Business Research Methods

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Business research is defined as the systematic
and objective process of gathering,
recording, and analyzing data for aid in
making business decisions (Zikrmund).
Cooper and Schindler define business
research as a systematic enquiry that
provides information to guide managerial
decisions.
Decision making is always a crucial part of any
organizational functioning.
 In the field of business research, this valuable
information is obtained using the following
interrelated steps:
1. Problem or opportunity identification
2. Diagnosing the problem or opportunity
3. Executing business research to explore the
solutions
4. Implement presented solutions
5. Evaluate the effectiveness of decision making
◦ Evaluation Research
◦ Performance Monitoring Research
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Foundational—answers basic questions. What
business should we be in?
Testing—addresses things like new product
concepts or promotional ideas. How effective will
they be?
Issues—examines how specific issues impact the
firm. How does organizational structure impact
employee job satisfaction and turnover?
Performance—monitors specific metrics including
financial statistics like profitability and delivery
times. They are critical in real-time management
and in “what-if” types of analyses examining the
potential impact of a change in policy.
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Time Constraints
Availability of Data
Nature of the Decision
Benefits versus Costs
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Data—the raw facts—record measures
of certain phenomena which are
necessary to provide
Information—facts in a form suitable for
managers to base decisions on.
Business Intelligence—The subset of
data and information that actually has
some explanatory power enabling
effective managerial decisions to be
made.
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Relevance
Quality
Timeliness
Completeness
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Increased globalization
Growth of the Internet and other information
technologies
Knowledge Management
Decision Support System
Customer Relationship Management
Global Business Research
◦ General information about country - economic
conditions and political climate
◦ Cultural and consumer factors
◦ Market and competitive conditions - demand
estimation
Where Business
Collects
Research
Information
Source: Cooper &
Schindler
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Learning Objectives
◦ Classify business research
◦ List the major phases of the research process and
the steps within each
◦ Explain the difference between a research project
and a research program
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On the basis of specificity of its purpose
◦ Basic
◦ Applied
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On the basis of decision situation or purpose
◦ Exploratory
◦ Descriptive
◦ Causal
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Basic research is generally not related to a
specific problem and its findings cannot be
immediately applied.
"The secret of success is to know something
nobody else knows. "
Aristotle Onassis
Applied research directly addresses the
problem at hand.
Applied research is launched by the firm,
agency, or individual facing a specific
problem.
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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?
What are the characteristics of people who
likes to work in team?
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Should McDonalds add Italian pasta dinners
to its menu?
Should Procter & Gamble add a high-priced
home teeth bleaching kit to its product line?
Should one change the packaging of coke?
Should Suzuki introduce a luxury car?
DESCRIPTIVE
CAUSAL
COMPLETELY
CERTAIN
Exploratory Research
(Unaware of Problem)
“Our sales are declining and
we don’t know why.”
“Would people be interested
in our new product idea?”
ABSOLUTE
AMBIGUITY
Descriptive Research
(Aware of Problem)
EXPLORATORY
Causal Research
(Problem Clearly Defined)
“What kind of people are buying “Will buyers purchase more of
our product? Who buys our
our products in a new package?
competitor’s product?”
“Which of two advertising
“What features do buyers prefer campaigns is more effective?”
in our product?”
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Initial research conducted to clarify and
define the nature of a problem
Does not provide conclusive evidence
Subsequent research expected
Example: New Product Development
Can Use
◦ Open Ended Interviews
◦ Secondary Data
◦ Pilot Study
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Describes characteristics of a objects, people,
groups, organizations, or environments
Some understanding of the nature of the
problem
Discover answers to the questions who, what,
when, where, and, sometimes, how.
Example: Current Economic or Industry
Situation (IBEF), Describe Market Segments
Use Survey Methodology
Accuracy is important
Diagnostic Analysis
◦ ( Belief, features, feelings are important)
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Conducted to identify cause and effect
relationships
Before causal studies are undertaken,
researchers typically have a good
understanding of the phenomena being
studied.
Example: Smoking causes cancer
Process Improvement enhances
Operational Performance
Experiments, Test Markets
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Three critical evidences of causality:
Temporal Sequence
◦ The appropriate causal order of events
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Concomitant Variance
◦ two phenomena vary together
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Nonspurious Association
◦ An absence of alternative plausible explanations
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Goals to be achieved by conducting research.
Problem, opportunity, or monitor operations
Set out to “discover” this problem through a
series of interviews and through a document
called a research proposal.
The problem statement often is made only in
general terms; what is to be investigated is
not yet specifically identified.
Albert Einstein
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Defining the decision situation must precede
the research objectives.
◦ analysis of task involved,
◦ environmental context of the problem, and
◦ defining the problem.
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knowing what is to be accomplished
determines the research process.
Exploratory preliminary research activities
◦ previous research, pilot studies, focus group
interviews, and experience surveys.
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Management decision problems are usually
related with problem symptoms while the
business research problems are cause of those
symptoms.
The research objective should include its
scope, its limitations, and the precise meanings
of all words and terms significant to the
research.
Deliverables
Hypotheses should be logically derived from
and linked to our research objectives.
Decision Statements
Research Objectives
Research Hypotheses
Should we allocate
more resources
towards social
networking or TV
advertising ?
Identify attitude
change associated
with message
communicated with
both media
A target market
customer’s attitude
will become more
positive by positing on
FB than on TV.
How we can reduce
post purchase
complaints?
Identify factors
responsible for high
post purchase
complaints.
Customers are not
satisfied with Tech
Support .
Packaging is not up to
the mark.
Should we launch two
wheeler for Indian
Women?
Identify need for
independent 2 wheeler
for Indian women and
features wanted.
There exist
independent need for
2 wheeler for Indian
Women.
Indian women wants
more vibrant colours.
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Master plan
Framework for action
Specifies methods and procedures for
collecting and analyzing the needed
information
Decide about sources of information, the
design technique ,the sampling methodology,
and the schedule and cost of the research.
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Surveys
Experiments
Secondary data
Observation
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Who is to be sampled? (Target Population)
Example: to examine the attitudes of U.S.
automobile assemblers about quality improvement,
the population may be defined as the entire adult
population of auto assemblers employed by the
auto industry in the United States.
How large a sample?
How will sample units be selected?
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Data can be gathered by human observers or
interviewers, or they may be recorded by
machines as in the case of scanner data and
Web-based surveys.
Data gathering should be consistent
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Editing and Coding
◦ checking the data collection forms for omissions,
legibility, interview errors.
◦ meaningful categories and character symbols must be
established for groups of responses
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Data Analysis
◦ application of reasoning to understand the data that
have been gathered
◦ determining consistent patterns and summarizing the
relevant details revealed in the investigation.
◦ Appropriate techniques are determined MIS, the
characteristics of the research design, and the nature of
the data gathered.
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Effective communication of the research
findings using conference call, letter, written
report, oral presentation, or some
combination of any or all of these methods
Interpreting the research results, describing
the implications, and drawing the appropriate
conclusions for managerial decisions.
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At a minimum, a research report should contain
the following:
An executive summary consisting of a synopsis
of the problem, findings, and recommendations.
An overview of the research: the problem’s
background, literature summary, methods and
procedures, and conclusions.
A section on implementation strategies for the
recommendations.
A technical appendix with all the materials
necessary to replicate the project.
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When the researcher has only one or a small
number of research objectives that can be
addressed in a single study, that study is referred
to as a research project such as identifying
customer segments, selecting the most desirable
employee insurance plan, or determining an IPO
stock price.
When numerous related studies come together to
address issues about a single company, we refer
to this as a research program .
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If a new product is being developed, the
different types of research :
◦ include studies to identify the size and
characteristics of the market;
◦ product usage testing to record consumers’
reactions to prototype products;
◦ brand name and packaging research to determine
the product's symbolic connotations;
◦ and test-marketing the new product.
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