PRINCIPLES OF BUSINESS PRINCIPLES OF BUSINESS RESEARCHRESEARCH

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

Business Research Business Research DefinedDefined

Business ResearchBusiness Research

Research information is neither intuitive Research information is neither intuitive nor haphazardly gathered. nor haphazardly gathered.

Literally, research (re-search) -“search Literally, research (re-search) -“search again” again”

Business research must be objectiveBusiness research must be objective Detached and impersonal rather than Detached and impersonal rather than

biasedbiased It facilitates the managerial decision It facilitates the managerial decision

process for all aspects of a business.process for all aspects of a business.

InformationInformation

ReducesReduces

UncertaintyUncertainty

I don’t knowif we

shouldImplement

new performance

appraisal system

Basic research

Applied research

Business Research Business Research TypesTypes

Basic ResearchBasic Research

Attempts to expand the limits of Attempts to expand the limits of knowledge.knowledge.

Not directly involved in the Not directly involved in the solution to a pragmatic problem.solution to a pragmatic problem.

Basic Research Basic Research ExampleExample Is executive success correlated with Is executive success correlated with

high need for achievement?high need for achievement? Are members of highly cohesive work Are members of highly cohesive work

groups more satisfied than members groups more satisfied than members of less cohesive work groups?of less cohesive work groups?

Do consumers experience cognitive Do consumers experience cognitive dissonance in low-involvement dissonance in low-involvement situations?situations?

Applied ResearchApplied Research

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

Applied Research Applied Research ExamplesExamples Should McDonalds add Italian pasta Should McDonalds add Italian pasta

dinners to its menu?dinners to its menu? Business research told McDonald’s it Business research told McDonald’s it

should not?should not? Should Procter & Gamble add a high-Should Procter & Gamble add a high-

priced home teeth bleaching kit to its priced home teeth bleaching kit to its product line?product line?

Research showed Crest Whitestrips Research showed Crest Whitestrips would sell well at a retail price of $44would sell well at a retail price of $44

Introduction to business Introduction to business researchresearch

ScopeScope of business research of business research

- for-profit, non-profit business- for-profit, non-profit business- business functions (production,- business functions (production,

finance, management, marketing)finance, management, marketing)

AA definition of definition of business researchbusiness research::

gathering and analyzing data in a gathering and analyzing data in a systematicsystematic manner to aid manner to aid business decisionsbusiness decisions

objectivityobjectivity and business research and business research

Introduction to business Introduction to business researchresearch

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

Applied researchApplied researchis is related to a specific problem to be solvedrelated to a specific problem to be solved..

Scientific methodScientific method- set of techniques and procedures- set of techniques and procedures- systematic analysis and logical- systematic analysis and logical

interpretation of evidenceinterpretation of evidence The scientific method is the essence of researchThe scientific method is the essence of research..

An overview of the research An overview of the research processprocess

Stages in the research processStages in the research process

An overview of the research An overview of the research processprocess

Business research: Business research: - reduces uncertainty by providing- reduces uncertainty by providing informationinformation

on a given subjecton a given subject

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

1. 1. Exploratory researchExploratory research- initial research conducted to clarify and define the - initial research conducted to clarify and define the nature of a problemnature of a problem

-- sometimes the general problem is realized but a better sometimes the general problem is realized but a better understanding is needed before a detailed researchunderstanding is needed before a detailed research

Examples: Examples: ““Absenteeism is increasing and we don’t know why”Absenteeism is increasing and we don’t know why”““would people be interested in our new product idea?”would people be interested in our new product idea?”

- methods: interviews, basic statistical calculations- methods: interviews, basic statistical calculations

2. 2. Descriptive researchDescriptive research - research designed to describe the characteristics- research designed to describe the characteristics

of a phenomenonof a phenomenon- - who? what? when? where? how?who? what? when? where? how?

Examples:Examples:““What kind of people prefer Big Mac hamburgers?”What kind of people prefer Big Mac hamburgers?”““What are the characteristics of students in this class?”What are the characteristics of students in this class?”

- methods: surveys, analysis of already existing- methods: surveys, analysis of already existing datadata3. 3. Causal researchCausal research

- research conducted to identify - research conducted to identify cause-and-effectcause-and-effect relationships among variables relationships among variables Examples:Examples:““the influence of price and advertising on sales”the influence of price and advertising on sales”““Which of two training programs is more effective?”Which of two training programs is more effective?”

- methods: experiments, econometric analyses- methods: experiments, econometric analyses

For each situation below, decide whether the research For each situation below, decide whether the research should be exploratory, descriptive, or causal: should be exploratory, descriptive, or causal:

- establishing the functional relationship between- establishing the functional relationship between advertising and salesadvertising and sales

- investigating reactions to the idea of a new method of- investigating reactions to the idea of a new method of defense budgetingdefense budgeting

- identifying target-market demographics for a shopping- identifying target-market demographics for a shopping centercenter

- estimating stock prices for IBM two years in the future- estimating stock prices for IBM two years in the future- learning how many organizations are actively involved- learning how many organizations are actively involved

in just-in-time productionin just-in-time production- learning the extent of job satisfaction in a company- learning the extent of job satisfaction in a company

What research design seems appropriate for each of What research design seems appropriate for each of the following studies?the following studies?

the manufacturer and marketer of flight simulators andthe manufacturer and marketer of flight simulators and other pilot-training equipment wish to forecast salesother pilot-training equipment wish to forecast sales volume for the next five yearsvolume for the next five years

a corporation wishes to evaluate the quality of itsa corporation wishes to evaluate the quality of its

college-recruiting programcollege-recruiting program

- - an academic researcher wishes to investigate if thean academic researcher wishes to investigate if the

United States is losing its competitive edge in worldUnited States is losing its competitive edge in world

tradetrade

- a food company researcher is interested in knowing- a food company researcher is interested in knowing

what types of food are carried in brown-bag luncheswhat types of food are carried in brown-bag lunches

to learn if the company can capitalize on thisto learn if the company can capitalize on this

phenomenonphenomenon

Is sufficient time available before

a managerial decision

must be made?

Is the infor-mation already

on handinadequate for making

the decision?

Is the decision of considerable

strategicor tactical

importance?

Does the value of the research

informationexceed the cost of conducting

research?

ConductingBusinessResearch

Do Not Conduct Business Research

Time ConstraintsAvailability of

Data Nature of the DecisionBenefits vs. Costs

Yes YesYesYes

No No No No

Determining When to Conduct Determining When to Conduct Business ResearchBusiness Research

Value versus CostsValue versus Costs

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

Value

•Decreased uncertainty•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 Value Should Exceed Estimated CostsEstimated Costs

Major Topics for Major Topics for Research in BusinessResearch in Business General Business Conditions and General Business Conditions and

Corporate ResearchCorporate Research Financial and Accounting ResearchFinancial and Accounting Research Management and Organizational Management and Organizational

Behavior ResearchBehavior Research Sales and Marketing ResearchSales and Marketing Research Information Systems ResearchInformation Systems Research Corporate Responsibility ResearchCorporate Responsibility Research

Business Research in Business Research in the 21st Centurythe 21st Century Increased globalizationIncreased globalization Growth of the Internet and other Growth of the Internet and other

information technologiesinformation technologies