PRINCIPLES OF BUSINESS RESEARCH

Business Research Defined

Business research is defined as the systematic and objective process of generating information for aid in making business decisions.

Business Research

Research information is neither intuitive nor haphazardly gathered. Literally, research (re-search) -search again Business research must be objective Detached and impersonal rather than biased It facilitates the managerial decision process for all aspects of a business.

Information
Reduces Uncertainty

I dont know if we should Implement new performance appraisal system

Business Research Types

Basic research
Applied research

Basic Research

Attempts to expand the limits of knowledge. Not directly involved in the solution to a pragmatic problem.

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?

Applied Research

Conducted when a decision must be made about a specific real-life problem

Applied Research Examples

Should McDonalds add Italian pasta dinners to its menu? Business research told McDonalds it should not? Should Procter & Gamble add a highpriced home teeth bleaching kit to its product line? Research showed Crest Whitestrips would sell well at a retail price of $44

Introduction to business research

Scope of business research
- for-profit, non-profit business - business functions (production, finance, management, marketing)

A definition of business research:

gathering and analyzing data in a systematic manner to aid business decisions

objectivity and business research

Introduction to business research

Basic research
aims at expanding the boundaries of our knowledge or verifying the acceptability of a given theory.

Applied research

is related to a specific problem to be solved.

Scientific method

- set of techniques and procedures - systematic analysis and logical interpretation of evidence

The scientific method is the essence of research.

An overview of the research process

Stages in the research process

An overview of the research process

Business research:

- reduces uncertainty by providing information on a given subject

A classification of business research on the basis of its function (purpose)

1. Exploratory research - initial research conducted to clarify and define the nature of a problem - sometimes the general problem is realized but a better understanding is needed before a detailed research Examples: Absenteeism is increasing and we dont know why would people be interested in our new product idea? - methods: interviews, basic statistical calculations

2. Descriptive research - research designed to describe the characteristics of a phenomenon - who? what? when? where? how? Examples: What kind of people prefer Big Mac hamburgers? What are the characteristics of students in this class? - methods: surveys, analysis of already existing data 3. Causal research - research conducted to identify cause-and-effect relationships among variables Examples: the influence of price and advertising on sales Which of two training programs is more effective? - methods: experiments, econometric analyses

For each situation below, decide whether the research should be exploratory, descriptive, or causal:
- establishing the functional relationship between advertising and sales - investigating reactions to the idea of a new method of defense budgeting - identifying target-market demographics for a shopping center - estimating stock prices for IBM two years in the future - learning how many organizations are actively involved in just-in-time production - learning the extent of job satisfaction in a company

What research design seems appropriate for each of the following studies?
the manufacturer and marketer of flight simulators and other pilot-training equipment wish to forecast sales volume for the next five years a corporation wishes to evaluate the quality of its college-recruiting program - an academic researcher wishes to investigate if the United States is losing its competitive edge in world trade - a food company researcher is interested in knowing what types of food are carried in brown-bag lunches to learn if the company can capitalize on this phenomenon

Determining When to Conduct Business Research

Availability of Data Benefits Time Constraints Nature of the Decision vs. Costs
Is sufficient time available before a managerial decision must be made?
Yes

Is the information already on hand inadequate for making the decision?

Yes

Is the decision Yes of considerable strategic or tactical importance?

Does the value of the research Yes information exceed the cost of conducting research?

Conducting Business Research

No

No

No

No

Do Not Conduct Business Research

Value versus Costs

Potential Value of a Business Research Effort Should Exceed Its Estimated Costs

Value Should Exceed Estimated Costs

Costs Value
Decreased uncertainty Increased likelihood of a correct decision Improved business performance and resulting higher profits Research expenditures Delay of business decision and possible disclosure of information to rivals Possible erroneous research results

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

Business Research in the 21st Century

Increased globalization Growth of the Internet and other information technologies