Applied Research in Business Management: Who Benefits from It and How Should It Be
Conducted?
Author(s): Oskar Grün
Source: Management International Review , 3rd Quarter, 1987, Vol. 27, No. 3 (3rd
Quarter, 1987), pp. 4-12
Published by: Springer
Stable URL: https://www.jstor.org/stable/40227844
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ARTICLES
O.Griin*
Applied Research in Business Management who Benefits From it and How Should it be
Conducted?
The study of business management is considered to be an applied science by the prevailing opinion of its representatives. Its empirical approach has been reinforced even
further during its behavioral period of development. It is indicative that, in its most recent methodological controversy, discussions did not focus on the science's objective,
but on how to approach the objective.1
The Alleged Gap in the Application of the Results of Management Research
Again and again there have been complaints that management science is allegedly too
far removed from practical business. Such complaints, in an undifferentiated form, are
not confined to our discipline (many disciplines are suspected of an ivory tower exis-
tence), and are furthermore not always convincing. Any gap between management
practice and management theory may be due to the inadequate development of theory
just as it may be attributable to the inadequate adoption by management practice of
correct findings of the management science.2 More serious are reproaches that there is
a lack of theoretically based decision-making aids for the solution of pressing topical
issues (e.g., flexible working hours systems, shorter working hours systems, starting up
new enterprises, technology management) and that theoretical statements become
unusable for practical application by inordinately restricting their conditions for application. The scientists are also accused of a lack of courage in simplifying or presenting
incomplete solutions, so that practitioners are compelled to engage in 'Do-it-yourself
theorizing. In addition, there are - mostly reproachful - references to models such as
'the' American universities3 or 'the' engineers who, in founders' centers, are exploring
new ways of cooperating with business practice and, in doing so, occasionally intrude
into the traditional domain of the management science. Finally, internationally operat-
ing consulting firms are credited with doing a much better job than academic researchers in translating basic findings into practicable instructions for action
(sometimes using show effects).
* Dr. Oskar Griin, Dipl.-Kfm. (M.B.A.), Professor and Head of Department of Business Organization and Materials Management, University of Economics and Business Administration, Vienna,
Austria. Manuscript received March 1987.
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Before discussing the demands of practical business on applied research in management, a precise definition of the characteristics and the usefulness of applied research at
universities will be attempted.
Characteristics and Utility of Applied Management Research
It is interesting to find that the characteristics of applied research and its delimitation
against basic research on the one hand and against consulting on the other hand have
not been discussed in detail in the management science.4 In contrast with this, in the
field of medicine there have been lively discussions on clinical research.5 In our opinion, there are four aspects which are characteristic of applied management research
and its delimitation against basic research and consulting: 1) novelty, 2) grounding in
basic research, 3) immediate relevance to practical business, and 4) implementation by
cooperation with practical business.
Applied research, like any other research, requires the characteristic of novelty. This
novelty may, in particular, concern
- the procedure (e.g. the control of staff behavior by means of the accounting system
which, by tradition, has had above all the function of evidence vis-a-vis outsiders),
- the object of application (opening up new areas for the application of known procedures, such as the utilization of accounting in hospitals; this is the equivalent of a
new application in engineering),
- the situation (e.g. the utilization of accounting as a management tool in a crisis),
- the expectation (e.g. a process for reducing inventory levels by means of the 'just-intime' process),
- the method (e.g. the widely used method of case studies in applied research offers a
considerable heuristic potential).
It is questionable whether the required characteristic of novelty is met by the repeated
application of a certain knowledge. There are obviously two very different motives for
repeated applications:
- In the case of predominantly profit-oriented motives (as with consulting) the situations sought out for application are preferably those where the danger of falsification is slim (avoidance of falsifiers).
- In the case of predominantly scientific (knowledge-oriented) motives, it is the degree
of reliability of findings which is to be enhanced thus reinforcing the theory. For this
purpose also conditions of application, where there is a risk of findings being falsified, and new problems are deliberately chosen.
Applied research, as a rule, is grounded in basic research.6 Neglecting basic research
may jeopardize applied research in its very existence, as has been shown by the, some-
times threatening, uncoupling of clinical research from basic research in medicine.
Conversely, applied research may provide a stimulus to search for new approaches or
to redefine a problem.7 Frequently, the practical importance of basic research is not
recognized until required in applied research work. This leads to a noticeable acceleration in the utilization of basic research for practical application. Contact between basic research and applied research thus benefits both parties and should, therefore, be
promoted by both.
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By immediate relevance to practical business we mean the intention to solve a (present
or future) problem of considerable practical importance and thus to exercise a determining influence on practical operations. This intention implies a conflict of goals
between theoretical research and business practice. Practical business is, as a rule, interested in solutions to specific problems or, a priori, in specified results, whereas theoretical research is interested in general findings (i.e. applicable to a large number of
problem classes) and is, in principle, free of value judgements. Scholarly interest also
requires the results of applied research to be documented and published, while this is
of secondary importance, or may even be undesirable, in practical business.
Cooperation with practical business is necessary to permanently ensure the relevance of
research to practice. The forms and degrees of intensity of such cooperation are mani-
fold. There is a loose cooperation when practical business solely grants access to the
empirical area (stating the concrete problem and the person affected, as well as granting permission to collect data). This passive attitude may be compared with providing
the medical cases in clinical research.
The intensive type of cooperation requires the active involvement of the practitioner
and the provision of considerable resources (participation in the research team,
exchange of know-how or of persons, pre-selection of data with a view to their rel-
evance to the problem, willingness to apply the results of such research). Commissioned research is to be recommended to both parties only if the research objective
can be precisely defined and the risk of failure is small.
Additional features, such as the initiative coming from practical business, the project-
like implementation and financial sponsorship by business firms (especially the remuneration) are, therefore, omitted in the following considerations.
At this point we can draw a first conclusion and give a preliminary answer to the question as to who benefits from applied management research conducted at universities:
- Practical business benefits from the diverse and up-to-date knowledge of university
research facilities; it can take its problems directly to the scientists and it can participate in the testing of the results of research as to their applicability in practice. In so far
as management practice lags behind management theory, cooperation in the field of
applied research can narrow this gap (improvement of the practical level) and management theory can provide prophylactic assistance.
- Applied research benefits basic research since it finalizes things and acts as a stimulus.
Finalization means the utilization of the investments in basic research; stimulation
comes from the formulation of new problems and the correction of the results of basic
research.
- Applied research offers an incentive to universities to assert themselves in competition
with non-university research and to display their superiority. In this way, research at
universities continues to appeal to the elite and prevents the drain of research funds
away from the universities.
- Applied research is also a continuous challenge to the management science to justify
people's faith in its proficiency. If there is a suspicion that the competence for applied
research does not lie with the management science but with some other academic disciplines, a reallocation of funds might take place. Inextricably linked with this is the image of the science of management in its rivalry with other disciplines.
The management science has, in the past; furnished convincing evidence of its proficiency in applied research. Its achievements in the field of accounting (book-keeping,
financial statements, cost accounting, capital investment analysis) are known even to
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the uninitiated to management theory. More recent research projects also give rise to
optimism: e.g. decision-making theory which endeavors successfully to develop further
its results from basic research, for practical application, in the form of 'decision engineering'. We may, therefore, look forward with confidence to further remarkable
achievements in applied research (e.g. in the field of software, including artificial in-
telligence), especially since there is a large body of basic research in management
which has not yet been 'finalized'.
Demands of Practical Business on Applied Research in Management
Let us now return to the starting point of our deliberations, i.e. the complaint about the
applicability gap in management research. We investigated this issue by way of hearings with practitioners on the occasion of a research seminar, and found a conspicuous
agreement of the interviewees in all essential points. Their demands can be summarized in the following catalog:
The Demand for Pre-Qualification
This demand is based on criticism that researchers in management operate in fields for
which they have no specific pre-qualification, e.g. a relevant involvement in basic research. Cultivating or tolerating the image of the 'know-it-all' is met with skepticism
and rejection by practical management. Such behavior is not only detrimental to the
individual researcher but may be used as an excuse for a general reproach against all
academic researchers.8
The Demand for Relevance to Problem-Solving
This demand concerns the subject matter of research in management. Practical business wants research that anticipates future developments and problems and thus has a
stock of solutions ready at the time the problem becomes relevant. In actual fact - so
the critics - researchers in management rarely figure as 'anticipatory thinkers'; in many
cases they are not even 'retrospective thinkers', in that they do not - or only after a considerable delay - tackle problems which have become burning issues, e.g., the problems
of flexible automation or of environmental protection.
The Demand for Reliability
This demand covers both the results of research and the research procedure. The results
should not only meet the particular standard of research (which is mainly a question of
the pre-qualification), but should also meet the (possibly contractually stipulated) re-
search target. Concerning the research procedure, it is, above all, the reliable compliance with deadlines that has proved a weak point. Unlike professional consultants,
research facilities at universities frequently do not have the capacities which are re-
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quired for cooperation with practical business. This gives rise to an important obstacle
to cooperation, especially when the projects are under time pressure.
The Demand for Accessibility
For a practitioner looking for advice it is often difficult to find in the management science the partner who is the competent expert for his problem. The designations of the
professorships, the departments and institutes (some of which had to be changed under
new university laws) sometimes spell out little about their main focuses of research.
Complete and up-to-date catalogs or adequately briefed information offices are mostly
lacking, i.e. there are no signboards to the places of research in management.
The Demand for Intelligibility
This demand refers especially to the ability of presenting the results of research in a
manner which is intelligible to practical business. Negative examples are a technical
jargon which impedes communication, the selection of the 'wrong' vehicles of publication, and the belief that it is the duty of practical business to look out for information
about research findings. A comparison with the U.S.A. proves the justification of this
demand. In our country, there are still too many researchers who consider the use of a
stilted jargon full of foreign words to be the hallmark of a 'good' theory.
Possibilities of Meeting the Demands
The hearings with practitioners did not stop at criticizing the present state of affairs but
also produced a number of proposals for increasing the efficiency of applied research in
management. We will now take up those proposals which seem to us suitable to facilitate the fulfillment of the above demands by practical business.
The most important step towards promoting applied research in management is to concentrate on one's strengths, i.e. on such areas of research for which the research entity
has a convincing pre-qualification in basic research. By such focusing, the risks of
cooperation become calculable and limitable for the partner from practical business.
These areas should be developed and offered like products (see below) on the model of
professionally operating institutions (e.g. Fraunhofer Gesellschaft, Battelle-Institut).
Owing to the scarce resources for research, those products should be pushed which
promise a long life cycle in practice and are difficult to imitate. It would be useful if
reliable 'market research' determined those aspects of the technologies of the future
(such as environmental protection, bio-technology, micro-electronics, new materials,
etc.) which are relevant to the management science. Incidentally, it is recommended
that the 'scope of the product' should be adapted not only to one's capacity but also to
the complexity of the problem. The natural sciences, which are so often cited as a model, plan their research programs on a much smaller scale than the social and economic
sciences. One must not forget, however, that the manifold interdependences of economic and social phenomena render the formation of easily manageable areas of re-
search more difficult.
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Research products are a suitable starting point for research marketing. This research
marketing helps to develop and reinforce the favorable image of individual researchers
in the discipline and of the discipline itself. It is recommended to put the emphasis on
the persons engaged in research (more personalization!) and not on the institutions,
since a good reputation and confidence depend mainly on persons and not on institutions. For this there are also various tested models. Mention should be made of regular presentations of the achievements of applied research to selected target groups,
participation in scientific fairs and specific conferences (jointly with the business partners, impossible), and publication of research results in practice-oriented trade periodicals and corporate magazines. The setting up of contact offices for the non-university
community of experts (so-called external departments) has proved successful. Getting
in touch with the general public should also be contemplated (cf. the display of research objects in a Berlin department store). The principle must be that it is the duty of
the researcher to distribute information about applied research to potential users. Once
this principle is accepted, the researcher has to consider for which target groups in
practical business the gained insights might be of importance.
The excessive teaching load is often given as the reason for the inadequate capacity for
research. It should be worthwhile trying to turn a supposed weakness into a strength
and thus make a contribution to the preservation and expansion of our research capacity.
A starting point could be the systematic utilization of students' test performances as
contributions to research. Unfortunately, diploma papers and dissertations are still
written which, because of their subject matter, can have no other function but collect
dust in university archives. But such performances by students could constitute respectable research contributions if they are integrated into a comprehensive research program and if they are properly supervised by university staff. As a by-product, the
student benefits from a purposeful contact with practical business, which may be important as to his professional training.
The success of applied research in management largely depends on the careful selection
of the partner in practical business. Special attention should be paid to the pre-qualifi-
cation of the partner (there must be a minimum knowhow concerning the specific
problem), and to his willingness to support experiments in the field of applied research
and also to tolerate failures temporarily. The partner should also be prepared to bear
the risk which is inextricably involved in applied research, including the financial risk.9
An applied research worker - even less than a consultant - cannot be expected to submit a binding offer amounting to a performance guarantee. For this reason alone, the
perception of applied research as a 'cheap' form of consulting is an incorrect one. However, there may be agreements on cooperation and partnerships between suitable partners for specified periods of time and specific problem areas.
Finally, possible cooperation between different research facilities at universities shall be
discussed. There are good reasons for ranking it last. One is that experiences with such
cooperation have not only been positive,10 a second is that university institutions, especially in the field of research, are extraordinarily sensitive to actual or supposed encroachments on their autonomy as a consequence of controlling measures. University
researchers see themselves as being in a protected area (so there should be no compulsory cooperation). In view of the necessary prequalification of the researchers, however, cooperation is always imperative when the problem to be solved involves several
areas of a discipline or even different disciplines. Closely related to the issue of cooperation between research facilities is the issue of their specialization.
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There can be no doubt that specialization in applied research or in basic research engenders some advantages. We believe, however, that these advantages are at least offset
by its potential disadvantages. The (negative) example of the cooperation difficulties
between 'theoretical' and clinical research in medicine should be a warning. Accordingly, side by side with the principle of unity between teaching and research, the principle of the personal and institutional unity of basic research and applied research should
be upheld. It is not a violation of this principle if the activities of applied research are
transferred to a unit separate from the other university activities and carried on, for
example, by a study group.
Where are the Limits to Applied Research in Management?
Even an intensified type of applied research in management retains the right to autonomy, i.e. the decision as to the goal, subject matter and method of research lies with the
university researchers. The principle of 'He who pays the piper . . .' has only very limited application in the field of research. University institutions must not degenerate into
'extended workshops' of practical business.11
A clear-cut limit to applied research in management arises from its subject matter. Research in management is largely denied the possibility of resource-saving and risk-reducing field experiments. As its results are mostly of an intangible nature, they are dif-
ficult to present. The quantification of its achievements involves great difficulties,
whereas, for example, the value of some research in law can be measured relatively
quickly and unambiguously by whether its result is accepted by the law courts and is
incorporated into current law. Finally, the recommendations of applied research in
management frequently encounter massive resistance (for example, when it is a matter
of shifting locations, closing down plants or employing microelectronics, the 'job
killer').
A further limitation to applied research is the present framework of conditions for university activities. There can be no doubt at all that the so-called university reforms have
led to an increase in the administrative burden and to even more red tape, thus im-
peding innovations. It is also undisputed that a) budget restrictions and employment
regulations obstruct the mobility and internationalization of researchers, b) the system
of remuneration offers no incentives for outstanding achievements in research and c)
financing the universities exclusively by the state does not stimulate the obtaining of
research funds from the outside, as is common in the U.S.A. Among the most unfavorable conditions is the existing and, at least in the medium term, continuing teaching
burden which has assumed, in some areas, downright unbearable proportions and has
degraded the universities to training facilities for the masses. To change these conditions is outside the scope of the authority of the individual researcher, whereas the
particular research facility may very well contribute to an improvement in its research
climate.
Even the willingness of practical business to cooperate with academic research institutions may prove to be restrictive. There are many examples of the fact that contact
between practical business and academics is not free of friction. An empirical determination of who is responsible for the greater omissions - business failing to implement
research findings or management theory being too far removed from practice - would,
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at best, lead to further friction. The fact remains that applied research in management
does not operate in an altogether cooperative environment but has to expect considerable reservations and initial fears ("Schwellenangst").
Outlook
We have been able to show that applied research in management is beneficial not only
to basic research at the universities, but also to practical business. To achieve this, however, some clearcut demands by practical business as well as considerable restrictions
on the part of academic research units have to be taken into account. For the further
development of applied research, two factors are, in our opinion, of decisive importance, i.e. its cooperation with basic research and the attainment of a higher profile.
In spite of their essential differences, an intensification of the cooperation between ap-
plied and basic research is advisable. The cooperation with basic research is advantageous because there is nothing more practical than good theory and because basic
research obviates the danger of a one-sided orientation toward day-to-day issues. A
higher profile for applied research requires that researchers expressly commit themselves to this variant of research, that achievements in applied research are given due
credit in academic circles, and that discussions of objectives, methods, and results in
applied research become a matter of course in a similar way as in the field of basic research. The demand for cooperation and the demand for a higher profile are only in
apparent contradiction: Applied research in management will perform its function at
the interface of academic research and practical business all the more effectively, the
more independent and the better recognized its achievements are.
Footnotes
1 For further details, see Witte, Eberhard/Griin, Oskar/Bronner, Rolf, ,,Pluralismus in der
betriebswirtschaftlichen Forschung", ZfbF, Vol. 27 (1975), pp. 796-800.
2 Even Immanuel Kant has expressed himself about the platitude: "It might be right in theory,
but it is worthless in practice". Immanuel Kant, ,,Von den Traumen der Verknunft. Kleine
Schriften zur Kunst, Philosophic, Geschichte und Politik", Wiesbaden 1979, p. 343 et seq.
3 It is a distinct warning to Austrian business researchers, that the Bundeswirtschaftskammer der
Gewerblichen Wirtschaft (a federation of Austrian business enterprises) has decided to co-
operate with the MIT instead of with Austrian universities.
4 Above all, see Szyperski, Norbert, ,,Zur wissenschaftsprogrammatischen und forschungsstrategischen Orientierung der Betriebswirtschaftslehre", ZfbF, Vol. 23 (1971), pp. 261-282;
Stahlin, Wigand, ,,Theoretische und technologische Forschung in der Betriebswirtschafts-
lehre", Stuttgart 1973. See also Witte, Eberhard (ed.), ,,Der praktische Nutzen empirischer Forschung", Tubingen 1981 especially the contributions of Otto H. Poensgen, Klaus
Brockhoff, Norbert Szyperski/ Detlef Muller-Bdling, Werner Kirsch.
5 See Gerok, Wolfgang, ,,Zur Lage und Verbesserung der klinischen Forschung in der Bundesrepublik Deutschland", Boppard 1979.
6 Technicians call the phase between basic research and product development "perimeter re-
search". Perimeter research strives for application (invention) instead of basic findings.
7 The development of oral Antidiabetika was for example caused by some observations made by
a clinical researcher who was administering sulfonamides.
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8 "We can find a miserable group of political scientists interfering in natural sciences, of biologists giving their opinion on technology, and of environmental scientists expressing their
views on anything". Therefore the Austrian economist G. Tlchy has called for efficient academic self-control. His lecture was given at a meeting of the Federation of Austrian University
Professors on June 12, 1986.
9 The "Osterreichische Forschungsffcrderungsfonds fur die Gewerbliche Wirtschaft" (supporting
applied research) has therefore made a rule that benefits will be awarded only if costs are being shared.
10 This conclusion is drawn from remarks of representatives of the Batelle-Institut. There was,
however, some positive experience from "group-projects", involving a number of clients. Another interesting example is the "Schaffher-Modell", used at the Department of Industrial Production Management at the University of Erlangen-Ntirnberg. For further details see Schaffner, Gottfried J., "Implementierung innovativer betriebswirtschaftlicher Erkenntnisse durch
eine spezifische [Cooperation zwischen Theorie und Praxis". Ph.D. Diss., Erlangen-Nttrnberg
1982.
1 1 Prof. Fritz Paschke, who has been doing successful research work on electrical engineering and
on electronics in Austria for a long time, cites two prerequisites: (1) The task should comprise a
problem which is interesting for scientists; (2) it should be impossible for the business firm to
solve the problem without external research support.
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