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Business Research Methods:

An Introduction

"The secret of success is to know something


nobody else knows. "
Aristotle Onassis
Learning Objectives

Upon completion of this chapter, you will be able to:


 Understand the difference between basic and applied research
 Define business research
 Understand the roadmap to learn business research methods
 Learn how business research methods can be used as a decision
making tool by the managers
 Understand the business research process
 Get a preliminary idea about the use of software for data
preparation and data analysis
The nature of research
• On tv, newspaper the term “research” is
always mentioned
– Findings of a recent poll of people’s opinions
referring to the way which the data were
collected
– Newspapers report the findings of market
research companies’ findings
– Advertisers highlight the ‘results of research’
• However, many of these everyday uses of
the term ‘research’ are not the true
meaning of the word...
The nature of research
• The ways in which the term is used wrongly:
– Just collecting facts or information with no clear
purpose
– Reassembling and reordering facts or information
without interpretation
– As a term to get your product or idea noticed and
respected
The nature of research
• So, research should have a number of
characteristics:
– Data are collected systematically
– Data are interpreted systematically
– There is a clear purpose: to find things out
The nature of business and management
research

• Three things combine to make business and


management a distinctive focus for research:
1. The way in which managers and researchers draw on
knowledge developed by other disciplines
2. The fact that managers tend to be powerful and busy
people. Therefore they are unlikely to allow research
unless they can see personal or commercial advantages
3. The requirement for the research to have some practical
consequence.
The nature of business and management
research
• Management research is “transdisciplinary”.
• Using knowledge from a range of disciplines
enables management research to gain new
insights that can not be obtained through all
of these disciplines seperately.
The nature of business and management
research
• Business and management reseach not only
needs to provide findings that advance
knowledge and understanding, it also needs to
address business issues and practical
managerial problem.
• The findings of business and management
research might also contain practical
implications
The nature of business and management
research
• Business and management research should:
– Advance knowledge
– Adress business issues
– Solve managerial problems
– Promote the common good
Introduction
 Business researchers systematically collect, compile, analyze,
and interpret data to provide quality information based on
which a decision maker will be able to take a decision in an
optimum manner.
 Conducting research to deal with any problem is a scientific,
systematic, and interlinked exercise, which requires sound
experience and knowledge.
Difference Between Basic and Applied Research

• Basic research is generally not related to a specific problem and its


findings cannot be immediately applied.
• Attempts to expand the limits of knowledge.
• Not directly involved in the solution to a pragmatic problem.

• Applied research directly addresses the problem at hand. Applied


research is launched by the firm, agency, or individual facing a
specific problem.
• Conducted when a decision must be made about a specific
real-life 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 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
Defining Business Research

• Business research method is a systematic and scientific procedure


of data collection, compilation, analysis, interpretation, and
implication pertaining to any business problem.
• Business research is defined as the systematic and objective process
of gathering, recording, and analysing data for aid in making
business decisions (Zikmund, 2007).
• Cooper and Schindler (2009) define business research as a
systematic enquiry that provides information to guide managerial
decisions.
Business Research Methods: A Decision Making
Tool in the Hands of Management

• 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
(1)Problem or Opportunity Identification
• Any delay in the problem identification and solution
implementation; and the opportunity identification and
encashment may become harmful to the organization.
(2) Diagnosing the Problem or Opportunity

• Organizations present these problems or opportunity scenarios to


the business researchers.
• Business researchers actually diagnose the problem or opportunity.
• Diagnosing involves exploring the situation to have a better insight
about the situation.
(3)Executing Business Research to
Explore the Solution

• After the identification and diagnosis of the problem, business


researchers systematically conduct research to present a solution.
(4)Implement Presented Solution

• Business researchers conduct research in consultation with the


decision makers of the concerned organization. The findings are
presented to the decision maker and he or she analyses these
findings in the light of his or her decision range.
(5)Evaluate the Effectiveness of Decision
Making

• After taking a decision, its effectiveness is examined. This is


sometimes referred to as evaluation research.
Use of Software in Data Preparation
and Analysis
• Nowadays, it is irrational to deal with data preparation and analysis
without the use of existing statistical software.
• This section focuses on introducing three widely used software
programs. They are MS Excel (2007), Minitab®, and SPSS (17).
Few questions must be assured before one conducts research

• What information will aid decision making?


• What are we going to do with this
information?
• How should we collect this information?
• What are we going to measure?
• How should we analyse result?
• How much should we spend on the entire
research process.
Management should weigh upon the outcome of not using
research

• What decision are we faced with?


• What are the implications of taking wrong
decisions?
• What is the risk of taking a wrong decision
based on available information?
• How can we justify the decision with out
collecting data?
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.
Determining When to Conduct
Business Research
Availability of Data Benefits
Time Constraints Nature of the Decision vs. Costs
Is the infor- Does the value
Is sufficient time Is the decision
mation already Yes of the research Yes Conducting
available before Yes of considerable Yes
on hand information Business
a managerial strategic
inadequate exceed the cost
decision
for making
or tactical
of conducting Research
must be made? importance?
the decision? research?

No No No No

Do Not Conduct Business Research


Value versus Costs
• Potential Value of a Business Research Effort
Should Exceed Its Estimated Costs
Value Should Exceed
Estimated Costs
Costs
Value •Research
expenditures
•Decreased certainty
•Delay of business
•Increased likelihood
decision and
of a correct decision
possible disclosure
•Improved business of information to
performance and rivals
resulting higher
•Possible erroneous
profits
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
Internet Research
• Seeking facts and figures about an issue
• Surveys on Web sites
Studying Business Research

New Greater
Growth of
Research Computing
Perspectives Internet
Power

Business
Stakeholder
Influence
as a
discipline
Factors

Competition Complex
Decisions

Government
Intervention
1-32
Exhibit : Sources of Business Intelligence

Government/
Competitive
Regulatory

Demographic Economic
Business
Intelligence

Technological Cultural/
Social

1-33
Exhibit 1-2 Hierarchy of Business Decision
Makers

Visionari
es

Standardized
Decision Makers

Intuitive Decision
Intuitive Makers
Decision Makers

1-34
Exhibit 1-2 Hierarchy of Business Decision
Makers

Visionari
es

Standardized
Decision Makers

Intuitive Decision Makers

1-35
Exhibit :Hierarchy of Business Decision Makers

Visionari
Visionari
es
es

Standardized
Decision Makers

Intuitive Decision Makers

1-36
Information Value Chain

Data collection/ Data


transmission management

Characteristics

Decision Data
support systems interpretation

Models

1-37
Characteristics of Good Research

Clearly defined
purpose
Detailed research
process
Thoroughly planned
design
High ethical standards

Limitations addressed
Adequate analysis
Unambiguous presentation

Conclusions justified
Credentials
1-38
1-39

Exhibit 1-4
Business Research Suppliers

External Research Suppliers

Business Research Firms

Communication Agencies

Consultants

Trade Associations
Specialty Business Research Firms

Methodology

Process

Industry

Participant group

Geographic Region

1-40
Trade Associations
NHRA
CASRO
MRA
ESOMAR
BRA
AMA
WAOBRP
MPA
NAB
1-41
Exhibit : Who Conducts Research?

1-42
Why Research ?

 Business Competition
– Business Environment
– Maturing of management
– Explosive growth of the Internet
– Stakeholders demanding greater influence
– More global competition
– More government intervention
Why Research? (Continued)

• More complex decisions


• Lower-cost data collection
• Better visualization tools
• Powerful computations
• Advanced analytical tools
• New perspectives on established research
methodologies
What Research Is Not ?

• Research isn’t information gathering


• Research isn’t the transportation of facts
Don’t Make For Good Research

– Self-enlightenment.
– Comparing data sets.
– Correlating data sets.
– Problems with yes / no answers
What’s the Difference Between “Method” and
“Methodology”?
Method: Methodology:
• Techniques for • The underlying theory
gathering evidence and analysis of how
• The various ways of research does or should
proceeding in gathering proceed, often
information influenced by discipline
Good Research Requires:

– The scope and limitations of the work to be clearly defined.


– The process to be clearly explained so that it can be
reproduced and verified by other researchers.
– A thoroughly planned design that is as objective as possible.
– Highly ethical standards are applied.
– All limitations are documented.
– Data be adequately analyzed and explained.
– All findings are presented unambiguously and all conclusions
be justified by sufficient evidence.