Business Research Methods William G. Zikmund

The Role of Business Research/ Introduction05.01.15N.P. SinghProfessorManagement Development InstituteMehrauli Road, Sukhrali - Gurgaon -122007-2

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It is the systematic and objective process of generating information for aiding business decisions.

Business Research

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Business Research- PointResearch information is neither intuitive nor haphazardly gathered. Business research must be objectiveDetached and impersonal rather than biasedIt facilitates the managerial decision process for all aspects of a business.

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Business ResearchInformationReducesUncertainty

I dont knowif we shouldoffer on-sitechild care?

Categories of Business ResearchClassification-IBasic Research Applied ResearchClassification-IIExploratory ResearchDescriptive Research Causal Research

Basic researchApplied researchBusiness Research Types

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Basic ResearchAttempts to expand the limits of knowledge.Not directly involved in the solution to a pragmatic problem.In Science The main motivation is to expand man's knowledge, not to create or invent something.There is no obvious commercial value to the discoveries that result from basic research.Examples:How did the universe begin?What are protons, neutrons, and electrons composed of?How do slime molds reproduce?What is the specific genetic code of the fruit fly?

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Basic Research ExampleIs 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 ResearchConducted when a decision must be made about a specific real-life problem.In ScienceThe goal of the applied scientist is to improve the human condition.Improve agricultural crop productionTreat or cure a specific diseaseImprove the energy efficiency of homes, offices, or modes of transportation

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Applied Research ExamplesShould McDonalds add Italian pasta dinners to its menu?Business research told McDonalds 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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More ExamplesA researcher investigates whether different in a mangers brain (e.g. right versus left hemisphere) are active during different kinds of managerial decision-making.

Basic research

More ExamplesA researcher investigates consumers attitudes toward a prototype of an innovative type of product, a home Cleaning kit for use on clothes that require dry cleaning

Applied research

More Examples-3A researcher investigates 5 personality traits to see if they can explain the purchasing behavior of automobile buyers.

Basic research

More Examples-4A new technology that nullifies the need to refrigerate fish has been invented. Heat processing and the use of flexible pouches for storage helps retain the freshness of fish and frozen food for three years. A researcher investigates how this new technology will impact the market for fish in India.

Applied research

More Examples-5A researcher working for a candy company has children evaluate concepts and prototypes for new candies. The researchers ask children to taste the products and rate them. Sometimes, the candy company develops unique items that taste good and researchers ask children to come up with a concept or a name the product.

Applied research

More Examples-6A researcher working investigates whether introducing a subbrand at new-car dealerships, identified by an AutoNation USA logo below the dealership name, is an effective basic strategy that can be applied to all its dealerships.

Applied research

Exploratory/ Descriptive/causal ResearchExploratory Research: Design in which the major emphasis is on gaining ideas and insights.Descriptive Research: Research design in which the major emphasis is on determining the frequency with which something occurs or the extent to which two variables covary.Causal Research: Research design in which the major emphasis is on determining cause-and-effect relationships.

Example: The popular crime investigation television shows (e.g., CSI: Crime Scene Investigation) provide a fairly good illustration of the three types of research design.These shows usually begin with a crime that must be investigated (an unplanned change has occurred in the marketplace). The first step is to search for clues that can help establish what has happened (exploratory research- Qualitative data based Research ). The clues uncovered in the exploratory phase of the investigation often point toward a particular hypothesis or explanation of the events that occurred, and investigators begin to focus their efforts in this direction, conducting interviews with witnesses and suspects (descriptive research).Finally, a trial is held to determine whether the evidence is sufficient to convict a suspect of the crime (causal research). (Quantitative data based research)

Relationships among Research Designs

Relationships between exploratory and descriptive researchFor example, if sales for a particular line of vehicles dropped during the latest quarter, as a researcher you might use exploratory research to provide insights about what caused the decrease in revenue.Suppose that you conducted interviews with potential car buyers and noticed that they seemed to be more excited about the new styles of other car brands than they were about the brand in question. This might lead to the hypothesis that style preferences had changed, resulting in lower sales. You cant really confirm or reject the hypothesis with exploratory research, though. For this purpose you need to conduct exploratory research.

Example of Exploratory Research Years ago, before the advent of CAT scanners and other noninvasive medical diagnostic procedures, doctors who were stumped about a patients symptoms might recommend exploratory surgery. With little to go on but vague descriptions of symptoms, physicians would open up a patient to look around and see what needed fixing.

Continued.In market research, exploratory research plays a similar role. Marketers have no machines to peer inside a decision problem, so they may use certain research techniques to open up the problem and look around. Researchers use these techniques, which they refer to collectively as exploratory research, with a single broad purpose: clarify the research questions that guide the entire research project.

Why one need Descriptive Research over conclusive research? Researchers want to know general information about human beings, such as what factors lead to excessive drinking among college students and what the results of this practice might be. An experimental research design would divide random college students in two groups, asking one group to drink a lot of alcohol and the other to abstain. This would be a completely unethical study because it would put the research subjects in danger. Instead of putting subjects in danger, researchers use various forms of descriptive research, which can include having the students fill out surveys, observing students' behavior in various settings and interviewing students. In this way, researchers can study students who self-select drinking behaviors.While descriptive research can yield rich descriptions of factors that may be associated with drinking behavior, it cannot determine causal factors between variables the way experimental research can

Scientific MethodBoth Methods (Exploratory & Descriptive) Employ Scientific Methods DefinitionThe analysis and interpretation of empirical evidence (facts from observation or experimentation) to confirm or disprove prior conceptions.It requiresSystematic Analysis & Logical Interpretation of empirical evidences

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MANAGERAIL VALUE OF BUSINESS RESEARCHIt reduces.???????The Decision-making Process Associated with the Development and Implementation of a StrategyIdentifying problems and opportunitiesDiagnosis and assessment of problem & opportunitiesSelecting and implementing a course of actionEvaluating the course of action

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Identifying problems and opportunities-1The description of the dividend history of stocks in an industry may point to an attractive investment opportunity.What could be the role of business research in this case?????????

ContinuedEmployees interviews undertaken to characterize the dimensions of an air line reservation clerks job reveal that reservation clerks emphasize competence in issuing the tickets over courtesy and friendliness in customer contact.

Diagnosis and assessment of problem & opportunities-2Provisioning of diagnostic information that clarifies the situationExamples: Underlying factors creating a problem.If there is a problem than need to specify what happened & whyIf multiple opportunities exist. Research may set priorities.The information collected may give you many solutions.

Selecting and implementing a course of action-3Factory is to be built in Delhi or HP.It is possible to answer this question after analyzing data of all dimension of the business Means by taking in to account all factors.

Evaluating the course of action-4Planned activities are properly executed or not?It is to be evaluated.

Evaluation ResearchEvaluation research is the formal, objective measurement and appraisal of the extent to which a given activity, project, or program has achieved its objectives.Conducted by Government Agencies for evaluating their existing programs for up liftment of the society.

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Performance-monitoring ResearchResearch that regularly provides feedback for evaluation and controlIndicates things are or are not going as plannedResearch may be required to explain why something went wrongThis is an example of evaluation research.

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Proprietary ResearchEmphasizes the companys gathering of new data. Not conducted regularly or continuously. Projects conducted to study specific company problems.

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More Term Business ResearchOneQualitative Data Based ResearchQuantitative Data Based ResearchTwoResearch based on Primary dataResearch based on Secondary data

Determining When to Conduct Business ResearchTime constraintsAvailability of dataNature of the decisionBenefits versus costs

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Is sufficient time available before a managerial decision must be made?Is the infor-mation already on handinadequate for makingthe decision?Is the decision of considerable strategicor tactical importance?Does the value of the research informationexceed the cost of conducting research?ConductingBusinessResearchDo Not Conduct Business ResearchTime ConstraintsAvailability of DataNature of the DecisionBenefits vs. Costs

YesYesYesYes

NoNoNoNoDetermining When to Conduct Business Research

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Value versus CostsPotential Value of a Business Research Effort Should Exceed Its Estimated Costs

ValueDecreased certaintyIncreased likelihood of a correct decisionImproved business performance and resulting higher profits

CostsResearch expendituresDelay of business decision and possible disclosure of information to rivalsPossible erroneous research results

Value Should Exceed Estimated Costs

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Major Topics for Research in Business-1General Business Conditions and Corporate ResearchShort term forecastingLong term forecastingTrend analysisGlobal environment analysisInflation & pricingPlant & warehouse locationAcquisions

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Major Topics for Research in Business-2Financial and Accounting ResearchInterest trendsStock, bond, commodity predictionCapital formation alternativesMerger & acquisitionsRisk return trade offImpact of taxesPortfolio analysisResearch on financial institutionExpected rate of returns

Major Topics for Research in Business-3Management and Organizational Behavior ResearchTQMMorale & Job SatisfactionLeadership styleEmployee ProductivitySales and Marketing ResearchMarket PotentialsMarket shareMarket segmentationSales analysisInformation Systems ResearchKnowledge & information need assessmentData MiningCorporate Responsibility ResearchEcological ImpactLogical constraintSocial values & ethics

Business Research in Todays ContextIncreased globalizationUnknown lands of unknown people.Growth of Information Technologies.Working Philosophy Why I collect if I can store it?Why I store it if I can not analyze it?Why I analyze it if it does not value for me?

Global ResearchBusiness Research is increasingly globalMarket knowledge is essentialA.C. Nielsen - more that 67% international business

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Global Business ResearchGeneral information about country Economic conditionsPolitical InstitutionsPolitical climateInfrastructureCultural and other factors which are responsible for success & failure of businessMarket and competitive conditions Market Size & Demand estimation etc.

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The Internet Is Transforming SocietyTime 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.

Internet ResearchSeeking facts and figures about an issue Surveys on Web sites

Types Of DatabasesBibliographic/textStatistical/geographicScannerFinancialImage and video

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