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ROLE OF BUSINESS RESEARCH

Business research functions as a conduit to new ideas and concepts. Learning through
research is not limited to a particular department or project or a particular point in the year. It
can be conducted by reading, viewing and listening on a daily basis. Every employee has the
potential to be involved in some level of business research, and gathering research should not
happen in a vacuum but should be part of the process of managing a business.
Management Tool
Business research ultimately functions as a management tool that can be used for creating
business strategies, managing production and managing growth. As a management tool, it
provides a descriptive function (collecting data), a diagnostic function (assessing, evaluating
and explaining) and a predictive function (forecasting and choosing a course of action).
Managers of all levels use research to shape and direct their employees and their strategies.
Source of Information
Data collection can occur through internal reporting and financial statements, a proprietary
research study or by simply gathering or purchasing statistics and data from reliable sources.
For example, business research by The Freedonia Group identifies laminate markets and
products, outlines comparative market data for the years 1998, 2003 and 2008 and makes
projections for 2013 and 2018. With this information, a laminate manufacturer, home builder
or product sales representative can compare business goals and realities against viable market
data and put future business strategies in perspective.
Redefining Perceptions
Business research provides an opportunity for assessment. The laminate manufacturer has the
opportunity to take the information provided and assess how and where its business fits in the
decorative laminates industry. What the manufacturer may have assumed about the industry
and the perceptions it holds about its role within it may change through this business research
assessment. The tools for diagnosing the cause of dropping sales figures or a faulty
production process grow broader when business research is included.

Risk Management
Knowing present conditions can lower risk. Business research can provide parameters in
which a business can flourish and manage risk. Researching trends and market conditions can
identify the need for increased insurance, alternative shipping and transportation needs or the
need to assess and sell assets.
Shape Strategies
Business research can inform and shape business strategies. Researching trends or tracking
industry data can provide or stimulate strategic planning. Knowing what competitors are
doing and the direction they are headed can inform present business strategies. Conducting
business research in the area of consumer preferences reveals what products need further
development and what features may be beneficial to add.
I. THE SCOPE OF BUSINESS RESEARCH
Business research fulfills the managers need for knowledge of the organization, the market,
the economy, or other area of uncertainty. It helps the manager predict how individuals,
markets, organizational units, or other entities will respond to his business decisions.
The emphasis of business research is to shift decision-makers from risky intuitive decisions
to decisions based on systematic and objective investigations.
A business researcher conducting research may be referred to as a marketing researcher, an
organizational researcher, a director of financial research, or one of many other titles.
II. BUSINESS RESEARCH DEFINED
Business research is defined as the systematic and objective process of generating
information for aid in business decisions. This research information should be (1) scientific;
not intuitive or haphazardly gathered (2) objective (3) impersonal.
Business research can be used for any aspect of the enterprise. By providing appropriate
information, research should be an aid to managerial judgment although it should not be a
substitute for it. Applying the research is a managerial art in itself. All types of organizations
that engage in some kind of business activity can use business research.

III. BASIC RESEARCH AND APPLIED RESEARCH


There are two types of business research:
A. Basic or pure research attempts to expand the limits of knowledge.
B. Applied research is conducted when a decision must be made about a specific reallife problem.
Both types of research employ the scientific method, the analysis and interpretation of
empirical evidence (facts from observation or experimentation), to confirm or disprove prior
conceptions.
IV.MANAGERIAL VALUE OF BUSINESS RESEARCH
The prime managerial value of business research is that it reduces uncertainty by providing
information that facilitates decision making about strategies and the tactics used to achieve an
organizations strategic goals.

The decision-making process involves three interrelated

stages.
A.

Identifying the existence of problems and opportunities. Before any


strategy can be developed, an organization must determine where it
wants to go and how it will get there. Business research can help
managers plan strategies by determining the nature of situations by
identifying the existence of problems or opportunities present in the
organization.

B.

Diagnosis and Assessment . After an organization recognizes a


problem or identifies a potential opportunity, an important aspect of
business research is often the provision of diagnostic information that
clarifies the situation. Managers need to gains insight about the
underlying factors causing the situation. If there is a problem they
need to specify what happened and why. If an opportunity exists they
may need to explore, clarify, and refine the nature of the opportunity.

C.

Selecting and implementing a course of action. Business research is often conducted to


obtain specific information to help evaluate the various alternatives, and to select the
best course of action based on certain performance criteria.

D.

Evaluation of the course of action. Evaluation research is conducted to inform


managers whether planned activities were properly executed and whether they
accomplished what they were expected to do. It serves an evaluation and
control function.

Evaluation research is a formal, objective appraisal that

provides information about objectives and whether the planned activities


accomplished what they were expected to accomplish.

This can be done

through performance-monitoring research, which is a form of research that


regularly provides feedback for evaluation and control of business activity. If
this research indicates things are not going as planned, further research may be
required to explain why something went wrong.
V. WHEN IS BUSINESS RESEARCH NEEDED?
A manager considering whether or not to conduct research must consider four things:
A. Time constraints: Is there sufficient time available before a managerial decision
must be made?
B. Availability of data: Is the information already on hand adequate for making the
decision? If not, can appropriate information be made available?
C. Nature of the decision:

Is the decision of considerable strategic or tactical

importance?
D. Benefits vs. costs: Does the value of the research information exceed the cost of
conducting the research?
If the answer to any of these questions is no, then business research should not be
conducted.
VI. MAJOR TOPICS IN BUSINESS RESEARCH
There are many topics that benefit from business research. Some major topics are: general
business, economic, and corporate research; financial and accounting research; management
and organizational research; sales and marketing research; information systems research; and
corporate responsibility research.

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