances, which is the reverse of the
deductive method, (Collis & Hussey, 2009)

Figure 4.3 depicts and explains the deductive and inductive approach of research.

Theory Theory
Tentative
Hypothesis Hypothesis

Observation Pattern

Confirmation Observation

Figure 4.3: The Deductive and Inductive approach to research

Inductive and deductive research is important for the advancement of science. It appears that
inductive (theory-building) research is more valuable when there are few prior theories or
explanations. While, deductive (theory-testing) research is more productive when there are many
competing theories of the same phenomenon and researchers are interested in learning which
theory works best and under what circumstances, (Bhattacherjee, 2012).

Theories have been developed for user acceptance of technology, and extant literature reveals that
researchers have used TRA, TPB, TAM, DTPB, IDT, SCT and other extended and integrated
models for studying internet banking. In this research, deductive research was selected as it was
found suitable for addressing the research problem. It was felt that constructs from various theories
can be borrowed, and a model appropriate for the Indian context can be developed and tested from

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the existing theories. The goal of theory testing is not just to test a theory, but also to possibly
refine, improve, and extend it, (Bhattacherjee, 2012). In the last phase of the study, the proposed
model would be subject to refinement, improvement and making it more parsimonious.

4.4 Research Paradigm

A research paradigm is a framework that guides how research should be conducted, based on
peoples philosophies and their assumptions about the real world and nature of knowledge, (Collis
& Hussey, 2009).

4.4.1 Positivism and Interpretivism

Positivism is an approach that believes that society can be studied using similar scientific
techniques to those used in natural sciences such as physics, chemistry and biology. Interpretivism
is an approach emphasizing that people have consciousness involving personal beliefs, values and
interpretations and this influences the way they act, (Browne, 2006).

The main research objective in the study was to uncover the reasons for the low usage of the
internet-banking channel. In order to identify the reasons for this, eight phases of study were
envisaged. The research would use semi-structured interviews to understand the views of senior
managers, employees and customers about internet banking to confirm the existence of the
constructs found in literature. Survey questionnaires would be used to discover the perceptions of
the bank employees, use a survey questionnaire to test the proposed model for internet banking
acceptance, in addition to collecting information about the functional aspects of internet banking
websites, website traffic and the financial performance data of banks. Therefore, a positivistic
approach was appropriate for the quantitative part of the study. For the qualitative part of the
study, use semi-structured interviews, which require an interpretive approach.

4.5 Broad types of Research Designs

There are five broad type of research designs viz. experimental design, cross-sectional design, case
study design and comparative design. The following Table 4.1 enlists the research strategy based
on the research design.

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Table 4.1 Research strategy and research design, (Bryman, 2008)

Research Design Quantitative Qualitative

Experimental Quantitative comparison No typical form.
between the experimental and
control group with regard to
the dependent variable.
Cross-sectional Survey research or structured Qualitative interviews or focus
observation of a sample at a groups at a single point in time
single point in time.
Longitudinal Survey research on a sample Ethnographic research over a
on more than one occasion. long period, qualitative
interviewing on more than one
occasion.
Case study Survey research on a single Intensive study by
case with a view to revealing ethnography or qualitative
important features about its interviewing of a single case,
nature. which may be an organization,
family or community.
Comparative Survey research in which there Ethnographic or qualitative
is a comparison between two interview research on two or
or more cases. more cases.

4.5.1 Justification for the Selection of the Research Design in this study

The study was proposed to be done in eight phases as discussed in the previous chapter. In phase
1, the plan was to find the state of the internet in India and find factors, which drive/inhibit internet
usage. In phase 2, the plan was to evaluate the websites of banks at a single point of time. In phase
3, the plan was to understand the views of senior bank managers about internet banking and to
understand the perceptions of bank employees about internet banking. In phase 4, the plan was to
investigate financial implications and operational issues related to internet banking. In phase 5, the
plan was to understand the perception of branch employees towards internet banking. In phase 6,
the financial performance of banks who have adopted internet banking was planned to be
investigated, to determine if there is a relation with website traffic. In phase 7, the plan was to
measure the satisfaction level of internet banking users. In phase 8, the plan was to hypothesize
and test a model for user acceptance of internet banking. This model was planned to be tested for
the effects of moderating variables like age, gender, socio-economic status by forming groups. The
study gathers information only once at a single point of time and will also compare the acceptance

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of internet banking among groups. The research design chosen for this study was therefore cross-
sectional and causal comparative.

4.6 Research Method

Many methods do exist for collecting evidence to investigate a problem. Figure 4.4 illustrates the
different research methods available to solve a research problem.

Questionnaire
Structured
Participant
and
Observation
Unstructured
Interviews
Problem to
be
investigated Use of
Experiments Secondary
Data

Comparitive
methods

Figure 4.4: The variety of research methods to solve a research problem (Adapted from
Brown, 2006)

4.6.1 Qualitative, Quantitative and Mixed methods

There are three design approaches: qualitative, quantitative and mixed methods (Bryman, 2008)

4.6.1.1 Qualitative research

Qualitative research can be construed as a research strategy that emphasizes on words rather than
quantification in the collection and analysis of data. Qualitative research is a means for exploring
and understanding the meaning individuals or groups ascribe to a social or human problem. The
process of research involves emerging questions and procedures, data typically collected in the
participant’s setting, data analysis inductively building from a particular to a general theme, and
the researcher making interpretations of the meaning of the data, (Creswell, 2009).

4.6.1.2 Quantitative research

Quantitative research can be construed as a research strategy that emphasizes quantification in the
collection and analysis of data. Quantitative research is a means for testing objective theories by

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examining the relationship amongst variables. These variables, in turn, can be measured, typically
on instruments, so that numbered data can be analysed using statistical procedures, (Creswell,
2009).

4.6.1.3 Mixed methods research

Mixed methods research integrates quantitative and qualitative research within a single project so
that the results are mutually illuminating. The goal of mixed methods research is not to replace
either Quantitative or Qualitative approaches but rather to draw from the strengths and minimize
the weaknesses of both in a single research study and across studies, (Johnson & Onwuegbuzie,
2004). Researchers should collect multiple data using different strategies, approaches, and
methods in such a way that the resulting mixture or combination is likely to result in
complementary strengths and non-overlapping weaknesses, (Johnson & Turner, 2003)

4.6.1.4 Selection and justification for the choice of research method for the study
A comparison of Quantitative, Qualitative and Mixed methods research is shown in Table 4.2
This serves as a guideline for selection of the appropriate method.

Table 4.2: Quantitative, Qualitative and Mixed methods, (Creswell, 2009)

Quantitative Methods Mixed methods Qualitative Methods

 Pre-determined
 Instrument based
questions
 Performance data,
attitude data,
observational data and
census data
 Statistical analysis
 Statistical interpretation
 Both pre-determined and
emerging methods
 Both open and closed-
ended questions
 Multiple forms of data
drawing on all possibilities
 Statistical and text analysis 
 Across databases
interpretation
 Emerging methods
 Open-ended questions
 Interview data,
observation data and
audio-visual data
 Text and image analysis
Themes patterns,
interpretation

(Bryman, 2006) in their article based on content analysis of 232 social sciences articles in which
quantitative and qualitative research was combined, isolated the following justification for multi-
strategy research: triangulation: convergence, corroboration, correspondence or results from
different methods. In coding triangulation, the emphasis was placed on seeking corroboration

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between quantitative and qualitative data. Complementarity: ‘seeks elaboration, enhancement,
illustration, clarification of the results from one method with the results from another’, (Greene et
al., 1989: 259). Development: ‘seeks to use the results from one method to help develop or inform
the other method, where development is broadly construed to include sampling and
implementation, as well as measurement decisions’, (Greene et al., 1989: 259). Initiation: ‘seeks
the discovery of paradox and contradiction, new perspectives of [sic] frameworks, the recasting of
questions or results from one method with questions or results from the other method’, (Greene et
al., 1989: 259). Expansion: ‘seeks to extend the breadth and range of enquiry by using different
methods for different inquiry components’, (Greene et al., 1989: 259).

In the current study, the plan was to explore relevant documents related to the internet to determine
reasons for the low penetration of the internet in India. And, to develop a model for finding factors
that drive /inhibit internet growth, by meeting bank customers and bank officials to identify the
reasons for the low usage of this channel, and reading extant literature to uncover possible
answers. Then the plan of action was to study internet banking websites based on their functional
aspect, conduct interviews to find the perception of senior bank managers on internet banking, to
conduct a survey research to find the perception and opinion of bank employees about internet
banking and finally to develop a model to explain user acceptance of internet banking. As such,
the study has eight phases and the data collection methods are different for all the four phases. In
phase 1, the plan was to study the state of the internet and identify factors that drive/ create
hindrances to the growth of the internet and develop a model to explain the same. In phase 2, the
plan was to evaluate internet-banking websites of banks operating in India by directly viewing
their websites. In phase 3, the plan was to conduct a semi-structured interview with senior bank
managers, technology service providers, employees, users and non-users of internet banking which
would have both open and closed ended questions. In phase 4, the plan was to investigate financial
implications and operational issues related to internet banking. In phase 5, the plan was to capture
the perception of bank employees about internet banking through a questionnaire, which would
have only closed ended questions. In phase 6, the plan was to study the relation between website
traffic and the financial performance of banks. In phase 7, the plan was to measure the satisfaction
level of internet banking users and the final plan was to test the proposed model developed by
using key constructs borrowed from previous theories and information systems research using an

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advanced statistical method for internet banking acceptability. The research plan had all the
characteristics of a mixed method research.

4.7 Data Collection

As the research was conducted using a mixed method approach. The data collection was done
using more than one way using documents from the Reserve Bank of India (RBI), Indian Banks
Association (IBA), Semi-structured questionnaires and Survey questionnaires. This approach of
collecting data is called triangulation. In business and management, there is a need for
triangulation in order to explore for accuracy of the data and alternate explanation. The idea is to
collect data by different means and hope there is convergence of the truth, (Adams et al, 2007).

(Stake, 1995) proposed different protocols for triangulation

Data source triangulation: The analyst asks whether or not they are likely to be reporting is
likely to be a constant at other times or circumstances

Investigator triangulation: Other researchers look at the same scene. Alternatively, findings can
be presented to other researchers to discuss alternative interpretation.

Theory triangulation: Multiple investigators agree as to the meaning of the phenomenon.

Methodical triangulation: This involves using a variety of data collection methods to build
confidence in the interpretation made.

Member triangulation: The respondent is asked to review the material for accuracy and to add
further comments that might aid description and explanation. By doing so, the actors personally
help to triangulate the researchers observation and interest.

4.7.1 Data collection method employed in this study

This study used semi-structured interviews, survey questionnaires, documents pertaining to

internet banking. Figure 4.5 shows the data collection methods used in this study.

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 Semi-
structured
interviews

Survey Document/
Questionnaire website studies

Figure 4.5: The data collection approach used in the study

The study was conducted in 8 phases, and the requirement of each phase captures internet banking
from a different perspective. Triangulation may also help to uncover the deviant or off-quadrant
dimension of a phenomenon. Different viewpoints are likely to produce some elements, which do
not fit a theory or model, (Jick, 1979). If the findings are corroborated across different approaches
then greater confidence can be held in the singular conclusion. If the findings conflicts, then the
researchers have greater knowledge and can modify interpretation and conclusions accordingly. In
many cases, the goal of mixing is not to search for corroboration, but rather to expand one's
understanding, (Onwuegbuzie & Leech, 2004).

In cases where a survey questionnaire was used, the questionnaire was sent along with a cover
letter informing the participant about the purpose of the research with an assurance that the
responses will be kept confidential. This is as suggested in literature to overcome non-response
bias, (Churchill, 1995, Singer, 1978).

Phase 1: The state of the internet as to the number of users in different countries. Factors, which
act as drivers and hindrance to internet growth, were identified by using secondary data from the
Internet Society (ISOC).

Phase 2: In order to evaluate the websites from the user’s viewpoint based on the functionality
dimension. The internet-banking website of banks in India was investigated by manually accessing
them. Information about the multilingual option was checked on the individual banks websites.
Here the unit of analysis is the web page.

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Phase 3: The perceptions of senior bank management, employees, users and non-users of internet
banking of were captured through semi-structured interviews and questionnaires. As it is, a known
fact that senior managers do not have the time and inclination to fill a survey questionnaire a more
pragmatic approach was taken. A road map of questions were prepared, (see Appendix B) and
posted to them wherever possible before meeting them in person for the interview. This made
them comfortable while responding. This approach is the semi-structured approach. When
customers at the bank were approached with questionnaires, the response from them was negative
and many of them refused to take part in the study. The reason for refusal to participate in most
cases was that they were in hurry to finish their banking tasks and attend to some other important
tasks. The other reasons that can be attributed was lack of trust when approached by a stranger in
the bank premises. It was found that instead of administering a formal questionnaire customers felt
easy when asked questions in an informal way, by explaining the intent of the research. The bank
customers’ degree of confidence improved when they were told that the research was for academic
purpose only, which was evident from the fact from their openness in communication.

Initially certain screening questions were asked to identify users and non-users of internet banking.
A list of guided probing questions, (see Appendix B) was used to gather opinions. The interview
was conducted without any bias to the positive and negative aspects of internet banking and the
interviewee was free to express his opinion for and against internet banking.

Phase 4: Information pertaining to internet banking was obtained by filing 13 questions under the
Right To Information Act, 2005 to all public sector banks, (see Appendix C).

Phase 5: For determining the perception of bank employees towards the internet, banking extant
literature review revealed that one such research was done in Greece, (Lymperopoulos &
Chaniotakis, 2004). The questionnaire was replicated with some modification as per the Indian
context, (see Appendix B) and was administered to bank employees.

Data was collected by visiting bank branches personally and explaining the objective of the study
to the Branch Managers and assuring them of full confidentiality of the information the employees
provide. The Branch Managers were requested to get the questionnaire filled from the employees.

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The responses were collected either on the same day after working hours or on the next day as the
Branch Managers did not want to disturb the employees during the customer working hours. A
paper-based questionnaire was used, as it was difficult to get email addresses of bank employees
and motivate them to participate in this study electronically.

Phase 6: Financial performance measures of banks in India from their yearly audited results for
the year ending March 2011 from Indian Banks Association and website traffic statistics from
Alexa, (a web traffic reporting company).

Phase 7: Data collection was done using a self-completion questionnaire, which had 13 questions
in all regarding satisfaction of internet banking. The questions were pertaining to content,
accuracy, and format, ease of use and timeliness of the website. Two methods were used for
administering the questionnaire, a Google form was created, and invitations to participate were
sent via emails to respondents who were randomly selected from a mailing list. The emails had a
covering letter with a link to the form and a paper based version of the form.

Phase 8: Data collection for testing the proposed model was done using a self–completion
questionnaire. Two ways were used for administering the questionnaire, a web form was created,
and invitations to participate were sent via emails to respondents who were randomly selected
from a mailing list. The emails had a covering letter with a link to the form and a paper based
version of the form.

Table 4.3 shows that similar variables being used during the 8 phases of the study to ensure
accuracy and confidence while drawing conclusions. The data source used in this study therefore
supports triangulation.

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 Table 4.3: Data source supporting triangulation
Information obtained Source 1 Source 2 Source 3 Source 4 Source 5 Source 6 Source 7 Source 8
Cost Reduction   
Increase in sales   
Service differentiation  
Decrease in employee strength  
Banks initiative to promote internet banking    
Trust  
Queue minimization  
Cost-reduction for banks  
Risk  
Service differentiation  
Non-Bank competition  
Usefulness   
Ease of Use   
Self-efficacy  
Subjective Norm  
Image  
Intention to use internet banking  
Trialability  
Government support   
Actual usage   
Source 1: State of the internet.; Source 2: Internet Banking website evaluation; Source 3: Semi-structured interviews; Source 4: Data from RTI application; Source 5: Perception of
bank employees towards Internet Banking; Source 6: Relationship between website traffic and banks financial performance.; Source 7: Internet Banking satisfaction study; Source
8: A model for explaining the factors responsible for Internet banking use.

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4.8 Sampling Techniques

Sample selection in a survey based research is important, as the time constraints and the nature
of this study is dynamic and the entire population cannot be considered. Sampling techniques can
be categorized into two heads 1.] Probability Sampling 2.] Non-Probability Sampling.

Probability Sampling has an advantage, as the sampling error can be calculated. Methods of
probability sampling include random sampling, systematic sampling, and stratified sampling.

Non-probability sampling involves selecting samples such that the possibility of being selected is
known. Non-probability sampling includes convenience sampling, judgment sampling, quota
sampling, snowball sampling.

Figure 4.6 illustrates the Taxonomy of Sampling Designs (Dillon et al. Marketing Research, third
edition, pp. 233), which is useful for selecting the sampling method

Sampling
Design

Probability Nonprobability
Sampling Sampling

Convenience Quota Judgemental

Sampling Samples Sampling
Simple
Stratified Cluster
Random
Sampling Sampling
Sampling

Proportionate One-Stage Systemic Two-Stage

Optimal Allocation
Allocation Cluster Sampling Cluster

Figure 4.6: Sampling Designs (Adapted from Dillon et al., 1993)

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4.8.1 Selecting the sampling technique and justification for the choice

Phase 1: ISOC conducted a global online survey to find the opinion of individuals from different
nations about increasing government intervention to control the internet. The sampling method
adopted was convenience sampling.

Phase 3: A person at the senior management level was identified through the members of the
Thesis Advisory Committee for each of the three categories of banks. The objective of the study
was explained to the identified persons, and after interviewing them, the snowball approach was
used, in which the senior manager identified the right people in either their bank or their friends
in other banks for further interviewing. For interviews with users and non-users of the internet,
banking purposive sampling was used.

Phase 5: In this phase, the plan was to capture the perception of bank employees about internet
banking. In order to get a broader view of all the categories of banks having operations in India,
the research experts and the Thesis Advisory Committee (TAC) were of the view that Stratified
Sampling should be conducted for determining the perceptions of senior management and
employees of the banks. The selection of stratified samples was done using the following
procedure, (Dillon et al. marketing research third edition pp. 261):

Deciding on the classification variable and the number of strata to be employed.

Obtaining a list of all elements in the target population; and based on the classification variable
each bank is assigned to one stratum.

Each bank in every strata was numbered from 1 to N.

The number of bank employees to be selected from each stratum was decided.

The target audience i.e. bank senior managers, bank employees were divided into different
segments, and then samples were drawn from them. The various strata was formed on the basis
of different categories of the banks viz. nationalized, new private, old private, co-operative
scheduled and foreign banks.

Phase 7 and Phase 8

Although random sampling would have been the best method to get, a representative sample of
the population in this study, random sampling could not be employed for the following reasons

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1. Banks were reluctant to reveal details of the customers using internet banking.
2. The population size was not known
3. The objective was to understand the decision factors that led to the adoption of internet
banking and not to test the differences between adopters and non-adopters of internet banking.
This required respondents to be from a highly specific demographic profile. The respondents for
this study had to be computer literate, having internet access and using the internet-banking
channel.

Due to these reasons, convenience sampling had to be used in this phase of the study.

As per (Saunders, 2000), “… the inability to specify a sampling frame may indicate the use of
one or a number of non-probability sampling techniques.” (Saunders, 2000) also recommend use
of purposive or judgment sampling in such cases whereby the researcher chooses the cases that
will facilitate the answer for the research questions. (Creswell, 2003), argues that approaching
people for collection of data was mainly based on their convenience and availability to complete
the questionnaire.

4.9 Sample Size

(Sekaran, 2006), discusses a pragmatic approach for selection of sample size proposed by,
(Roscoe, 1969) 1.] Sample sizes larger than 30 and less than 500 are appropriate for most
research. 2.] Where samples are to be broken down into subsamples based on gender,
socioeconomic status, age then a minimum sample size of 30 for each category is necessary. 3.]
In multivariate research, the sample size should be preferably 10 times or more than the number
of variables in the study.

In phase 1, the data was obtained from an online survey conducted by the Internet Society to
discover the opinion of the internet users on various issues. Questions pertaining to the four
hypothesized constructs were identified and were used in this research. Permission to use this
data was obtained under the Creative Commons Attribution-Non-Commercial-Share Alike 3.0
Unported License. 535 responses from India were selected from 10000 responses in the dataset,
which covered 20 countries.

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In phase 2, Fifty-two banks having internet banking facility were chosen in the study, of which
26 were public sector banks, 20 were private sector banks and 6 were foreign sector banks.

Phase 3 of the research was qualitative in nature. A semi-structured interview was conducted to
gather information about the view of the bank’s senior management on internet banking. Here,
only a small number of individuals representing all the various categories of banks were chosen.
The sample size used in the semi-structured interviews was 32, and 22 of these were male and 10
females.

In phase 4, applications under the RTI were posted to public sector banks under the Act’s
purview.

Phase 5 of the research uses factor analysis. The primary purpose of choosing a sample size is to
obtain factors that are stable and should be close estimates of the population factors. Literature
on sample size required for factor analysis shows difference of opinion among researchers on
this issue. There are two schools of thought with regard to the minimum sample size for factor
analysis. One suggestion is about the total number of observations (N). (Gorsuch, 1983;
Guilford, 1954; Kline, 1979; Hutcheson & Sofroniou, 1999) suggested an absolute minimum
varying from 100 to 200 samples. The other suggestion is the subject to variable ratio (N:p).
(Nunnally, 1978; Hair et al., 1998; Baggaley, 1982; Brislin et al., 1974) recommend a ratio
varying from 2:1 to 20:1. (MacCallum et al., 1996) argue that the minimum sample size or the
minimum ratio of the sample size to the number of observed variables is not invariant across
studies and is dependent on the level of communality of the variables and the level of over
determination of the factors. 170 responses were obtained for analysis.

In phase 6, the sample comprised of 25 public sector banks, 6 new private sector banks, 10 old
private sector banks and 4 foreign banks in India, in line with the banking structure. The unit of
analysis was the bank.

Phase 7 and Phase 8 of the research uses Structural Equation Modelling (SEM). It is the general
assumption that the bigger the sample size, lesser the sampling error. The determination of
sample size when using SEM depends on the estimation method and the complexity of the
model. In this study, the Maximum Likelihood Estimation (MLE) was used. (Hair et al, 1998),
recommend a minimum sample size of 100 to 150 for using the MLE method of SEM. In MLE,
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the sensitivity to detect differences in the data increases with increase in sample size, resulting in
indication of poor fit when sample size exceeds 400. (Hoelter, 1983), suggests that a sample size
of 200 is a critical sample size and all models should be tested for this sample size. (Kline, 2005)
suggests that the choice of sample size depends on the complexity of the model and models,
which are not parsimonious, should be tested with more than 200 samples. (Kline, 2005),
suggests a sample size of 5 to 20 times of the number of parameters to be estimated.

The choice of the sample size for SEM cannot be too small nor can it be too large. Statistical
results from a very small sample size are invalid and a large sample size will result in a poor fit
model. (Schumacker & Lomax, 1996) reported that most of the studies using SEM had a sample
size between 200 and 500 subjects. The proposed model was discussed with Prof. Avinandan
Mukherjee, of Montclair University after his presentation at NMIMS University. He was of the
opinion that the sample size should be somewhere between 200 to 400 samples. In phase 7 of the
study, 387 usable responses were obtained. In phase 8 of the response, the sample size was 300.

4.10 Measurement, Scale development and Questionnaire design

4.10.1 Measurement

Measurement is the process of describing some property of a phenomenon of interest, usually by

assigning numbers in a reliable and valid way, (Zikmund & Babin, 2009). Measurement refers to
careful, deliberate observations of the real world and is the essence of empirical research,
(Bhattacherjee, 2012). In the previous chapter, various theories were discussed and a model was
proposed. The variables in the model were also conceptualized. In order to create measures, there
is a need for operationalization of the constructs.

Operationalization: Most of the theoretical constructs defined in the proposed model were
multidimensional and use multiple questions for measurement of the same construct, thereby
increasing the reliability of the measurement. These multidimensional constructs are also called
Latent Variables. The purpose of operationalization was to develop items for measuring these
constructs, which have more than one underlying dimension. The operationalization of the
theoretical constructs were required in phase 1, phase 7 and phase 8.

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Phase 1: In this phase, secondary data was used and the questions corresponding to the
hypothesized constructs were identified as in Table 4.4.

Table 4.4: Constructs and corresponding items (phase 1)

Construct Items References

People need to have access to better and cheaper training (ISOC survey,
opportunities. 2012)
Governments need to place a higher priority on expanding (ISOC survey,
the internet and its benefits in my country 2012)
Local universities and technical institutes need to offer basic (ISOC survey,
and advanced computer and internet technical training. 2012)
Government Tax reductions need to be given to small and medium-sized (ISOC survey,
Support businesses that are using the internet to conduct business. 2012)
Governments should consider ways to provide easier access (ISOC survey,
to cheaper computers. 2012)
Governments should consider ways to create or encourage (ISOC survey,
competition amongst Internet Service Providers (ISP). 2012)
Government control would put limits on the content I can (ISOC survey,
access. 2012)
Government control would make me fearful that my actions (ISOC survey,
were under surveillance 2012)
Government Government control would limit my freedom of expression (ISOC survey,
Control 2012)
Government control would make the internet too controlled (ISOC survey,
2012)
Government control would inhibit the growth of the internet (ISOC survey,
2012)
Government control would make me use the internet less (ISOC survey,
2012)
Freedom of expression is guaranteed on the internet. (ISOC survey,
2012)
Attitude The internet is essential for my access to knowledge and (ISOC survey,
education. 2012)
The internet does more to help society than it does to hurt it. (ISOC survey,
2012)
My life has improved due to using the internet. (ISOC survey,
2012)

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Phase 7: In this phase, the five constructs used for studying end user computing satisfaction of
internet banking was operationalized using the items shown in Table 4.5.

Table 4.5: Constructs and the corresponding items (phase 7)

Construct Items References

Does internet banking provide the precise (Doll et al, 1994;
information you need? Pikkarainen et al, 2006)
Does information content on the internet- (Doll et al, 1994;
Content banking website meet your needs? Pikkarainen et al, 2006)
Does the internet-banking website provide (Doll et al, 1994;
reports that meet your need? Pikkarainen et al, 2006)
Does the internet-banking website provide (Doll et al, 1994;
sufficient information? Pikkarainen et al, 2006)
Is internet banking accurate? (Doll et al, 1994;
Accuracy Pikkarainen et al, 2006)
Are you satisfied with the accuracy of the (Doll et al, 1994;
internet-banking website? Pikkarainen et al, 2006)
Is the information clear from the internet (Doll et al, 1994;
Format banking website? Pikkarainen et al, 2006)
Is the website layout and format of providing (Doll et al, 1994;
information good? Pikkarainen et al, 2006)
Is internet banking user friendly? (Doll et al, 1994;
Ease of Use Pikkarainen et al, 2006)
Is internet banking easy to use? (Doll et al, 1994;
Pikkarainen et al, 2006)
Do you get the information you need in time? (Doll et al, 1994;
Timeliness Pikkarainen et al, 2006)
Does the internet-banking website provide up to (Doll et al, 1994;
date information? Pikkarainen et al, 2006)

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Phase 8: in this phase, many of the latent constructs were from existing literature used in TAM,
TPB, and SCT.

Perceived Usefulness (PU)

Perceived Usefulness was operationalized using the following items:
Construct Items References

Perceived Using internet banking enables me to (Venkatesh et al., 2003)

Usefulness accomplish my banking tasks quickly.
(PU) I find internet banking very convenient for (Ramsay & Smith,
managing my finance. 1999)
Internet banking enables me to utilize my time (Walker and Johnson,
effectively by not having to stand in long 2005; Giannakoudi,
queues at the bank counter. 1999)
I find that internet banking is useful in (Venkatesh et al., 2003)
conducting banking transactions
Internet banking enables me to access banking (Lockett & Littler,
services at any time. 1997)
Internet banking is available 24 X 7 and (Lockett & Littler,
therefore enables me to carry out banking 1997)
whenever I like.
With internet banking, I can access my bank (Lockett & Littler,
account even on bank holidays. 1997)
Internet Banking enables me to reduce banking (Ramsay & Smith,
cost, such as reduced bank charges and 1999)
transportation cost.
Internet banking enables me to get correct (Moon & Kim, 2001)
information unlike branch banking where I get
inappropriate response from bank staff.
Internet banking eliminates geographic (Evans & Wurster,
limitation and increases flexibility and mobility 1997)
Internet banking is more useful than other (Thornton & White,
existing channels like bank branches, ATMs 2001)
and phone banking.

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Perceived Ease of Use (PEU)
Perceived Ease of Use was operationalized using the following items:
Construct Items References

It is easy to use internet banking. (Davis, 1989; Adams et al.,

1992)
It is easy to learn how to use internet (Wang et al, 2003 ; Adams
banking. et al., 1992)
My interaction with internet banking is clear (Davis, 1989; Agarwal &
and understandable Prasad, 1997; Moore &
Perceived Ease Benbasat, 1991)
of Use (PEU) It is easy for me to become skilful at using Wang et al., 2003
internet banking.
Using internet banking does not require a Venkatesh & Bala, 2008
lot of mental effort.
Using internet banking increases the quality Venkatesh & Bala, 2008
of my banking services output with minimal
efforts.
Internet banking is flexible to interact with. Venkatesh & Bala, 2008

Trust (TRU)
Trust was operationalized using the following items:

Construct Items References

Trust (TRU) I trust that the internet banking systems (Mukherjee & Nath, 2003)
not to disclose my personal information.
I trust the banks to keep customer data (Mukherjee & Nath, 2003;
securely. Ramsay & Smith, 1999)
I trust the technology of internet banking. (McKnight & Chervany,
2002)
I trust the privacy statement on the bank’s (McKnight & Chervany,
web page to guarantee privacy of my 2002)
personal data.

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Perceived Risk (PR)
Perceived Risk was operationalized using the following items:
Construct Items
Perceived Risk I am unsure if internet banking performs
(PR) satisfactorily.
Overall, I feel internet banking is risky.
I believe that money can easily be stolen
while using internet banking
Internet banking Self-Efficacy (IBSE)
Internet Banking Self-Efficacy was operationalized using the following items:
Construct Items
Internet I would be confident in using internet
Banking Self- banking even if there is no one around
Efficacy (IBSE) to show me how to use it.
I would be confident about using
Internet banking even if I have never
used a system like it before.
I would be confident in using Internet
banking even if I have only the online
instructions for reference.
I would be confident in using internet
banking, if I had seen someone else
using it before trying it out myself.
References
(Cunningham et al., 2005;
Featherman & Pavlou, 2003)
(Ndubisi & Sinti, 2006;
Featherman & Pavlou, 2003)
(Ndubisi & Sinti, 2006;
Featherman & Pavlou, 2003)
References
(Compeau & Higgins,1995)
(Compeau & Higgins,1995)
(Compeau &
Higgins,1995;Wang et al,
2003)
(Compeau & Higgins,1995)
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Internet Usage Efficacy (IUE)
Internet Usage Efficacy was operationalized using the following items:

Construct Items References

Internet Usage I feel confident to open and close the (Torkzadeh et al, 2006;
Efficacy (IUE) web browser like the internet explorer. Brown, 2006)

I feel confident in entering the website Self-developed for this study

address on the address bar of the web
browser.

I feel confident to login to the website Self-developed for this study

using my username and password.

I feel confident in accessing and Self-developed for this study

uploading information on social
networking websites such as facebook,
orkut, g+, twitter etc.

I feel confident in using search engines (Brown, 2006)

like google, bing etc. to search for
information on the web

I feel confident chatting with people on Self-developed for this study

messenger.

I feel comfortable to buy products Self-developed for this study

online using credit /debit cards

I feel confident booking airline/train Self-developed for this study

tickets using the internet.

I feel confident in setting my browser Self-developed for this study

window properties as per my
requirement

I feel confident searching and (Torkzadeh et al., 2006)

comparing products and services using
the internet.

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Subjective Norm (SN)
Subjective Norm was operationalized using the following items:

Construct Items References

Subjective My decision to adopt internet banking is (Ajzen, 1991; Fishbein &

Norm (SN) influenced by my friends. Ajzen, 1975; Taylor & Todd,
. 1995)
My decision to adopt internet banking is (Mathieson, 1991; Ajzen,
influenced by my family/relatives. 1991)
My decision to adopt internet banking is (Taylor & Todd, 1995;
influenced by my colleagues/peers. Ajzen, 1991)

Government support (GS)

Government support was operationalized using the following items:

Construct Items References

Government Government of India supports and
support (GS) promotes usage of the internet and
ecommerce.
Government of India is active in setting
up facilities such as providing adequate
telecommunication facilities, which will
be an enabler of internet banking.
Government of India has framed good
regulations and laws for Information
Technology use.
(Teo et al., 1997; Tan & Teo,
2000)
(Teo et al., 1997; Tan & Teo,
2000)
(Teo et al., 1997; Tan & Teo,
2000; Giannakoudi, 1999)

Banks Initiative (BAI)

Banks Initiative was operationalized using the following items:

Construct Items References

Banks Initiative My bank promotes internet banking. Self-developed for the study
(BAI)
My bank updates the information on the Self-developed for the study
internet-banking website regularly.
My bank offers a fully transactional Self-developed for the study
website, which is user friendly.
My bank updates me regularly about the Self-developed for the study
benefits of using internet banking.

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Trialability (TRI)
Trialability was operationalized using the following items:

Construct Items References

Trialability Before deciding whether to use internet (Moore & Benbasat, 1991)
(TRI) banking, I can properly try it out.
Internet banking is available to me (Moore & Benbasat, 1991)
adequately for trial
My bank permits me to use internet (Moore & Benbasat, 1991)
banking on a trial basis long enough to
see what I can do.

Image (IM)
Image was operationalized using the following items:
Construct Items References

Image (IM) If I were to adopt internet banking, It (Karahanna, 1999;

would give me higher status amongst my Moore & Benbasat,
peers. 1991)
People who use internet banking have (Moore & Benbasat,
more prestige than those who do not. 1991)
Having internet banking is trendy amongst (Moore & Benbasat,
my peers. 1991)
People who use internet banking have a (Moore & Benbasat,
high profile. 1991)

Attitude (ATT)
Attitude was operationalized using the following items:
Construct Items References

Attitude (ATT) In general, I have a positive opinion about (Bhattacherjee, 2001)

internet banking.
I like the idea of using internet banking. (Tan & Teo, 2000)
In my opinion, it is desirable to use internet (Tan & Teo, 2000)
banking.

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Behavioural Intention (BI)
Behavioural Intention was operationalized using the following items:
Construct Items References

Behavioural If I have the facilities required for using (Wang et al., 2003;
intention (BI) Internet Banking, I intend to use it. Wu &Wang, 2005)
I plan to experiment with or use internet (Venkatesh et al., 2003;
banking regularly in the next six months. Webster & Wind, 1972)
In the future, I intend to continue using (Karahanna et al., 1999;
internet banking. Agarwal & Prasad, 1997)

Actual Usage (AU)

Actual Usage was operationalized using the following items:
Construct Items References

Actual Usage How long have you been using the internet (Moon & Kim, 2001)
AU) banking facilities?
(self-reported)
On a weekly basis, how many times do you (Moon & Kim, 2001)
use internet banking?

4.10.2 Measurement scale

Measurement items that are a collection of items combined into a composite score and intended
to reveal levels of theoretical variables not readily observable by direct means are often referred
to as scales, (DeVellis, 2011). Table 4.6 gives a summary of the types of measurement scales and
the operations possible on using these scales.

Table 4.6: Types of Measurement scale (adapted from Dillon et al marketing research):

Scale Basic Empirical Operations Permissible Statistics

Nominal Determination of equality Number of cases, percentages, mode
Ordinal Determination of greater or less Mode, Median, Percentages
Interval Determination of equality of Arithmetic mean, standard deviation,
intervals or differences product-moment correlation
Ratio Determination of equality of Coefficient of variation.
ratio

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Because of the inherent limitations of single-item measures, respondents usually are
administered two or more measures, referred to as a scale, they are alternative indicators of the
same underlying construct, (Churchill, 1979).

4.10.2.1 Format for measurement

Composite scale
In this research, the underlying latent constructs Perceived Usefulness, Perceived Ease of Use,
Trust, Perceived Risk, Internet Banking Self-Efficacy, Internet Usage Efficacy, Subjective
Norm, Government Support, Bank’s Initiative, Trialability, Image, Attitude, Behavioural
Intention are measured using a Likert scale. The Likert scale includes many scale items. Each
item in the scale measures some aspect of the underlying construct. The respondent is given the
operational definition of the construct and views on agreement or disagreement are sought using
a five point scale ranging from strongly disagree to strongly agree. The total score for a construct
was obtained by taking the mean of the numerical score assigned by an individual to each item.

Index
To classify the respondents based on their socio-economic status. In this research, the new socio-
economic classification method developed by the Market Research Society of India (MRSI) and
Media Research Users’ Council (MRUC) based on two variables: education of the chief-earner
and number of consumer durables and the land owned by the family, (see Appendix B). The new
socio-economic classification system has 12 grades A1, A2, A3, B1, B2, C1, C2, D1, D2, E1, E2
and E3.

4.10.3 Questionnaire design

Phase 1.
In this phase, documenting studies for determining the state of the internet was done. It was
found that government regulation had a significant role in monitoring, controlling and promoting
the internet. The data for this research was obtained from an online survey conducted by the
Internet Society to find the opinion of internet users on various issues. Questions’ pertaining to
the hypothesized constructs were identified and was used in this research.

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Phase 2.
In this phase, a questionnaire was not used because it involved capturing website features of all
banks.

Phase 3.
Semi-structured interviews consisting of predetermined questions relating to domains of interest,
administered to a representative sample of respondents to confirm the study domains and identify
factors, variables and items or attributes of variables for analysis or use in a survey, (Schensul et
al., 1999).

In this phase, a semi-structured interview was conducted. The guidelines of the interview were
prepared beforehand. The questions were meant for senior management, (see Appendix B). The
basic aim was to make the respondent talk freely without any hesitation. Some facts and figures
about internet banking users were also collected. This was done by sending an email

Phase 4.
Questions were framed and sent as an application using the format prescribed under the Right To
Information Act, 2005.

Phase 5.
The instrument was developed using a two-part questionnaire. The first part captured
respondent’s characteristics and some basic information such as age, gender, education level,
work experience, hierarchy in the bank, bank’s category and size. This part of the questionnaire
used a nominal scale. The second part of the questionnaire was developed by borrowing items
from a previous study conducted in Athens, the capital of Greece, (Lymperopoulos &
Chaniotakis, 2004). The second part had items related to the perception about internet banking
and its effect on issues such as cost reduction, bank’s image, queue minimization, increase in
sales, customer alienation, decrease in employees, price competition, service differentiation,
market transparency and risk. In the second part of the questionnaire a five point Likert Scale
was used ranging from 1 –“Strongly Disagree” to 5- “Strongly Agree”.

Phase 6.
In this phase, data about the financial performance of the banks was obtained from the Indian
Banks Association website, the web rank was obtained from Alexa.com, and a questionnaire was
not required.

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Phase 7.
The first part of the questionnaire collects demographic information and the second part used
questions pertaining to content, accuracy, and format, ease of use and timeliness of the website.
A google form and paper version of the questionnaire was created. A covering letter
accompanied the questionnaire.

Phase 8.
The first part of the questionnaire collects demographic information, and the variables were age,
gender, education level. As it is a known fact that respondents are reluctant to enter correct age.
Age of the respondents was captured using categorical ranges to increase the response although
this procedure is not statistically appropriate leading to lowered variability. The gender of the
respondent was captured using a nominal variable. The educational level of the respondent was
captured using a categorical variable. The socio-economic classification index was included in
this part. The second part of the questionnaire had questions relating to the constructs used in the
proposed model for user acceptance of internet banking.

4.10.4 Pre-Test and Pilot Test

Phase 5.
For the preliminary assessment of the questionnaire, to identify problem related ambiguity in
wording, understanding and lay out and to refine the questionnaire based on the feedback of the
respondents, a pre-test was carried out. In the second phase of the study, a pre-test was
undertaken on the employees of HDFC Bank Ltd. Some of the employees found the word
alienation difficult, they also had difficulty understanding the meaning of market differentiation.
Taking this into account simple meanings and explanations were added in brackets for these
questions.

Phase 7.
The instrument was administered to part time Master of Business Administration (MBA)
students of TIMSR, JBIMS, PTVA and some individuals, selected on a random basis to
understand whether the measuring instrument captures all the constructs that were found in
previous studies. A factor analysis and reliability test on the samples obtained after the pilot
study confirmed that the instrument was without any problems.

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Phase 8.
The pre-test of this instrument was carried out by administering the survey instrument face-to-
face to 20 respondents. Respondents were encouraged to point out any adoption of internet
banking related factors that they felt was not included in the questionnaire. Even though the
respondents did not explicitly mention any new factors, that influence adoption of internet
banking, one common observation among all respondents, was that the questionnaire was very
lengthy. The questionnaire was made to look shorter by rearranging the vertical orientation of the
scale anchors and by orienting it horizontally. These modifications made the questionnaire look
short.

A pilot survey is a small-scale survey carried out prior to the final survey to confirm that there
are no possible problems, (Browne, 2006). A pilot study was done on individuals who were
computer literate, had access to the internet and used internet banking. Such individuals were
identified from the faculty, Executive MBA and part time MBA course students of NMIMS
University, Thakur Institute of Management Studies and Research, Jamnalal Bajaj Institute of
Management Studies. A reliability test revealed that the construct of government support, did not
adhere to the standards. Some of the item wordings and ordering were changed.

4.10.5 Questionnaire Administration

Paper based and Electronic survey forms were designed. The advantage of electronic survey
administration is that it eliminates the need for manually typing the response data, and data errors
are minimized. Another advantage is that the questions can be made mandatory, and the
respondent will be prevented from submitting the form if the required (mandatory) questions
have not been answered, which in turn ensures that there is no missing data. The link to the
electronic forms can be sent to selected respondents and can be embedded on a web page.
Electronic administration also eliminates the cost of photocopying and other incidental expenses
towards administration of the survey instrument.

4.11 Data screening and preparation for analysis

Real world data may contain irregularities and anomalies, (Hernandez & Stolfo, 1998). Data
abnormalities are a cause of inaccurate analysis, therefore data needs to be screened, and
necessary correction and statistical techniques need to be applied before analysis. Data screening

127
for out of range values, missing data, outliers, and checks for normality was done prior to
proceeding with statistical analysis. Data screening and preparation was used only in phase 7 and
phase 8 of the study, which involved multivariate analysis.

4.11.1 Missing Data

Missing values occur when to the respondent intentionally does not answer some questions either
because of complexity of the item or the length of the questionnaire or in some cases omission
error. Missing values may also occur due to data entry errors. These types of missing values are
random in nature. The other possibility is that the respondent did not want to respond to the
question and the questionnaire did not have appropriate answer choices. The reason for not
answering can also be due to social desirability issues, if the questions were sensitive. Such
missing values are non-random.

4.11.1.1 Randomness of missing data

Depending on the pattern of the missing data, the following categories have been identified,
(Rubin, 1976). Missing Completely at Random (MCAR), Missing at Random (MAR) and Not
Missing at Random (NMAR).

The Little’s MCAR test is one of the tests to detect if data is missing completely at random. If
Little’s MCAR test shows a significant Chi-Square it indicates that the missing values are not
completely at random.

(Little & Rubin, 1987), suggested that the nature of the missing data can be diagnosed by finding
the correlation of the items having missing data. The Pearson’s correlation between the variables
after replacing all the valid data by one and missing values by zero and if found to be statistically
significant at the 0.05 level for all variable pairs it indicates that the missing variables are
completely at random. However, if the correlation coefficients are significant only for some pairs
of variables it indicates that the data is missing at random.

4.11.1.2 Steps taken to deal with missing data

(Olinsky et al., 2003), suggested that if the percentage of missing data was less than 5% then any
simple mechanism for identification and correction was acceptable.

128
(Kline, 1998), recommends three ways to manage missing data deletion; imputation with
estimates or to model the missing data as a distribution and estimate them.

The regression imputation method was used in this study for missing data imputation, as (Byrne,
2001) pointed out. This means that the imputation is based on variance and covariance and may
lead to biased standard errors in SEM. This method predicts the value of the missing value on the
basis of variables, which are not missing.

4.11.2 Test for Normality

Most of the analysis requires data to follow a normal distribution. Normality violations affect the
estimation procedures in Structural Equation Modelling (SEM) employed in phase 7 and phase 8
of this study. If the data is not multivariate normal, it may falsely increase the Chi-Square
statistics and critical values for evaluating coefficient significance, (Hair et al., 1998; West et al.,
1995). Non-normal data leads to under estimated values of fit indices like Tucker Lewis Index
(TLI), and Comparative Fit Index (CFI). Non-normal data can lead to low standard errors thus
giving false significant parameter estimates, (West et al., 1995). Skewness effect test of mean
and kurtosis effects variance and covariance. Non-normality was checked by inspecting the
Skewness and Kurtosis of the univariate distribution and the Mardia’s multivariate Kurtosis
value. Skewness greater than three and kurtosis greater than ten are potential problems, (Kline,
2005; West et al., 1995).

4.11.3 Outliers

Outliers are cases in the data set that are distinctly different. The presence of outliers can have
adverse impacts on statistical analysis can give rise to negative error variances and can affect the
model fit and the estimated parameters. Outliers can be identified by using the Mahalanobis D2
distance; the higher this distance, the case may be an extreme value and therefore an outlier.
There are two types of outliers, univariate and multivariate. In this study, univariate outliers were
not identified, as the scale used was a five point Likert Scale with anchors from strongly disagree
to strongly agree. Literature reveals different views about outliers. One view is that outliers are
valid observations and should be considered in the analysis. Another view is that the presence of
outliers will have adverse impact on analysis.

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4.11.4 Multicollinearity

Multicollinearity was checked by using bivariate correlation between the various items. It was
found that the correlation values between variables did not exceed 0.8 recommended by (Hair et
al, 2006). If Variance Inflation Factor (VIF) for all the variables is found to be less than 5 it
indicates that multicollinearity is absent.

4.12 Validity and Reliability

Validity
Validity ensures that the concept that is intended to be measured is indeed being measured.
Validity ensures that a certain set of questions, which were meant to measure a concept, is
correctly measuring it.

Content validity
Validity is the indicator as to whether the questions actually measure the construct as it is
required to be measured. Many of the constructs used in the research were borrowed from
previous research after conducting extensive literature review. Therefore, content validity is
assumed present. The reason behind using many constructs from previous research was to avoid
possible measurement errors as establishing validity was not the primary focus of the research.
Moreover, the data obtained in this study was also obtained by means of semi-structured
interviews with senior management officials of the bank and the survey of employees and
customers. A pre-test and pilot test was also performed which ensured validity of the constructs.

Face validity
All the questionnaires used in this study were given to a panel of experts and a few senior bank
managers to ascertain face validity, and comments received from them led to minor changes in
the questionnaire, which led to greater clarity of the questions. The list of items, which were self-
developed for the study, was submitted to a panel of judges for assessing content validity. Prof.
Deb Dulal Dutta Roy of the Indian Statistical Institute, Kolkata who reviewed the questionnaire
made suggestions to modify the conceptual definition of the construct self-efficacy as per the
definitions given by Bandura and Amartya Sen. He also suggested that some items be made
simple and comprehensible and some modifications in the questionnaire design. All these
recommended changes were made to the questionnaire.

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Construct Validity
Construct validity is concerned with determining whether the instrument measures what it is
actually intended to measure, (Churchill, 1995). The measures of validity refer to developing
correct and adequate operational measures for the concept being tested, (Malhotra, 1996).
(Campbell & Fiske, 1959) proposed convergent and discriminant validity. In this part of the
study construct validity was examined by finding convergent and discriminant validity.
Convergent validity was examined to find whether the items of the same construct are correlated
and discriminant validity was used for finding whether the items of a construct do not correlate
on other constructs. The convergent and discriminant validity was established by performing
factor analysis on the data. For adequate convergent validity, it is expected that items belonging
to a common construct should exhibit factor loading of 0.60 or higher on a single factor (called
same-factor loading), while for discriminant validity, these items should have factor loading of
0.30 or less on all other factors, (cross-factor loading) (Bhattacherjee, 2012).

In phase 7 and phase 8, which used structural equation modelling, convergent validity was
established by using three criteria:

1. Factor loading
2. Average Variance Extracted (AVE)
3. Construct Reliability / Composite Reliability

Standardised factor loading of all the items were greater than the recommended value of 0.5,
(Byrne, 2001)

The software IBM SPSS AMOS 21.0.0 (Build 1178) does not have provisions to calculate
Average Variance Extracted (AVE) and Construct Reliability. The formulae and calculations for
AVE and Construct Reliability are as:

AVE = Sum of the squared factor loading / number of items

Construct Reliability = (Sum of factor loading)2 / [(Sum of factor loading)2 +(Sum of
standardized error variance)]

131
AVE should be greater than 0.5 and Construct Reliability should be greater than 0.7, (Byrne,
2001; Fornell & Larcker, 1981). Construct reliability should be greater than 0.6 and AVE should
be equal to or greater than 0.5, (Bagozzi & Yi, 1988)

Discriminant validity is established if the AVE from the construct is greater than the variance
shared between the construct and other constructs in the model, (Chin, 1998). (Hair et al., 2006)
state that if the AVE is higher than the squared inter-scale correlation of the constructs, then the
discriminant validity is supported.

Reliability
Reliability of a measure indicates the extent to which it is without bias and hence ensures
consistent measurement across time and across various items in the instrument, (Sekaran, 2006).
To ensure reliability, several methods have been suggested; test-retest reliability to ensure
stability of the measure over time, parallel form reliability, and internal consistency of measures.
In this study, item reliability and scale reliability were examined.

Item reliability
The squared multiple correlations are an indicator of the communality of the item. Communality
being a measure of the percentage of the variance of the indicator explained by its latent factor is
a measure of the item reliability. The criteria suggested by (Bollen, 1989), was that during the
confirmatory factor analysis in the measurement model, each item should have a squared
multiple correlation greater than 0.5.

Inter-item consistency reliability

Reliability as a measure is established to ensure stability and consistency of the measure. One of
the most often used measures for scale reliability is Cronbach’s alpha. The values of Cronbach’s
alpha were proposed by (George & Mallery, 2003) and shown in Table 4.7 is a commonly
accepted rule of thumb measure for internal consistency.

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Table 4.7: Rule of thumb measures for Cronbach’s alpha

Cronbach’s alpha Internal consistency

Alpha ≥ 0.9 excellent reliability
0.8≤ Alpha<0.9 good reliability
0.7≤Alpha <0.8 acceptable reliability
0.6≤Alpha <0.7 questionable reliability
0.5≤Alpha <0.6 poor reliability
Alpha<0.5 unacceptable reliability

The nearer the Alpha is to one, the greater is the internal consistency. However, a high value of
Cronbach’s alpha of more than 0.9 may indicate redundancy amongst the items in the scale,
(Streiner, 2003). Literature demonstrates that there are varied views on the values of Cronbach’s
alpha. (Hair et al., 2006), suggest that Cronbach’s alpha greater than 0.6 is should be considered
acceptable in exploratory research.

4.13 Analysis plan

In this study, data was collected using the triangulation method. The analysis of this data would
involve univariate analysis, both descriptive and inferential, bivariate analysis method using
Pearson’s correlation and multivariate method, which includes exploratory factor analysis, linear
regression, confirmatory factor analysis and structural equation modelling. In the current study,
the devised plan was to perform:

1. Descriptive Analysis

2. Model Development

In phase 1 of the research, the objective was to identify the factors that act as drivers and
inhibitors of internet usage. The two major constructs affecting attitude and the use of the
internet was identified from literature. In this phase, a three-construct model was identified and
would be tested for model fit using SEM, a second-generation statistical method. In Phase 2 of
the research, the plan was to analyse the content and characteristics of the bank’s websites. In
Phase 3 of the research, it was planned to have descriptive statistics and the principal component
factor analysis, to determine the factors about the perception of bank employees towards internet
banking. In Phase 4 of the research, it was planned to use linear regression to determine the
relation between website traffic and the performance of the bank. In phase 5, an End User

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Computing Satisfaction model was proposed and that the model fit would be tested using SEM.
Phase 6 is concerned with the analysis of the proposed model using SEM. The plan was to make
competing models and make the proposed models more parsimonious.

Tools used for Data Analysis

In phase 3 and phase 4, data collected using the questionnaires were analyzed using IBM SPSS
Statistics version 21. In phase 5, measurement models and structural models were developed
using IBM SPSS AMOS version 21, James Gaskin’s Stats Tool package in Excel.

4.14 Research Boundaries

Literature review reveals that most of the technology acceptance studies are restricted to
developed countries, so there is a dearth of literature on technology acceptance for developing
countries. Taking cognizance of this, the current study is restricted to the acceptance behaviour
of internet banking in India, which is a developing country. The samples used in the current
study are users of internet banking, users from India and employees of banks currently working
in branch offices of Indian banks.

4.15 Research Ethics

Maintaining respondent trust is important in research. Survey questionnaire and semi-structured

interviews were used for data collection for this research. Utmost care with regard to the right to
be fully informed about the research goal, right to choose whether to participate in the research,
right to privacy and confidentiality, right not to be deceived due to participation as subjects in the
research, were taken as the research involved human subjects. In the current research, the
international code on market and social research has been adopted which defines market and
social research as the systematic gathering and interpretation of information about individuals or
organizations using the statistical and analytical methods and techniques of applied social
sciences to gain insight or support decision making. The covering letter distributed along with
the questionnaires assured respondents that their identity will not be revealed to the user of the
information without explicit consent and no sales approach will be made to them as a direct
result of their having provided information.

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Chapter Summary

The Table 4.8 below summarizes the research design used in the current study.
Table 4.8: The summary of the research design used in this study
Philosophical worldview Positivism
Research approach Deductive
Time Horizon Cross-sectional
Data Collection Document analysis, Survey questionnaire and
Semi-structured interview (Triangulation)
Data analysis Structural Equation model, Regression,
correlation, Factor analysis, reliability testing

This chapter presented the research design and methodology selected for the study. This chapter
provides the reasons behind the choice of the research design. The steps involved in designing
the questionnaire and validating it are discussed in detail. The chapter also includes discussions
and justification for the selection of samples, sample size, instrumentation, data collection, tools
and analysis methods for each phase of the study. The next chapter will discuss in detail the
analysis and the interpretation of the data to answer the research questions.

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