the role of business research
TRANSCRIPT
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Business
Research Methods
Hussain A. Al Awami, B.Sc. Pharm., M.Sc., MBA
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Chapter 1:
The Role of Business Research
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Learning Objectives• Understand the value of research as source of
information.
• Importance of business research as a management decision-making tool.
• Define business research.
• Difference between basic and applied research.
• Managerial value of business research
• Topics of business research.
• Business research and globalization.
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Sources of human knowledge
• Tradition
• Authority
• Trial & error
• Logical thought processes
• Scientific research
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Tradition
• Common foundation of accepted practice
• Used or normal practice
• Efficient (no need for effort)
• May never been evaluated for their validity
• By nature its interferes with the ability to
perceive alternatives
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Authority
• Expertise opinion
• Fast and easy
• Assumptions or knowledge are
unchallenged
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Experience and trials and error
• Functional source of knowledge
• Individual experience is restricted; difficult
to generalize
• Same experience might be perceived
differently by two individuals
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Trial and Error
• Alternatives are tried successively until we
find one that answers our question or solve
our problem
• Means of securing knowledge
• Inefficient
• Unsystematic
• unrecorded
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Logical thought processes
• Method of knowing combines experience,
intellectual faculties, and formal system of
thought.
• Inductive reasoning• From specific observations to generalizations
• Deductive reasoning• From general principle to specific prediction
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Scientific Approach
Systematic investigations
• Uses inductive and/or deductive with other
parameters
• Much better in quality
• Self evaluation capability
• Checks and balances
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Scope of business research
• Any research in business field!
• With broader definition: non-profit
organizations
• Non business organizations
• Business research help in decision making
• Could have a title of “marketing researcher”
or “organizational researcher” etc.
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Business research is defined as the
systematic and objective process of
generating information for aid in
making business decisions.
Business Research Defined
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Key words in the definition
• Literally, research (re-search) -“search
again”
• Systematic
• Objective
• Decision making
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Basic research
Applied research
Business Research Types
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Basic Research
• Attempts to expand the limits of knowledge.
• Not directly involved in the solution to a
pragmatic problem.
• To test theory or to discover more about a
concept.
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Basic Research Example
• Is executive success correlated with high
need for achievement?
• Are members of highly cohesive work
groups more satisfied than members of less
cohesive work groups?
• Do consumers experience cognitive
dissonance in low-involvement situations?
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Applied Research
• Conducted when a decision must be made
about a specific real-life problem
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Applied Research Examples
• Should McDonalds add Italian pasta dinners
to its menu?
– Business research told McDonald’s it should
not?
• Should Procter & Gamble add a high-priced
home teeth bleaching kit to its product line?
– Research showed Crest Whitestrips would sell
well at a retail price of $44
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Scientific Method
• The analysis and interpretation of empirical
evidence (facts from observation or
experimentation) to confirm or disprove
prior conceptions.
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Managerial value of business
research
• Identifying problems and opportunities
• Diagnosis and assessment
• Selecting and implementing a course of
action
• Evaluating the course of action
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Identifying problems or opportunities
• Identify nature of the problem
• Scan the market
• Examples:
– Dividend of the stock
– Airline reservation clerk
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Diagnosing and assessing problems
or opportunities• Gain more insight
• Set priorities
• Quantitative and/or qualitative
investigations
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Selecting and implementing a course
of action• Evaluating alternatives
– Fax machine manufacture
• Proper forecast
• Effective implementation
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Evaluating the course of action
• Provide tool to:
– Planned activities properly executed
– Accomplished what expected
• Feedback for evaluation and control
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Evaluation Research
• Evaluation research is the formal, objective
measurement and appraisal of the extent to
which a given activity, project, or program
has achieved its objectives.
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Performance-monitoring
Research• Research that regularly provides feedback
for evaluation and control
• Indicates things are or are not going as planned
• Research may be required to explain why something “went wrong”
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Total Quality Management (TQM)• A business philosophy that embodies the
belief that the management process must
focus on integrating customer-driven
quality throughout the organization.
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TQM, continue• Continuous improvement.
• Improve durability and enhance features.
• Managers strive to improve competitiveness.
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Determining When to Conduct
Business Research• Not feasible for all decisions
• Factors:
– Time constraints
– Availability of data
– Nature of the decision
– Benefits versus costs
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Is sufficient time
available before
a managerial
decision
must be made?
Is the infor-
mation already
on hand
inadequate
for making
the decision?
Is the decision
of considerable
strategic
or tactical
importance?
Does the value
of the research
information
exceed the cost
of conducting
research?
Conducting
Business
Research
Do Not Conduct Business Research
Time ConstraintsAvailability
of DataNature of the
Decision
Benefits
vs. Costs
Yes
No No
Determining When to Conduct
Business Research
No No
Yes Yes Yes
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Value
•Increased certainty
•Increased likelihood of a correct decision
•Improved business
performance and resulting higher
profits
Costs
•Research
expenditures
•Delay of business
decision and possible disclosure
of information to
rivals•Possible erroneous
research results
Value Should Exceed
Estimated Costs
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Major Topics for Research in
Business• General Business Conditions and Corporate
Research
• Financial and Accounting Research
• Management and Organizational Behavior
Research
• Sales and Marketing Research
• Information Systems Research
• Corporate Responsibility Research
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Cross-functional Teams• Cross-functional teams are composed of
individuals from various organizational
departments such as engineering,
production, finance, and marketing who
share a common purpose.
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Business Research in the 21st
Century
• Increased globalization
• Growth of the Internet and other
information technologies
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Global Research
• Business Research is increasingly global
• Market knowledge is essential
• A.C. Nielsen - more that 67% international
business
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Global Business Research, continue
• General information about country -
economic conditions and political climate
• Cultural and consumer factors
• Market and competitive conditions -
demand estimation
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The Internet
Is Transforming Society• Time is collapsing.
• Distance is no longer an obstacle.
• Crossing oceans is only a mouse click
away.
• People are connected 24 hours a day, seven
days a week.
• "Instantaneous" has a new meaning.
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End of chapter 1