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Chapter 01 Im
Chapter 01 Im
Research in Business
What business research is and how it differs from decision support systems and
business intelligence systems.
2.
The trends affecting business research and the emerging hierarchy of research-based
decision makers.
3.
4.
5.
The distinction between good business research and research that falls short of
professional quality.
KEY TERMS
Key terms are shown in bold, as they appear in the text, throughout the lecture notes.
Discussion topics:
The conflict that can exist when the manager is the researcher.
Projects:
Have students investigate various journals for an article of interest to them. The
article should be no more than two years old and have sufficient content for a two
page report. The object of the critique is to describe how the study followed, or
failed to follow, the criteria for good research, as described in Chapter 1. Students
should speculate on which of the writers conclusions were warranted, and which
were not. (See Handout on next page.)
Professor ________
Students in Research Methodology Course
Project ____________________________
For your first research project, please investigate one of the journals listed below for an article of
interest to you. The article should be no more than two years old. Choose one that has sufficient
content from which you can write a report a two-page report (approximately two double-spaced
pages).
The object of your critique is to describe how the study followed, or failed to follow, the
criteria for good research, as described in Chapter 1. Speculate on which of the writers
conclusions were warranted and which were not. In addition to Chapter 1, Chapters 2 and 3
may be helpful in getting you started.
Journals to consider:
1.
2.
3.
4.
Decision Sciences
5.
Financial Management
6.
7.
8.
Journal of Accountancy
9.
10.
11.
12.
Journal of Finance
13.
Management Review
14.
Personnel Journal
15.
16.
Overview
Myrna Wines, director of consumer affairs for MindWriter, Inc., must assess
MindWriters CompleteCare program for servicing laptops.
She sent several well-respected research firms a request for proposal (RFP).
She and her team are interviewing the last of those firms, Henry & Associates.
Myrna wants to find a research supplier from whom she can learn, as well as one she
can trust to do high-quality research.
The last interviewee is Jason Henry, a partner in Henry & Associates who comes
highly recommended.
After viewing his presentation and conferring with her team, Henry & Associates is
chosen to conduct the required research.
Listening
Discussing
Measuring
Scaling
Project design
Sample
Managers use this information to guide business decisions and reduce risk.
Decision scenarios:
Youre the head of the states department of transportation. You must determine
which roads and bridges will be resurfaced next year. You usually look at the
roads and bridges with the most traffic, in combination with those representing
the biggest economic disaster if closed. However, these are often located in the
most affluent regions of the state. Because your decision has numerous
operational, financial, and public relations ramifications, your manager suggests
using business research to assist with your decision making. Should you authorize
the research?
Decision scenarios and decision makers can be found in every type of organization,
whether for profit, non-profit, or public.
Decision makers rely on information to make more efficient and effective use of
their budgets.
At no other time in history has so much attention been placed on measuring and
enhancing return on investment (ROI).
At a basic level, measuring ROI means calculating the financial return for all
expenditures.
Over the past dozen years, technology has improved our measuring and tracking
capabilities, while managers simultaneously realized their need for a better
understanding of employee, stockholder, and customer behavior in order to meet
goals.
Although business research helps managers choose better strategies, the cost of
such research is being scrutinized for its contribution to ROI.
Goals
Even very different types of businesses have similar types of goals, which are related
to such things as:
Sales (membership)
Market share
Return on investment
Profitability
Customer acquisition
Customer satisfaction
Employee productivity
Machine efficiency
Decision Support
Each exchange, along with the activities required to complete it, generates data.
If organized for retrieval, these data constitute a decision support system (DSS).
It typically includes connections to the outside Internet, but its primary purpose is
to share company information and resources among internal audiences.
An extranet is a private network that uses Internet protocols and the public
telecommunication system to share an organizations information, data, or operations
with external suppliers, vendors, or customers.
Both intranets and extranets can allow access to proprietary relational databases.
Sophisticated managers have developed DSSs where data can be accessed in real
time.
Business Intelligence
Strategy
It costs less to retain a customer than to capture a new one, so businesses place a high
value on keeping customers buying.
Strategy is defined as the general approach an organization will follow to achieve its
goals.
The discovery of opportunities and problems, and the resulting strategies, often
result from a combination of business research and BIS.
Tactics
Not all organizations use business research to help make planning decisions.
Increasingly, however, the successful ones do.
In the top tier, organizations see research as the first step in any venture.
They use creative combinations of research techniques to gain insights that
will help them make better decisions.
They may partner with outside research suppliers.
Every decision is guided by business research.
There is generally enterprise-wide access to research data and findings.
Decision makers turn to business research when they perceive the risk of a
particular strategy or tactic to be too great to proceed without it.
They often choose the methodology before fully assessing its appropriateness to
the problem at hand.
In the base tier, managers primarily use instinct, experience, and intuition to facilitate
their decisions.
Large firms that occupy this tier are often influenced by culture; smaller
companies because they think formalized research is too expensive to employ.
Exhibit 1-4 provides an overview of the suppliers within the research industry.
Firms that rely on research to make decisions are likely to have an internal research
department or an individual who coordinates research initiatives.
The number of firms with internal research departments began to grow in the 1960s.
In the 1970s, researchers were often assigned to a functional area, such as marketing,
and reported to the executive in charge of that area.
The researchers influence at the strategic level was constrained by their role
order takers who reacted to the demand for research projects and reports.
Through the 1990s, the accuracy and actionability of the information provided by
research was thought to be low.
In 2001, the Cambridge Group and ARF sought to redefine the research function in
order to make it more relevant to senior management.
Based on executives feedback, research began to expand into such areas as:
Providing actionable insights
Reducing risk in marketplace actions
Improving return on investment
This evolution is consistent with Philip Kotlers contention that, as costs rise, CEOs
and board members demand greater accountability for decisions and expenditures.
In some ways, the prominence of the DSS and BIS functions has forced the
researcher into an even more subordinate role.
While both information technology management and research are critical, in most
organizations the two functions have little to do with one another.
Research Firms
Full-service researchers include some of the largest research firms, and some of
the smallest.
These firms are often involved in research planning from the moment of
discovery of a dilemma or from the definition of a management question.
Some are capable of working in worldwide venues, while others are limited to one
industry or geographic region.
Custom Researchers
What is implied is that such firms do not assume that a given methodology is
appropriate for each clients research.
The Gallup Organization reinvented itself using the proprietary research model,
moving from public opinion pollster and custom researcher to research-based
consulting firm.
Q12 is a Gallup proprietary methodology that uses 12 questions to measure
customer engagement.
Gallup uses these same questions with all clients, so Q12 serves as a
benchmark diagnostic for its subsequent consulting work.
These questions and the survey instrument are copyrighted to guarantee that
its intellectual property remains protected.
10
Methodology
Process
Industry
Participant group
Geographic region
They may also perform a subset of a methodology specialty, such as:
Offering focus group moderators, but not the focus group facilities
Offering recruitment of focus group participants, but not the facilities or the
moderator
Firms doing observation studies are another subset of specialty researchers.
Firms providing Web page optimization research and Web performance metrics
are an emerging group of methodology specialists. (Yahoo!, NetIQ,
NetConversions)
11
Specialty researchers often assist other research firms with their projects.
A syndicated data provider tracks the change of one or more measures over
time, usually in a given industry.
Nielsen Media Research is well known for its People Meter research that
reveals the viewing habits of television watchers. Data is collected four time
per year during sweep weeks.
Exhibit 1-6 lists some syndicated data providers.
Omnibus Researchers
An omnibus study combines one (or a few) questions from several decision
makers who need information from the same population.
Communication Agencies
Advertising, public relations, sales promotion, and direct marketing agencies are
heavy users of syndicated research data.
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Consultants
All are involved in doing extensive secondary data research for clients.
Some conduct both qualitative (focus groups, expert interviews) and quantitative
studies (surveys) as they seek new opportunities or solutions to their clients
problems.
Trade Associations
13
Good business research has an inherent value only to the extent that it helps
management make better decisions that help achieve organizational goals.
Business research finds its justification in the contribution it makes to the decision
makers task and to the bottom line.
14
What is business research? Why should there be any question about the
definition of research?
Business research, as it is used in this text, is a systematic inquiry that provides
information to guide managerial decisions. More specifically, it is a process of
planning, acquiring, analyzing, and disseminating relevant data, information, and
insights to decision makers in ways that mobilize the organization to take actions that
maximize business performance.
Questions arise when people begin to provide their own definitions of research, which
in some way restrict the meaning of research to specific approaches, topics, or
procedures.
2.
3.
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5.
You are the manager of the retail division of a major corporation. Your firm has
35 stores scattered over four states. Corporate headquarters asks you to conduct
an investigation to determine whether any of these stores should be closed,
expanded, moved, or reduced. Is there a possible conflict between your roles as
researcher and manager?
Student answers will vary. Sample answer:
As a manager in this situation, I would try to review the pertinent information
objectively. However, I might subconsciously favor findings that called for the
continuation and possible expansion of the stores under my control. Or, the findings
might reflect my preconceived thoughts, wishes, or goals. Store moves and closures
would mean possible layoffs and redeployment of colleagues, which might also
hamper my objectivity.
6.
16
You have received a business research report done by a consultant for your firm,
a life insurance company. The study is a survey of customer satisfaction based on
a sample of 600. You are asked to comment on its quality. What will you look
for?
I would ensure that the purpose of the research had been clearly defined; that the
research process had been thoroughly documented and planned; that limitations had
been revealed; that highly ethical standards were applied; that there was adequate
analysis; that the findings were straightforward (unambiguous); that the conclusions
were justified, and that the researchers credentials were stated. Further, I might
evaluate the demographics of the 600. Were they all in the same age range? From the
same region of the country? Buyers of similar insurance products?
8.
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