Friday 28 December 2012

Business Research

Business Research Defined


Business research is defined as the systematic and objective process of gathering, recording, and analyzing data for aid in making business decisions.

This definition suggests,

first, that research information is neither intuitive nor haphazardly gathered. Literally, research (re-search) means to "search again. " It connotes patient study and scientific investigation wherein the researcher takes another, more careful look at data to discover all that can be known about the subject of study.

Second, if the information generated or data collected and analyzed are to be accurate, the business researcher must be objective. The need for objectivity was cleverly stated by the 19th-century American humorist Artemus Ward, who said, "It ain't the things we don't know that gets us in trouble. It's the things we know that ain't so," Thus, the role of the researcher is to be detached and impersonal rather than engaging in a biased attempt to prove preconceived ideas. If bias enters the research process, the value of the data is considerably reduced.The importance of objectivity cannot be overemphasized. Without objectivity, research is valueless.

Third, the above definition of business research points out that its objective is to facilitate the managerial decision-making process for all aspects of a business: finance, marketing, personnel, and so on.' The definition is not restricted to one aspect of business. An essential tool for management in its problem-solving and decision-making activities, business research generates and provides the necessary qualitative or quantitative information upon which to base decision.



Business Research Types

Basic ( pure)research :Basic ( pure)research attempts to expand the limits of knowledge. It does not directly involve the solution to a particular, pragmatic problem. It has been said that "there is nothing so practical as a good theory." Although this statement is true in the long run, basic research findings generally cannot be immediately implemented. Basic research is conducted to verify the acceptability of a given theory or to discover more about a certain concept.

For example, consider this basic research conducted at a university. Academic researchers investigated whether an individual's perception that he or she was doing well on a task would have any influence on future performance. Two nearly identical groups of adults were given the same set of ten puzzles to solve.

After the subjects had given their solutions to the researchers, they were told "how well" they did on the test. All members of the first group were told that they had done well: 70 percent correct (regardless of the actual percent correct). The members of the other group were told that they had done poorly (30 percent correct). Then both groups were given another set of ten puzzles.

Applied research : Applied research is conducted when a decision must be made about a specific real-life problem. Applied research encompasses those studies undertaken to answer questions about specific problems or to make decisions about a particular course of action or policy. For example, an organization contemplating a paperless office and a networking system for the company's personal computers may conduct research to learn the amount of time its employees spend at personal computers in an average week.



Scientific Method

The procedures and techniques utilized by basic and applied researchers do not differ substantially. Both employ the scientific method to answer the questions at hand. Broadly characterized, the scientific method refers to techniques and procedures that help the researcher to know and understand business phenomena. The scientific method requires systematic analysis and logical interpretation of empirical evidence (facts from observation or experimentation) to confirm or disprove prior conceptions. In basic research, first testing these prior conceptions or hypotheses and then making inferences and conclusions about the phenomena lead to the establishment of general laws about the phenomena.

Use of the scientific method in applied research assures objectivity in gathering facts and testing creative ideas for alternative business strategies.




The Decision-making Process Associated with the Development and Implementation of a Strategy

Identifying Problems or Opportunities

Before any strategy can be developed, an organization must determine where it wants to go and how it will get there. Business research can-. help managers plan strategies by determining the nature of situations or by identifying the Consider two examples:

•The description of the dividend history of stocks in an industry may point to an attractive investment opportunity. Information supplied by business research may also indicate problems.

•Employee interviews undertaken to characterize the dimensions of an airline reservation clerk's job may reveal that reservation clerks emphasize competence in issuing tickets over courtesy and friendliness in customer contact.

Diagnosing and Assessing Problems or Opportunities

After an organization recognizes a problem or identifies a potential opportunity, an important aspect of business research is the provision of diagnostic information that clarifies the situation. Managers need to gain insight about the underlying factors causing the situation. If there is a problem, they need to specify what happened and why. If an opportunity exists, they may need to explore, clarify, and refine the nature of the opportunity.

Selecting and Implementing a Course of Action

After the alternative courses of action have been clearly identified, business research is often conducted to obtain specific information that will aid in evaluating the alternatives and in selecting the best course of action. For example,

Japan suppose a fax machine manufacturer must decide to build a factory either in or in South Korea. In such a case, business research can be designed to supply the relevant information necessary to determine which course of action is best for the organization.

Evaluating the Course of Action

After a course of action has been implemented, business research may serve as a tool to inform managers whether planned activities were properly executed and whether they accomplished what they were expected to accomplish. In other words, managers may use evaluation research to provide feedback for evaluation and control of strategies and tactics.



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.

In addition to measuring the extent to which completed programs achieved their objectives or whether continuing programs are presently performing as projected, evaluation research may provide information about the major factors influencing the observed performance levels.

Performance-monitoring Research

Performance-monitoring research is a specific type of evaluation research that regularly, perhaps routinely, provides feedback for the evaluation and control of recurring business activity. For example, most firms continuously monitor wholesale and retail activity to ensure early detection of sales declines and other anomalies. In the grocery and retail drug industries, sales research may use the universal product code (UPC) for packages, together with computerized cash registers and electronic scanners at checkout counters, to provide valuable market-share information to store and brand managers interested in the -retail sales volume of specific products.

Total quality management (TOM)

Total quality management (TOM) is a business philosophy that embodies the belief that the management process must focus on integrating customer-driven quality throughout the organization. Total quality management stresses continuous improvement of product quality and service. Managers improve durability and enhance features as the product ages. They strive to improve delivery and other services to keep their companies competitive.











Major Topics for Research in Business: lists several major topics for research in business are given bellow:

General Business Conditions and Corporate Research:

•Short-range forecasting (up to 1 year) •Long-range forecasting (over 1 year) •Business and industry trends•Global environments•Inflation and pricing•Plant and warehouse location•Acquisitions

Financial and Accounting Research

•Forecasts of financial interest-rate trends •Stock, bond, and commodity value predictions •Capital formation alternatives•Mergers and acquisitions•Risk-return trade-offs•Impact of taxes•Portfolio analysis•Research on financial institutions•Expected rate of return•Capital asset pricing models•Credit risk•Cost analysis jai

Management and Organizational Behavior Research

•Total quality management •Morale and job satisfaction •Leadership style•Employee productivity •Organizational effectiveness•Structural issues•Absenteeism and turnover Organizational climate•Organizational communication •Time and motion•Physical environment•Labor union trends

Sales and Marketing Research:

•Market potentials •Market share•Market segmentation •Market characteristics •Sales analysis•blishment of sales quotas, territories•Distribution channels •New product concepts •Test markets•Advertising research

•Buyer behavior •Customer satisfaction •Web site visitation rates

information Systems Research:

•Knowledge and information needs assessment •Computer information system use and evaluation •Technical support satisfaction•Database analysis•Data mining•Enterprise resource planning systems•Customer relationship management systems

Corporate Responsibility Research:

•Ecological impact•Legal constraints on advertising and promotion •Sex, age, and racial discrimination/worker equity •Social values and ethics



What is Decision making?

Decision making :Decision making is the process of resolving a problem or choosing among alternative opportunities. Every business problem or decision making situation can be classified on a continuum from complete certainty to absolute ambiguity. This shown in the following figure.

Categories of Decision making

Certainty : Decision maker has all the information about the problem and the outcome of the decision, here research is not needed. However, complete certainty is rare.

Uncertainty : Decision maker knows general nature of problem but the information about various alternatives is incomplete. There is need for additional need for more information before taking any decision. Here research is needed to clarify the nature of the decision.

Ambiguity : Nature of the problem is totally unclear. Objectives and alternatives are difficult to define. Most difficult decision situation. More ambiguous is situation more research is needed to take decisions.



Types Of Business Research

BR provides information to managers for taking decisions. Because of various types of problems with varying degree of uncertainty one can classify business research into the following categories.

Exploratory Research:•Initial research conducted to clarify and define the nature of a problem

Descriptive Research: •Describes characteristics of a population or phenomenon •Some understanding of the nature of the problem

Causal Research: •Conducted to identify cause and effect relationships









Stages in the Research Process

•Research is a cyclical process - conclusions generate new ideas •Stages can overlap chronologically •Stages are functionally interrelated

forward linkage: A term implying that the early stages' of the research process will influence the design of the later stages.

backward linkage: A term implying that the late stages of the research process will have an influence on the early stages.









Problem Definition

problem definition

problem definition allows a researcher to set the proper research objectives. If the purpose of the research is clear, the chances of collecting the necessary and relevant information--and not collecting surplus information—will be much greater.

It was Albert Einstein who noted that "the formulation of a problem is often more essential than its solution'. This is good advice for managers.

Exploratory Research:

Exploratory research is usually conducted during the initial stage of the research process. The preliminary activities undertaken to refine the problem into a researchable one need not be formal or precise. The purpose of the exploratory research process is to progressively narrow the scope of the research topic and to transform discovered problems into defined ones, incorporating specific research objectives.



(Problem discovery )Secondary Data Secondary :Secondary Data are data previously collected and assembled for some project other than the one at hand.

Primary date: Primary date are data gathered and assembled specifically for the project at hand.

pilot study:Any small-scale exploratory research technique that uses sampling but does not apply rigorous standards.



State the research objectives

◙After identifying and clarifying the problem, with or without exploratory research, the researcher should state the research objectives. ◙Statement of the problem to be investigated is the research objectives.

◙It is best to list the objectives either in order of importance or in general terms. First, moving from general to specific objectives. Experts suggest “Funnel” approach. ◙The best expression of the research objectives is a well defined testable hypothesis. ◙A hypothesis is a statement that can be refuted or accepted by an empirical data

Research Design

◙Specifies methods and procedures. ◙It is a master plan, framework for action or blue print for conducting the research . It specifies methods and procedures to be used ◙Selecting design is complicated by the availability of a large variety of methods, techniques, procedures, and sampling plans. ◙For example, one may decide on a secondary data study, case study, survey, experiment, or simulation.



Selecting Appropriate Research Designs

◙There are four basic methods of descriptive & causal research. ◙Surveys: Most common method generating primary data. A survey is a research technique in which information is gathered using a questionnaire. ◙Experiments: These are used to establish the cause and effect relationship between two or more variables. Researcher sees this relationship by changing one variable and sees the changes in another variable. ◙Secondary data: Like exploratory research, descriptive research also uses secondary data. Secondary data are those information that already exist and collected for other purpose. ◙Observation: Sometimes information is obtained by observing the phenomenon or an event, manually or through mechanical observation.



Selecting a Sample

◙Sample: Subset of a larger population. ◙There are many methods of sampling. ◙The researcher has to decide between probability and non-probability techniques ◙Who is to be sampled? ◙How large a sample? ◙How will sample units be selected

Data Collection

◙Data collection involves a field force or staff that operates either in the field, as in the case of personal interviewing ◙From an office by telephone (telephone or computer-assisted telephone interviewing). ◙Through mail (traditional mail and mail panel surveys with households), or electronically (e-mail or Internet). . ◙In many research studies there are two phases to the process of collecting data: pretesting phase and the main study. In pretesting, the researcher uses a small sample for any refinement in the main study.



Processing and Analyzing Data

◙Data preparation includes the editing, coding, transcription, and verification of data. ◙Each questionnaire or observation form is inspected or edited and, if necessary, corrected. ◙Number or letter codes are assigned to represent each response to each question in the questionnaire. ◙The data from the questionnaires are transcribed or keypunched onto magnetic tape or disks, or input directly into the computer. ◙Analysis is the application of reasoning to understand and interpret the data that have been collected. ◙The data are analyzed to derive information related to the components of the research problem and, thus, provide input in to the management decision problem.

Drawing Conclusions and Preparing a Report

◙The final step in the research process. ◙The research report should communicate the research findings ◙The entire project should be documented in a written report that addresses the specific research questions identified, describes the approach, the research design, data collection and data analysis procedures adopted, and presents the results and the major findings. ◙In addition, and oral presentation should be made to management using tables, figures, and graphs to enhance clarify and impact. ◙In the last slide we give the entire research process in graphical form



Influence of Uncertainty on types of Research

Exploratory Research

(Ambiguous Problem) Descriptive Research (Aware of partially defined Problem) Causal Research (Problem Clearly Defined)

1. Our sales are declining and we don’t know why.”

2.Would people be interested in our new product idea?”

3. Absenteeism is increasing and we don’t know why? 1. What kinds of people are buying our product? Who buys our competitor’s product?”

2. What features do buyers prefer in our product?” 1. Will buyers purchase more of our products in a new package?

2. Which of two advertising campaigns is more effective?”

3. Which of the two training programs is more effective to employees?

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