Business Research

Methods

Course Title:

Business Research Methods

Text Book:

Business Research Methods by William G.

Zikmund 7. edition

Ch. 1THE ROLE OF BUSINESS

RESEARCH

SCOPE OF BUSINESS RESEARCH

• Effective decision making.• Unavailability of portable solutions• Frequently changing business environment.• To explore new markets and opportunities• To identify problem area.

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.

Types of Business Research

Basic research is “experimental and theoretical work undertaken

to acquire new knowledge without looking for long-term

benefits other than the advancement of knowledge.”

It Attempts to expand the limits of knowledge.

It is not directly involved in the solution to a pragmatic or real

life problem.

Basic research is conducted to test theory or to discover more

about a concept.

It focuses on generating fundamental knowledge

BASIC RESEARCH

Basic Research Example

Is executive success correlated with high need for

achievement?

Applied Research

Applied research is research undertaken to solve

practical problems rather than to acquire

knowledge for knowledge sake.

It is conducted when a decision must be made

about a specific real-life problem.

Focuses on real-world questions and applications

Applied Research Examples

Should McDonalds add Italian pasta dinners to its

menu?

Business research told McDonald’s it should not?

Managerial Value of Business Research

• Product-Oriented firms: Prioritizes decision making that emphasizes the physical product design trendiness or technical superiority.Research focuses on technicians and experts in the field.

• Production-Oriented firms: Prioritizes efficiency and effectiveness of the production processes in making decisions.Research focuses on line employees, engineers and other efficiency experts.

Managerial Value of Business Research

• Marketing-Oriented firms: Focuses on how the firm provides value to customers.Research focuses on customers

Managerial Value of Business Research

• Decision making process: 1) Indentifying problems or opportunities:2) Diagnosing and Assessing problems or opportunities.3) Selecting and implementing a course of action4) Evaluating the course of action.

NEED OF BUSINESS RESEARCH• Time constraints: If the decision does not need to be taken

immediately then research is needed otherwise not.• Availability of data: If the required data to conduct the

research is available then research should be conducted otherwise it is not possible to undertake a research.

• The nature of decision to be made: Deciding about the need of research also depends upon the nature of the decision to be made. If the decision is not a routine decision and needs high investment then research should be undertaken otherwise not.

• Benefits versus Costs: Deciding about the research also depends upon the benefits and costs associated with the underlying project. In order to conduct a research for a project, the project’s benefit must be higher than its cost.

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

CH. 2THEORY BUILDING

THEORY

Goals of theory:1) Understanding:2) Predicting

The meaning of Theory:A coherent set of general propositions used to

explain the apparent relationships among certain observed phenomena. Theories allow generalizations beyond individuals facts or situations.

CONCEPT

• A concept (or construct) is a generalized idea about a class of objects, attributes, occurrences, or processes that has been given a name.

• Concepts are the building block of a theory• Concepts abstract reality. That is, concepts are

expressed in words, letters, signs, and symbols that refer to various events or objects. For example assets, liabilities, customer equity, raw material etc.

CONCEPT

• Ladder of abstractionAssets

Plant Machinery

Punch Press

Reality

CONCEPT

• Concepts are abstractions of reality

Observations of objects and events (reality)

ConceptsAbstract Level

Empirical level

Nature of PROPOSITIONS

• Concepts are the basic units of theory development. However, theories require an understanding of the relationship among concepts. Thus, once reality is abstracted into concepts, the scientist is interested in the relationship among various concepts. Propositions are statements concerned with the logical relationships among concepts. A proposition explains the logical linkage among certain concepts by asserting a universal connection between concepts.

The Scientific Method• Definition: The Scientific Method is a set of prescribed procedures for

establishing and connecting theoretical statements about events for analyzing empirical evidence and for predicting events yet unknown.

• Following are the steps involved in the application of the scientific method1. Assessment of relevant existing knowledge of a phenomenon2. Formulation of concepts and propositions3. Statement of Hypothesis4. Design of research to test the hypothesis5. Acquisition of meaningful empirical data6. Analysis and evaluation of data7. Proposal of an explanation of the phenomenon and statement of new problems raised by the research.

Theory building is a process of increasing abstraction

Increasingly more abstract

Theories

Propositions

Concepts

Observation of objects and events (reality)

An example of a theoryLabor market conditions, number of organizations,

personal characteristics,and other partial dterminantas of

ease of movement

Perceived ease of movement (e.g.

expectation of finding alternatives, unsolicited

opportunities)

Perceived desirability of

movement (e.g job satisfaction)

Equity of pay, job complexity, participation in decision making and

other partial determinants of

desirability of movement

Job performances

Intention to quit

Voluntary job

turnover

Generation of Theory

• Deductive reasoning: The logical process of deriving a conclusion about a specific instance based on a known general premise or something known to be true.For example: we know that all professors are human beings. If we also know that Mr. Ahmad is a professor, then we can deduce that Ahmad is a human being.

• Inductive reasoning: The logical process of establishing a general proposition on the basis of observation of particular facts.For example: All professors that have ever been seen are human beings; therefore all professors are human beings.

Verifying theory

• In order to make predictions on the basis of theory, the theory must be tested and verified first. Once the theory is verified, we can utilize it to make predictions.

Ch. 3THE RESEARCH PROCESS

• Decision making: The process of resolving a problem or choosing among alternative opportunities.

• Every decision-making situation can be classified based on whether it best represents a problem or an opportunity and where the situation falls on continuum from absolute ambiguity to complete certainty.

• Certainty: Complete certainty means that the decision-maker has all information needed to make an optimal decision.

• Uncertainty: Uncertainty means that the manager grasps the general nature of desired objectives but the information about alternatives is incomplete.

• Ambiguity: Ambiguity means that the nature of the problem itself is unclear. Objectives are vague and decision alternatives are difficult to define.

TYPES OF BUSINESS RESEARCH

• Exploratory research: It is conducted to clarify ambiguous situations or

discover ideas that may be potential business opportunities.

Exploratory research is usually conducted when the researcher does not know

much about the problem and needs additional information or desires new or

more recent information.

It is the Initial research conducted to clarify and define the nature of a

problem.

it Does not provide conclusive evidence.

Subsequent research expected.

• Descriptive Research: It describes characteristics of objects, people, groups, organizations or environments tries to “paint a picture” about a given situation.

TYPES OF BUSINESS RESEARCH

Descriptive research is undertaken to provide answers to questions of who, what, where, when, and how.

Describes characteristics of a population or phenomenon

Some understanding of the nature of the problem

TYPES OF BUSINESS RESEARCH• Causal Research: It allows causal inferences to be made, seeks to identify

cause-and-effect relationships.• Causal inference: A conclusion that when one thing happens, another

specific thing will follow.A causal inference can only be supported when very specific evidence exists. Three critical pieces of causal evidence are:1) Temporal Sequence: It deals with the time order of events, i.e. the cause must occur before the effect.2) Concomitant Variance: It occurs when two events “covary” or correlate meaning they vary systematically.3) Nonspurious Association: It means that A cause and an effect is true and not simply due to some other variable. For example if murder rates increase with increase in ice cream rates, we cannot say that there is a causality between the two variables. They may be under effect of a third variable like weather.

Degrees of Causality

• Absolute causality: Means the cause is necessary and sufficient to bring about the effect.

• Conditional causality: Means that a cause is necessary but not sufficient to bring about an effect.

• Contributory causality: Means the cause need be neither necessary nor sufficient to bring about an effect.

STAGES IN THE RESEARCH PROCESS

1. Defining the problem2. Planning a research design3. Planning a sample4. Collecting the data5. Processing and Analyzing the data6. Formulating the conclusions and preparing

the report

1. Defining the research objectives

• Research objectives: The goals to be achieved by conducting research.In order to state and define research objectives, the researcher should understand the managerial decision to be made which is called the Problem Statement.

• Defining managerial decision situation:“A problem well defined is a problem half solved”

• Exploratory research is used to help identify and clarify the decisions that need to be made.

• Previous research: For the sake of exploratory research, previous research on the same topic is studied in order to get some help. In research terminology, it is calledLiterature review: A directed search of published works, including periodicals and books, that discuss theory and presents empirical results that are relevant to the topic in hand.

• Pilot studies: A small-scale research project that collect data from respondents similar to those to be used in the full study.Focus group: A small group discussion about some research topic led by a moderator who guides discussion among the participants.Group discussion consist of 6-12 people in a loosely structured format.

• Stating research objectives: After identifying and clarifying the problem with or without exploratory research, the researcher must formally state the research objectives.

• Linking decision statements, objectives and hypothesis: Once decision statements are understood, these are converted into research objectives. The research objectives are then transformed to research hypothesis which will then be tested through different analytical tools.

2. Planning the research design

• Research design: A master plan that specifies the methods and procedures for collecting and analyzing the needed information.

• Selection of the basic research method: There are four basic design techniques for descriptive and causal research: surveys, experiments, secondary data, and observations. The objectives of the study, the available data source, the urgency of the decision and the cost of obtaining the data will determine which method should be chosen.

• Survey: A research technique in which a sample is interviewed in some form or the behavior of respondents is observed and described in some way.

3. Planning a sample

• Sampling: Involves any procedure that draws conclusions based on measurements of a portion of the population.Who is to be sampled? How big should the sample be? How to select the sample units?Simple random sampling may be the best known type, in which every unit in the population has an equal and known chance of being selected.

4. Gathering data

• Data gathering is the process of gathering or collecting information. Data may 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.

5. Processing and analyzing data

• Data analysis: The application of reasoning to understand the data that have been gathered.

6. Drawing conclusions and preparing a report

• Communicate the research results.• The conclusions and report preparation stage

consists of interpreting the research results, describing the implications, and drawing the appropriate conclusions for managerial decisions.

Research Project vs Research Program

• Research project: A single study that addresses one or a small number of research objectives.

• Research program: Numerous related studies that come together to address multiple, related research objectives.