MBB3724
Business Research Methods
Introduction to Business Research
Course syllabus
Research process
© 2012 John Wiley & Sons Ltd.
www.wiley.com/college/sekaran
Definition of Business Research
• Business research: an organized and systematic
inquiry or investigation into a specific problem,
undertaken with the purpose of finding answers
or solutions to it.
© 2012 John Wiley & Sons Ltd.
www.wiley.com/college/sekaran
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.
"The secret of success is to know something
nobody else knows. "
Aristotle Onassis
Information
Reduces
Uncertainty
I don’t know
if we
should
offer on-site
child care?
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 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
Applied versus Basic Research
• Basic research: generates a body of knowledge
by trying to comprehend how certain problems
that occur in organizations can be solved.
• Applied research: solves a current problem
faced by the manager in the work setting,
demanding a timely solution.
© 2012 John Wiley & Sons Ltd.
www.wiley.com/college/sekaran
Examples Applied Research
•
Apple’s iPod fueled the company’s success in recent years,
helping to increase sales from $5 billion in 2001 to $32 billion
in the fiscal year 2008. Growth for the music player averaged
more than 200% in 2006 and 2007, before falling to 6% in 2008.
Some analysts believe that the number of iPods sold will drop
12% in 2009. “The reality is there’s a limited group of people
who want an iPod or any other portable media player,” one
analyst says. “So the question becomes, what will Apple do
about it?”
•
The existing machinery in the production department has had
so many breakdowns that production has suffered. Machinery
has to be replaced. Because of heavy investment costs, a
careful recommendation as to whether it is more beneficial to
buy the equipment or to lease it is needed.
© 2012 John Wiley & Sons Ltd.
www.wiley.com/college/sekaran
More Examples of Research Areas
in Business
• Absenteeism
• Communication
• Motivation
• Consumer decision making
• Customer satisfaction
• Budget allocations
• Accounting procedures
© 2012 John Wiley & Sons Ltd.
www.wiley.com/college/sekaran
Why managers should know about
research
• Being knowledgeable about research and research
methods helps professional managers to:
• Identify and effectively solve minor problems in the work
setting.
• Know how to discriminate good from bad research.
• Appreciate the multiple influences and effects of factors
impinging on a situation.
• Take calculated risks in decision making.
• Prevent possible vested interests from exercising their
influence in a situation.
• Relate to hired researchers and consultants more effectively.
• Combine experience with scientific knowledge while making
decisions.
© 2012 John Wiley & Sons Ltd.
www.wiley.com/college/sekaran
The Manager–Researcher
Relationship
• Each should know his/her role
• Trust levels
• Value system
• Acceptance of findings and implementation
• Issues of inside versus outside researchers/consultants
© 2012 John Wiley & Sons Ltd.
www.wiley.com/college/sekaran
Internal Researchers
• Advantages:
• Better acceptance from staff
• Knowledge about organization
• Would be an integral part of implementation and
evaluation of the research recommendations.
• Disadvantages
• Less fresh ideas
• Power politics could prevail
• Possibly not valued as “expert” by staff
© 2012 John Wiley & Sons Ltd.
www.wiley.com/college/sekaran
External Researchers
• Advantages
• Divergent and convergent thinking
• Experience from several situations in different
organizations
• Better technical training, usually
• Disadvantages
• Takes time to know and understand the
organization
• Rapport and cooperation from staff not easy
• Not available for evaluation and implementation
• Costs
© 2012 John Wiley & Sons Ltd.
www.wiley.com/college/sekaran
Hallmarks of scientific research:
• Hallmarks or main distinguishing
characteristics of scientific research:
• Purposiveness
• Rigor
• Testability
• Replicability
• Precision and Confidence
• Objectivity
• Generalizability
• Parsimony
© 2012 John Wiley & Sons Ltd.
www.wiley.com/college/sekaran
Hypothetico-Deductive Research
• The Seven-Step Process in the HypotheticoDeductive Method
• Identify a broad problem area
• Define the problem statement
• Develop hypotheses
• Determine measures
• Data collection
• Data analysis
• Interpretation of data
© 2012 John Wiley & Sons Ltd.
www.wiley.com/college/sekaran
Deduction and Induction
• Deductive reasoning: application of a general theory to
a specific case.
• Hypothesis testing
• Inductive reasoning: a process where we observe
specific phenomena and on this basis arrive at general
conclusions.
• Counting white swans
• Both inductive and deductive processes are often used
in research.
© 2012 John Wiley & Sons Ltd.
www.wiley.com/college/sekaran
Scientific Method
• The analysis and interpretation of empirical evidence (facts from
observation or experimentation) to confirm or disprove prior
conceptions.
The Decision-making Process Associated
with the Development and
Implementation of a Strategy
• Identifying problems and opportunities
• Diagnosis and assessment
• Selecting and implementing a course of action
• Evaluating the course of action
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.
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”
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.
TQM
• Stresses continuous improvement of product quality and service.
• Managers improve durability and enhance features as the product
ages.
• Managers strive to improve delivery and other services to keep their
companies competitive
Determining When to Conduct Business
Research
• Time constraints
• Availability of data
• Nature of the decision
• Benefits versus costs
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?
No
Yes
Is the information already
on hand
inadequate
for making
the decision?
No
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?
No
Do Not Conduct Business Research
No
Conducting
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 certainty
•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
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.
Business Research in the 21st Century
• Increased globalization
• Growth of the Internet and other information technologies
Global Research
• Business Research is increasingly global
• Market knowledge is essential
• A.C. Nielsen - more that 67% international business
Global Business Research
• General information about country - economic conditions and
political climate
• Cultural and consumer factors
• Market and competitive conditions - demand estimation
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.
Internet Research
• Seeking facts and figures about an issue
• Surveys on Web sites