Business Research and Decision Making
Overview The Nature of Decision Making Levels of Decision Making Decision-Making Processes The Role of Research in Decision Making Business Research Defined Business Research and Ethics Role in Decision Making Research and the Global Marketplace Suggested Reading The Manager–Researcher Relationship Plan of the Book The Business Research Process Summary Discussion Questions Notes

978-1-4240-7409-9, Business Research for Decision Making, 6e, Duane Davis - © Cengage Learning



he very essence of managerial action in any modern organization is decision making. Business decision making involves the formulation, evaluation, and selection of alternatives to solve managerial problems. The quality of decisions is usually closely tied to the availability of usable information at the time the decision is made. Business research is a primary means of obtaining usable information for decision making. Thus, this text is concerned with helping managers and potential managers make better decisions by providing them with a framework for the evaluation of business research. Specifically, managers must wade through an ever-increasing amount of data, information sources, and studies that are often confusing and outright conflicting. This state of affairs, coupled with the increased complexity of the decision-making environment, suggests that management in all functional areas must gain a better understanding of the process of obtaining and using information for decision-making responsibilities. Because the size and complexity of management information systems (MIS) and their associated decision support systems (DSS) continue to increase in today’s organizations, managers must monitor the input to such systems. The data for decision making must be of sufficient quality and appropriate type to help solve the problems of the organization. Only by developing an understanding of the role and nature of business research can managers effectively accomplish this task. This introductory chapter provides the framework for examining research’s role in decision making. First, the nature of decision making is examined. The levels of decision making in an organization are identified, and a generalized model of the decision-making process is presented. Business research is defined, and its role in the process is examined. With these topics outlined, the manager–researcher relationship is examined for potential conflicts. Management’s role in the relationship is highlighted. The major components in the manager’s and researcher’s respective spheres are then diagramed. This diagram subsequently provides the framework and the rationale for the plan of the text. The chapter ends by expanding this framework in the context of the business research process, the organizing framework for this text.

Decisions are made by everybody, every day. What do I do today? Should I leave, or should I stay? Some decisions are explicit, and some are implicit. By inaction, you have made a decision. In other words, success largely depends on what you do and do not do. (Of course, a bit of luck in



1 Business Research and Decision Making

978-1-4240-7409-9, Business Research for Decision Making, 6e, Duane Davis - © Cengage Learning

different informational requirements. Each decision has a different degree of complexity. one must continually examine how decisions are made. and the organization seem to change continually. They are characterized by a great amount of uncertainty and are nonroutine in nature. The information needs for strategic decisions are primarily external to the organization and are future-oriented. the individual. Duane Davis . Furthermore. and technical levels. the process.3 Table 1. tactical. this does not mean that one should not attempt to understand decision processes. Strategic decisions at the corporate level include those dealing with such issues as diversification. Furthermore. what information is needed to make the original decision). the process and requirements of the decision-making situation may drastically differ. Quite to the contrary. product or market development. but that also entails a decision.2 Because decisions and decision styles are remarkably diverse. each with a separate problem. the other must decide how much raw material to order from a particular supplier. One manager must make a decision whether or not to enter a foreign market with a new product. Research is one way to make better decisions. The general nature and structure of decision making are well discussed in the literature. the next time each manager needs to make a similar decision.) The necessity of making decisions often seems to be the only constant of managerial action. Levels of Decision Making One approach to decision-making structure in the organization is that which differentiates the strategic. Strategic decisions are those that affect the general direction of the organization. and divestiture. the environment.© Cengage Learning . Strategic decisions are largely unstructured. 6e.1 For example. The study of decision making can lead to better decisions. the immediate decision may be to obtain more information (which requires another decision—i. so an exploration of the general nature and structure of decision making is a proper beginning to the study of business research. In fact. In fact.1 outlines the three major decision levels and their associated attributes. The same decision maker may use different decision styles at different times. there are various information needs within an organization. The Nature of Decision Making 3 978-1-4240-7409-9.e. different decision makers may not use the same decision style to reach a decision for a particular situation..the lottery helps. imagine two managers in an organization. the diversity of decision-making activities in organizations is boundless. the types of information needs in a specific decision situation appear to be related to the levels of decision making in an organization. These two decision makers will most likely follow different routes to arrive at their respective decisions. However. Business Research for Decision Making. and a different time frame. in the context of a complex decisionmaking environment.

Duane Davis . availability of process d. Planning and control activities are both important at this level. payroll. Predictive information (short-term) 4. and credit acceptance or rejection. The information needed to perform this function is primarily descriptive/historical in nature and is usually supplemented with current performance information. although good information of the appropriate 4 CHAPTER 1 Business Research and Decision Making 978-1-4240-7409-9. and other short-term internal assignments. Simulated what-if information 1. promotional mix decisions. Simulated what-if information 1. external information is needed to make decisions at this level. 6e. It is necessary to understand differences in the needs of managers in a given organization because the quality of the decisions they make is directly tied to the information they receive.© Cengage Learning . competitive actions b. if any.1 Levels of Decision Making and Characteristic Attributes Exemplary Types of Information Needed Relative Programmability Planning-Control Organization Levels of Decision Making Strategic Tactical Technical 1. demographic studies 2. Little. Predictive information (long-term trends) 3. Descriptive-historical information 2. personnel assignments. in that they deal more with issues of a considerably shorter time frame. The information needs are descriptive/historical in nature and are more often internal. Although the distinctions among these levels are by no means clear-cut. Performance-current information 3. The final group consists of technical decisions. the classification does serve to highlight important differences in information needs in the modern business organization. External information a. Descriptive-historical information 2. minor resource commitments. Examples of this type of decision making are quality control. customer actions c. Business Research for Decision Making. scheduling.TABLE 1. Tactical decisions have limited programmability because they lack consistent structure in the problem situation. More specifically. transportation. Performance-current information Low Planning—heavy reliance on external information Limited programmability Mixture of planning/ control orientation High Control—heavy reliance on internal information Tactical decisions are concerned with the implementation of the broad strategic decisions just outlined. Examples of tactical decision making are budget allocations. The decisions are highly programmable and are most amenable to mathematical modeling and standardization. Technical decisions are of a routine nature and deal with the control of specific tasks. These decisions are operations-oriented.

most decisions. or will exist. Either way.© Cengage Learning .1 type and quality cannot ensure that the correct decision will be made. the decision process is broken down into a series of interrelated activities that leads to a choice among alternatives. no one universal framework is capable of representing all decision paths. Internal and external environments need to be scanned and assessed. multiple subproblems will require research. In the latter case. Business Research for Decision Making.4 In other words. its availability increases the probability of a better decision. or it can result from extensive monitoring and study of an organization’s operations and customers.5 Figure 1. that needs to be acted upon in the near future. and the subsequent means to obtain information. These activities are defined and interrelated as follows: Problem recognition. and subsequent strategies developed to complete the business plan. opportunities and problems identified.6 Problem recognition can be planned. as in recognizing the need for a comprehensive business plan due in six months. as when a complete marketing audit reveals changing customer preferences. In a Western view of the world (primarily North America and Europe). Instead. Duane Davis .Problem Recognition Information Search Problem Analysis Alternative Evaluation Decision Decision Environment FIGURE 1. 6e. it is a decision situation that has multiple consequences for the decision maker. The Nature of Decision Making 5 978-1-4240-7409-9.1 outlines five major activities that can be identified in these decision situations. Major Activities in the Decision-Making Process Decision-Making Processes Given the complexity of the decision-making task. one must view the process in the context of the decision itself. The process begins when management acknowledges that some situation exists. Problem recognition can be as simple as deciding to introduce a new product or as complex as the need to develop a business plan for an organization. are viewed as a linear and sequential process.

This led to an extensive internal and external information search for further problem clarification. explanations and actual examples will highlight the nature and role of these technologies in business research. Instead.7 Management recognized that a symptom (declining market share) was indicative of some problem. Duane Davis . the company built a comprehensive database so that its customer contact people could make customer service faster and more efficient. National Semiconductor.6 billion company selling semiconductor chips. its purpose here is to collect information pertaining to the particular problem situation identified. 6e. Problem analysis. 6 CHAPTER 1 Business Research and Decision Making 978-1-4240-7409-9. and similar products. National chose to understand its customers more fully. Assumptions and alternative scenarios are generally posed for subsequent problem analysis. the problem is thoroughly analyzed. Subsequent research asked customers what they expected and needed. In other words. Most companies now use a combination of technologically sophisticated search and data collection strategies to help identify and solve their problems. Throughout the rest of this text. the goal of the searching activity is to assimilate the information into a format that is conducive to analysis of the problem at hand. One particularly advantageous research strategy that has helped researchers tremendously is the use of Internet searches of online databases and other secondary information services for problem solving. Although information searching may also occur before problem recognition.Information search. the analysis of information generally reveals the areas of concern and the major factors that affect the problem. Alternative evaluation. In this stage of the decision-making process. so that ultimately a more informed decision could be made in the next stage of the process. The findings were simple: better. as yet unidentified. integrated circuits. The research revealed that 70% of all calls to National Semiconductor left the customer dissatisfied. The information generated at this stage may substantially redefine the problem as it was initially formulated. possible alternative courses of action are enumerated and evaluated according to the criteria set forth by the decision maker. Therefore. was faced with losing its market share in a highly competitive marketplace. Once the relevant search activities are completed and the information is assimilated. a $1. Information search is the second major stage of the decision-making process. For example. National Semiconductor could have chosen to do nothing with the findings of its problem analysis. faster service. alternative evaluation proceeded. The alternatives may be stated either implicitly or explicitly. Here. Business Research for Decision Making. Here. it is indeed one.© Cengage Learning . It should be noted here that even though many managers do not consider inaction to be a decision alternative. For example. Problem analysis may also affect recognition and necessitate the gathering of more information to adequately define the situation.

In the National Semiconductor example. 6e. The final stage in the process is the selection of an alternative to address the problem identified. Duane Davis . processes are neither formal nor sequential. Business Research for Decision Making. these decisions have relatively limited programmability and are therefore more complex than merely technical decisions.Decision. The process amounts to making decisions with uncertain information from a variety of information sources. we will focus in this text on decisions that are of a strategic and tactical nature. The problem situations for strategic and tactical decisions are more complex to analyze and require greater managerial input. Keeping these processes in mind. This decision situation thus creates a dynamic. The decision is presumably the one the decision maker finds most appealing in light of all the information available to him or her. The decisions and outcomes are probabilistic in nature and are characterized by some degree of uncertainty. these models extend the basic process model to recognize factors that prevent a simple progression from one activity to another. Such decision modes are usually found when managers are under extreme time pressure. what equipment will be necessary to create the database.© Cengage Learning . feedback loops. and outside interference. The problems are nonroutine and generate a variety of informational needs. the decision was to build a customer service database to improve its service level to customers.8 Essentially. The social sciences (from which most business research methodologies originally come) tend to take a rather strict view of what is and is not research. open system subject to dead ends. For example. As noted earlier. and whether there are multiple uses for such a database. The decision in turn may create new problem situations that will need to be addressed. THE ROLE OF RESEARCH IN DECISION MAKING Business Research Defined Research is defined by authorities in many different ways. Such decisions are largely of a technical nature. In these decision-making modes. One prominent author defines scientific research as follows: The Role of Research in Decision Making 7 978-1-4240-7409-9. although extremely useful. in highly volatile or uncertain situations. In this process framework. does not incorporate chaotic decision models and other “garbage can” models of decision making. The various activities may be occurring simultaneously or may be so programmed that decisions are made almost instantaneously by computers. relying on current performance and/or historical information such as quality control and customer billing. the decision to build a database necessitates decisions as to what information the database should include. the stages are by no means clearly delineated or static. This process view.

empirical. The applied decision-making orientation of managers in business demands that a wider range of studies and investigations be included under the designation of business research. controlled.9 This definition emphasizes that scientific research is a particular type of critical investigation. First. but rather a specific type of inquiry that requires the researcher to follow a method with specified characteristics to ensure the best results possible. The information needed included a description of the current markets. Business Research and Ethics One topic that is of utmost importance to the study of business research is ethics. controlled. and critical investigation of hypothetical propositions about the presumed relations among phenomena. For example. and critical investigation of phenomena of interest to managerial decision makers.Scientific research is systematic. The requirement regarding “hypothetical propositions about the presumed relations among phenomena” excludes many types of studies that are undertaken in an attempt to better understand problem situations that the decision maker must face. these types of investigations are excluded from the domain of scientific research. empirical. to include the diverse information needs of decision makers. it states that business research is a systematic and critical investigation of empirical phenomena controlled by the researcher. business research is not a random process. Any attempt to enumerate a laundry list of subjects that would fall within the scope of business research would be frivolous. their respective managements needed a wide variety of information that was largely of a descriptive nature. The second issue addressed in the definition is the scope of investigation. Business Research for Decision Making. Under the definition just quoted. given the conditions of the study. when AnheuserBusch was contemplating entering the “soft drink” market with its low-alcohol lemon-lime drink. Here. scientific business research becomes a specialized type of investigation that is characterized by the testing of hypothetical relationships.© Cengage Learning . Duane Davis . studying specific relationships among phenomena. This position is taken out of necessity. Therefore. This definition reflects two important issues. and Coca-Cola was considering expanding into pop wines. Thus. the factors affecting success and failure in the marketplace. and a thorough understanding of consumers’ needs and wants in each product market area. Under this framework. the definition of business research that is utilized in this text is: Business research is systematic. the major competitors. from a managerial viewpoint. The only problem. 6e. Serious abuses of ethics have occurred in business 8 CHAPTER 1 Business Research and Decision Making 978-1-4240-7409-9. in using this definition is that it excludes some types of investigations that may need to be executed from a decision-making perspective. the scope is defined to include any phenomena of interest to managerial decision makers. Research ethics is concerned with the proper conduct of the research process in business inquiry.

The others are through authority. Unethical firms and individuals can be hurt in the marketplace if they get a reputation for unethical actions. Unethical behavior can lead to questionable data. Issues such as privacy. to poor decisions. Chapter 16 deals with the major ethical considerations in business research and presents the rationale for the development of codes of ethics to help guide researchers. This is the most basic reason. the blurring of the line between research and direct and/or relationship marketing. Therefore. as Figure 1.11 The importance of ethics in business research cannot be overstated. However.2 indicates. individuals and organizations will refuse to participate in future research efforts of the firm. This is an The Role of Research in Decision Making 9 978-1-4240-7409-9. This type of information is obtained from credible individuals who have some expertise in the decision being made. it is not the right thing to do. Even though unethical research may not be illegal. In the interest of obtaining the highest quality data possible. potentially damaging ethical challenges are being created because of the explosive growth of technological capabilities in the research arena. intuition. Authority. and experience. one whole chapter in this text is devoted to this issue. New. Business Research for Decision Making. Unethical research can lead to poor-quality data and. In other words. research is only one of four major means of obtaining information.in general and in research in particular. ultimately. Unethical research can affect the image of the firm and management.© Cengage Learning . Ultimately. Duane Davis . Researchers and managers involved in business research should be concerned about ethical issues in conducting research for a number of reasons: Unethical research is morally wrong.10 This state of affairs is disturbing because it affects the quality of decision making for the manager and the rights of individuals and organizations in the research process. one should conduct ethical research. The widespread use and availability of almost instantaneous access to information and two-way communication to customers (both internal and external) is creating a whole new set of ethical challenges for researchers and managers alike. and use policies for technological resources are all significant issues that need to be addressed to protect the sanctity of the firm and the research function. Role in Decision Making The role of business research in decision making is relatively simple: providing the decision maker with relevant and useful information with which to make decisions. 6e. it is not in the long-term interest of the organization or the individual to conduct unethical research.

so as to ensure the best possible information for decision making. This campaign 10 CHAPTER 1 Business Research and Decision Making 978-1-4240-7409-9. including research.© Cengage Learning . This type of information is accepted by the decision maker because it appears to be true. because if the research process is correctly implemented. Experience-based information is drawn from past situations that were similar in nature to the current problem. Duane Davis . This difference is noteworthy. Intuition. 6e. As a result.FIGURE 1. One case in point is the experience AT&T had in copy-testing its “Reach Out” ad campaign. The major difference between the three other means of obtaining information and business research is the purposeful and systematic nature of the latter. in that past observations form the basis for it. Each of the four methods. Research is specifically designed to answer managerial problems within a systematic and controlled framework.12 An attitude survey was used to discover that light users were overestimating the costs of long-distance calls by as much as 50%. Business Research for Decision Making. The information is empirically based.” focusing on the economy of making calls in off-peak hours. Intuition tends to be described as “gut feeling” and “management’s sixth sense.” Many managerial decisions appear to be made from such quick flashes of insight. The information does not necessarily agree with established facts. which was designed to increase long-distance calling among light users. AT&T developed an advertising campaign called “Cost of Visit. Some methods are used exclusively on some decisions and only partly on others. The results of properly conducted research can be profitable indeed. plays an important role in the overall decision-making process. The third major means of gaining information is from experience. but they all contribute to the overall effectiveness of managerial decision making. Experience. the ultimate result should be more dependable information on which the decision maker can act.2 Four Major Methods of Obtaining Information in the Decision-Making Process Intuition Authority Decision-Making Process Experience Research extremely important source of information in business organizations because the searching time for information can be drastically reduced.

It seems that advances in information technology have speeded up the integration of global markets and competition.16 Research and the Global Marketplace Global business opportunities are expanding at an ever-increasing rate. Economic integration efforts such as the European Union (EU). the company estimated that the new ad copy could generate additional revenue of nearly $100 million over a five-year period at no additional cost to AT&T.© Cengage Learning . making it easier and more cost-effective to use research in the decision-making process.was subsequently tested for effectiveness with an experimental design. On the other hand. cost-efficient. and other durables. IBM’s PC-jr ate $40 million in marketing expenditures. and scientific information doubles every 5 years. Since 1991.13 For example. is creating both the opportunity and need to search for the best possible information before making a decision. and Dupont’s Corfam shoe entry failure cost was in the neighborhood of $90 million. Similarly. New product failures—“flops”—ranging from frozen egg rolls to automobiles. systematic data searching in a timely. Duane Davis . it is now estimated that the world’s fund of information is doubling every 2 to 2-1/2 years. One may ask: What does this have to do with business research? Plenty. coupled with the unprecedented acceptance and dissemination of new technology. the application of research methods in an international setting is extremely relevant to this text. or research that is not effectively integrated into the decision-making process. From this research. RCA’s Videodisc lost $500 million. Business Research for Decision Making. or that microcomputer systems are currently over doubling their processing power every year. The Role of Research in Decision Making 11 978-1-4240-7409-9. The explosive growth of the information industry. Latin American Integration Association (LAIA). Increased research activities will be necessary to make more informed decisions on little-known foreign markets. Consider some key facts. 6e. and the Association of Southeast Asian Nations (ASEAN) have created large multinational markets. Therefore. With this type of explosive growth. technological advancements continue to make systematic research a viable alternative to the other means of obtaining information. buildings.15 This radical change in information technology is providing the impetus for reengineering the research function. and comprehensive manner will be essential for organizations to remain competitive in a highly volatile and complex environment. are all too common. businesses have spent more on computer and communications hardware than on capital investments such as factories. Conducting research might not have prevented these failures.14 It is hard to believe that just over 30 years ago there was no microcomputer. The further integration of these alliances into a world trading association seems inevitable in the future. inadequate research. open to astute business operations that are willing to take advantage of these opportunities. North American Free Trade Agreement (NAFTA). In addition. can have drastic consequences for the firm. but it could have decreased the probability of failure.

labor regulations. different distributive structures. the nature of the competition broadens. political system. international documentation. 6e. foreign currencies.© Cengage Learning . New environmental factors. the manager–researcher interface is examined next. culture. We must learn and adjust to a huge number of factors. Therefore. Information from both international and domestic research is utilized in all levels and areas of the decision-making process.Although the techniques of international research are the same in domestic research. and structural differences in the way business is done.. Researchers and managers must recognize the differences inherent in international research.18 These conflicts arise regardless of whether the manager and researcher are the same person or specialized roles exist (i. Because of these differences. It is important for the 12 CHAPTER 1 Business Research and Decision Making 978-1-4240-7409-9. to identify the major components in the relationship. For the research to have maximum value. religion. The research design and implementation problems can become mind-boggling. When a company enters the international arena. For this reason. The differences between domestic and international research center on four major factors:17 New parameters. we must adapt and modify our research paradigms so as to obtain the best-quality information possible. there must be a mutual understanding between the user (the manager) and the doer (the researcher) of the research. then make the necessary adjustments in methodology and implementation to ensure the highest quality information for decision making. THE MANAGER–RESEARCHER RELATIONSHIP The manager–researcher relationship is characterized by a number of potential conflicts. international examples and issues are integrated throughout the text to acquaint the reader with the pitfalls and nuances of conducting research in international settings. Such factors as language. These parameters include duties. including a whole host of new firms. Broader competition. and level of technology all affect the design and implementation of research. Business Research for Decision Making.e. a professional manager and a professional researcher). Number of factors involved. Think of the possible combinations of factors involved in a ten-country study. Research can be useful in such diverse activities as planning for the financial needs of the organization in the future or testing the effectiveness of alternative qualitycontrol mechanisms on an assembly line. Duane Davis . The business and task environments are often very different. the environment in which they are applied is very different.

Managers desire nontechnical presentations of findings. the researcher’s sphere of activities can be described as an analytical world. Essentially..© Cengage Learning . and personnel. Business Research for Decision Making. and ultimate value.3 manager to fully understand these conflicts so that communication between the two parties can be maximized. Overall.19 Figure 1. Researchers want to present the findings of the study with qualifications and statistical evidence to support the conclusions. Managers want quick. 6e. with few statistics and qualifiers on the conclusions in the study. Researchers desire readily researchable questions that can be studied with sound methodologies and adequate resources in terms of time. and accurate information to solve managerial problems.3 illustrates the different worlds in which the manager and researcher operate. low-cost. money. of the studies Manager’s and Researcher’s Decision Worlds The Manager–Researcher Relationship 13 978-1-4240-7409-9. The researcher’s world uses a specialized vocabulary that is largely foreign to the practicing manager. Researcher s Analytical World Research Processes FIGURE 1. These two scenarios point out some of the potential major conflicts in the manager–researcher interface. The information should be as definitive as possible to allow quick decisions with minimal uncertainty. managers are faced with a number of problems that they must solve through specific decisions. timely. On the other hand. managers want answers to management problems as quickly and inexpensively as humanly possible. The manager’s world can be characterized as a problematic decision world. Manager s Problematic Decision World Management Problems requiring Decisions Research Proposal – Discuss managerial problems for conversion to research questions – Identify scope and agree on output of research Communication Research Report – Review output of research to answer original managerial problem – Examine research to ensure research problem has been addressed Research Questions . Duane Davis . Adequate communication is essential to keep these conflicts from affecting the results.

6e. which describes the method. PLAN OF THE BOOK This text takes an applied user orientation (applying concepts to aid business decision making) as the primary organizing mechanism for the chapters that follow. the approach recognizes the two separate worlds in which the manager and researcher operate. researchers. Here. research is positioned as an important component of knowledge 14 CHAPTER 1 Business Research and Decision Making 978-1-4240-7409-9. President Robert A. the manager is wholly dependent on the researcher for the generation of useful decision-making data. Figure 1. If this understanding is lacking. and conclusions drawn from the investigation. The informal discussions and other communications that immediately precede and follow these documents are critical in ensuring that the research has relevance to the original managerial problem stated. Lutz wanted a more complete integration of the new product development function because the process took too long and was not producing results the company could act on. Chapter 2 outlines business research’s relationship with the growing fields of information systems and knowledge management in the 21st century organization.undertaken. results. and stylists communicated regularly and frequently with each other. The manager has a dual responsibility: to accurately specify the problem of interest. The two main formal means of communication between the manager and the researcher are the research proposal. Business Research for Decision Making. and the research report. and mechanisms of communication that managers need to understand so as to direct the research process for decision-making purposes. Subsequent chapters will more specifically evaluate the primary concepts.4 outlines the plan of the book. techniques. The worth of the study cannot be evaluated unless the manager has basic research competency. which outlines the problem under study and the plan of action to be undertaken. managers must constantly evaluate research they have not requested but that may be relevant to the situation at hand. Therefore. Management’s role in the research relationship is difficult.20 The process was revamped so that crossfunctional teams of engineers. marketers. First. The focus of the text will be on the manager’s role as specifier and evaluator of research. When sales of Chrysler automobiles lagged in 1989. As the diagram illustrates. Duane Davis . Similarly. This text is designed to provide the user of research with this basic competency. This approach reduced product development time by 40% and led to the development of the successful LH line of sedans and the new Dodge Ram trucks.© Cengage Learning . then subsequently evaluate the research output to make sure that it is of the proper type and of sufficient quality to make decisions. The chapters are presented in the following fashion. the manager must have at least a rudimentary understanding of the research process and the basic concepts and methodologies used by the researcher.

7. Researcher s Analytical World Part 4 Primary Data Collection (PDC) (Chapters 10 and 11) management and a necessary tool for contemporary managers in an increasingly interconnected environment.FIGURE 1. 8. following the sequence of the business research process. Chapter 3 discusses the scientific method and the major concepts that must be understood before the manager can begin to enter the researcher’s analytical world. recording. The Business Research Process The business research process is a set of operations that aids the researcher in the systematic gathering. This chapter sets the foundation and provides the building blocks on which the two parties can begin.© Cengage Learning . Manager s Problematic Decision World Plan of the Book Business outlook? Production methods? Personnel selection? Financial outlook? Industry conditions? Strategic options? Customer analysis? Product offering? Competitive actions? Part 2 Beginning the Research Process (Chapters 4 and 5) Part 6 Research Reporting and Evaluation (Chapters 16 and 17) Communication Between Manager and Researcher Part 3 Research Design (Chapters 6. Next. Business Research for Decision Making. and analysis of data to help solve decisionmaking problems. and 9) Part 5 Analytical Procedures (Chapters 12. and 15) . Duane Davis . 14. 6e. 13. Given this groundwork.4 . The process provides the researcher with a somewhat Plan of the Book 15 978-1-4240-7409-9. the remainder of the text is presented in five major parts.

4. the manager and researcher agree on what is to be accomplished by the research undertaken. Duane Davis . The value of the process is that it forces critical thinking about important issues in the design and implementation of any research project. A research proposal is a formalized offer or bid for research. Although secondary 16 CHAPTER 1 Business Research and Decision Making 978-1-4240-7409-9. Both researchers could use the general research process framework to help them obtain information for the problem at hand. it is not a static. Following the basic research process allows the researcher to create a structure and plan to solve the problem selected for study. Once the structure of the study is set. it is impossible to identify one means to solve all the questions that need to be addressed. the text is organized into five parts. specifying the problem to be studied and the plan of action to solve the stated problem. The research process should be viewed as a fluid guide to help structure research projects to answer management’s questions. Part 4: Data collection. The major topics covered in this section of the text are the fundamentals of design (Chapter 6). Design is largely concerned with controlling potential sources of error in the study.5 presents an expanded outline of the business research process. and the ultimate development of the research proposal. which is used to understand the current problem situation. The preliminary steps in the research process are considered in two chapters. Different researchers may follow the general steps in the research process and use totally different methods and techniques to solve the same problem. the researcher moves on to actual data collection. 6e. Essentially. a researcher attempting to study CEO attitudes toward environmental scanning and a researcher studying why a particular product failed have entirely different research objectives and purposes. For example. Chapter 5 then deals with the subsequent topics of problem identification and formulation. Part 3: Research design. neither researcher would probably follow the exact same procedure. Figure 1.orderly means to investigate problems. linear process. each composed of at least two chapters: Part 2: Beginning the research process. scaling and instrument design (Chapter 8). Here. and sampling (Chapter 9). the assessment of the value of the research information.© Cengage Learning . However. highly structured. the Internet and other online alternatives are examined as essential in the researcher’s arsenal of tools. through it. the set of operations that make up the research process are general areas of concern in most undertakings. the foundations of measurement (Chapter 7). Chapter 4 presents the topic of secondary data searching. Given the diversity of business problems. further developing the plan of the book as shown in Figure 1. and throughout the text. The research proposal directs the researcher’s efforts. The research design is the structure of the research project to solve a particular problem. Rather. Business Research for Decision Making. Like the decision processes discussed earlier.

Business Research for Decision Making. 6e. Part 3 Determination of Research Design • Fundamentals of Design • Designing Measurement Instruments • Sampling Part 4 Determination of Data Collection Procedure • Determine Primary Data Collection Method • Issues in Quantitative and Qualitative Methods Part 5 Determination of Analytical Procedures • Data Preparation • Planning for Data Analysis • Statistical Analysis Part 6 Research Reporting and Evaluation • Ethical Issues • Research Reporting • Research Evaluation FIGURE 1.Part 2 Beginning the Research Process • Secondary Data Searching • Problem Identification and Formulation • Assessment of the Value of Research Information If Value < Cost If Value > Cost • Develop Research Proposal Stop! Do Not Do Research.5 An Expanded Look at the Business Research Process Plan of the Book 17 978-1-4240-7409-9. Duane Davis .© Cengage Learning .

Business Research for Decision Making. Chapter 16 deals with critical ethical issues in business research. in that later stages may affect or modify decisions made in earlier steps. Duane Davis . the process is highly interdependent. The report conveys the findings of the study and the means used to obtain those findings. In reality. Chapter 14 presents a discussion of basic linear models. Chapter 17 deals with the research report and its evaluation.data is also utilized here. Chapter 15 surveys multivariate analysis. this section focuses on primary data collection (PDC) procedures. For example. Chapter 11 examines observation. it limits the choice of analytical techniques. The major areas of concern in this stage are the preparation of data for analysis and the selection of an appropriate analytical technique to summarize the data collected to solve the problem. if the researcher chooses a measurement instrument with specified properties.© Cengage Learning . the process is recursive. Chapter 13 presents basic analytical frameworks used in business research. decisions made in early stages of the research process constrain the later stages.5 might seem to suggest that each step is a discrete phenomenon with a highly specified progression. The chapter and text end with an examination of the major managerial considerations in research reporting. This chapter is placed in this section because it is particularly important to evaluation and subsequent design of future research projects. but this is a simplification. These are the tools and techniques researchers use to summarize data and reach conclusions. The interdependency and recursiveness are represented in the diagram by the solid and dashed arrows. For example. in-depth interviews. Similarly. then focuses on PDC using survey instruments more specifically. As we progress through the rest of the research process. 18 CHAPTER 1 Business Research and Decision Making 978-1-4240-7409-9. you should be aware of the implications of making a particular decision about the use of a technique in any of the stages. The research report is the formal communication device between the manager and the researcher. 6e. Chapter 12 deals with the issues of basic data preparation and planning for data analysis. and other qualitative techniques as PDC methods. with brief discussions of advanced multivariate statistical procedures. This type of thinking is necessary to ensure that the originally stated research problem is solved in the best way possible. He or she then needs to find a design in which the cost of data collection is more in line with the resources available for the project. Part 6: Research reporting and evaluation. The diagram in Figure 1. Part 5: Analytical procedures. an investigator contemplating a particular research design may discover that the data collection requirements are too costly. Finally. given today’s fast-changing global marketplace. The final section of the text is concerned with communication. focusing on the topics of analysis of variance and regression. Chapter 10 deals with the nature of primary data collection in general.

The role of the manager in the research process is as both a specifier and an evaluator of research projects. DISCUSSION QUESTIONS 1. What distinguishes business research from other types of research endeavors? What are the similarities in these types of research? 3. What environmental factors have contributed to the growing importance of research in the contemporary business setting? 4. What is business research? What is the role of business research in the decision-making process? 2. and technical) and the process by which decisions are made. managers must have a basic research competence so that they can adequately judge the worth of the specific research proposals and findings that are presented to them. empirical. 6e. The chapter begins with the proposition that the essence of managerial action is decision making.© Cengage Learning . with an applied user orientation. What makes business research so different from these other information sources? 5. and critical investigation of phenomena of interest to managerial decision makers. 7. tactical. Business research is defined as systematic. The manager–researcher relationship is examined with attention to the conflicts that are inherent in the manager–researcher interface. controlled. Decision making in business organizations is examined in terms of both the level (strategic. Duane Davis . What are the major levels of decision making within any organization? What role does research play in each of these levels? 6. Business research is the only means of obtaining information that is designed to answer managerial problems within a systematic and controlled framework. What are the important activities in the decision-making process? Discuss and evaluate the usefulness of research in each of these activities. Compare and contrast alternative means of obtaining information for decision-making purposes. What are some of the potential conflicts in the manager–researcher relationship? What are some possible means to reduce sources of conflict? 8. the orientation and plan of the book are presented. Finally. The text is managerial in nature. Thus. What role do managers play in the business research relationship? What implications does this role have in terms of the involvement of the manager in the business research process? Discussion Questions 19 978-1-4240-7409-9.SUMMARY This chapter develops the framework for studying business research. The book is organized around the research process as viewed by the practicing manager. Business Research for Decision Making.

“What’s Wrong. See John P. op. A. 2nd ed. cit. cit. Limaye and David A. and Susan Goodman. see Herbert A. 28. 29–46. Strater. For example. and subsequently discussed by G. 6e. pp. 3rd ed. 2. note 1. S. 12–23. cit. 46. 13.” Journal of the American Society for Information Science (May 1993). 20 CHAPTER 1 Business Research and Decision Making 978-1-4240-7409-9. F. F. Business Research for Decision Making. Carol Sanders and Jack W. Gorry and M. Simon.S. Philip Maher. Pradeep. Hogarth. Clemen and Terence Reilly. G. Al Ossip. 10. VA: Reston Publishing. 1977). Anthony. Susan Krafft. and Winston. J. Planning and Control Systems: A Framework for Analysis (Boston: Harvard University Graduate School of Business Administration. Originally outlined by R. What are the forces driving this trend? What are some issues that one must consider when designing and conducting multinational research? 13. Multinational research is becoming increasingly important.9. 14–17. Two very good articles on scanning are J. note 1. 55–70. and S.” Sloan Management Review (Fall 1971). and K. op. Victor. pp. Kerlinger. and Robert T. pp. (New York: Wiley. 5. for example. Preble.” Management International Review (1988). p. R.” Harvard Business Review (November–December 1982). for example. 68–73. 1979). “The Big Merge. 10. and E. 156–167. 194–203. Distinguish between a “user” and “doer” orientation in the study of business research. The New Science of Management Decisions. note 2. 1987). 8. 283–285. “Corporate Espionage: When Market Research Goes Too Far. NJ: Prentice-Hall. op. Foundations of Behavior Research. pp. 1978).” Business Marketing (October 1984).” American Demographics ( June 1991). 7. “What Effective General Managers Really Do. (New York: Holt. 15:1. p.” Records Management Quarterly (October 1993). 44:4. pp. “Cross Cultural Business Communication Research: State of the Art and Hypotheses for the 1990s. Information Systems: Theory and Practice (New York: Wiley. p. Auster and Chun Wei Choo. and Limaye and D. R. 1986).” Academy of Management Review (1990). “Temporal Sequences in Information Acquisition for Decision Making. and A. 2001) for different views on the decision-making process.© Cengage Learning . What focus does a user orientation have that a doer orientation does not? 10. NOTES 1. What is the business research process? Why is the process so important in the conduct of business research? 12. Making Hard Decisions (Pacific Grove. Rinehart. Victor. 1965).” Journal of Advertising Research (October– November 1985). N. See. 40–64. 4–14. op. Reichel.” Journal of Business Communication (Summer 1991). 51ff. pp. “A Framework for Management Information Systems. Morton. 3. Fred N. pp. Information Systems for Strategic Decisions (Reston. pp. note 1. and Walter Shapiro.” Time (25 May 1987). Multinationals in the Late 1980’s. A. Kotter. “Information Needs for Management Decision-Making. R. p. For more thorough discussions of these processes. Judgement and Choice. and J. Compare and contrast the manager’s problematic decision world with the researcher’s analytical world. see Simon. 39. Goodman. 11. Radford. 13–16. 27:4. 60. Two very good articles discussing the diversity of decision making and the associated implications are Mohan R. A. 2nd ed. Goodman. 9. A. 4. 6. 28:3. 277–299. “Ethics—Everyday Choices in Marketing Research. pp. pp. pp. pp. Duane Davis . pp. pp. and G. See. Burch. cit. One of the difficulties of fully comprehending the research process is that no one process can be used to solve all business research problems. “The Environmental Scanning Practices of U. CA: Duxbury. (Englewood Cliffs. Discuss this statement. “Environmental Scanning by CEOs in Two Canadian Industries. Jones. 10–12. Grudnitski.

” Harvard Business Review (May–June 1985). Mayo. Alan Kuritsky. Schwartz. 22.11. relating research methodologies to the management process.” Marketing News (28 February 1994). “Internet Use Policies. 32:1. for example. “Cross Cultural Business Communication Research: State of the Art and Hypotheses for the 1990s. “Frameworks.” Marketing News 14:23. 19. H. An excellent classification scheme is used. p. How to Read Research and Understand It (New York: Macmillan. T. Emily Bassman. and B. 13 October 1993. A. R. (Englewood Cliffs. pp. Bellizzi. Business Research for Decision Making.. 40–42. pp. M. Making Hard Decisions (Pacific Grove.” The Futurist (August– September 1998). The Role of Research in Decision Making Andreason. Robert T. “Global Business Drivers: Aligning Information Technology to Global Business Strategy. “Information Needs for Management Decision-Making.. “Trends and Forecasts for the New Millennium. and D. 2001). 12–23. SUGGESTED READING The Nature of Decision Making Clemen. 143–161. 27:4. pp. 1981). S. pp. 13. Daniel. Goodman. 53–59. S. p. David O. p. Canada. “Backward Marketing Research. 43:10. pp. Stresses that effective research strategies should correspond to the nature and level of management decisions. Techniques and Theory: Contributions of Research Consulting in Social Science. Provides a useful discussion of the nature of decision analysis and provides a rationale for studying the decisionmaking process. 1635–1666. “Recognizing 4 Researcher– Research User Differences Can Be First Step Toward Removing Barriers to Good Research. pp. See Joseph A.” Interfaces (December 1982). Little. “Decision Structuring to Reduce Management-Research Conflicts. C. particularly in Chapter 1. A. For other discussions of this relationship. Richie.” IBM Systems Journal (1993). 12. see Tim Powell. 7th ed. This article suggests an approach in which both managers and researchers can make research more relevant to decision making in an organization. 14. 6. Carter. 15. and Forrest S. For example. See “Flops. Mason. “Sharing Responsibility for E-Commerce and the Privacy Issue. J. pp.” Direct Marketing ( June 1998). A good article to begin a discussion of how research is used and conducted in cross-cultural settings. 28:5. 31–33.© Cengage Learning . Duane Davis . Insightful in its approach and contributions Suggested Reading 21 978-1-4240-7409-9. The integration of software to aid in the process is very insightful. R. pp. note 13. 17. Victor. 11–14. Simon is one of the founding fathers of managerial decision theory. 6e. 2004).” MSU Business Topics (Spring 1981). OH: Southwestern. NJ: Prentice-Hall. and Melissa Everett Nicefaro. 48–52. part 2 (15 May 1981). R. 13–22. A must for future users of research in a business setting.. An interesting discussion of the different roles played in the manager/researcher/consultant relationship. in a speech entitled 16.. 176–182. “Roles of Research in the Management Process. 277–299. (Mason. pp. A. See Michael R. “Telecommunications Technology and Services in the Year 2010. pp. and R. cit. Molitor. Limaye. O. 1977). Leedy. See. International Marketing. Abstracted from remarks by John S. 18. A. Ronkainen. pp. John D. “Information Technology Helps Reengineer Research.” delivered at the AT&T Bell Laboratories Technology Symposium in Toronto. Testing and Execution of a New Marketing Strategy at AT&T Long Lines.” Business Week (16 August 1993). 162. and Terence Reilly. Brent. pp. L. 20. Silk. This article reviews the decision-making process and explores theories relating to the use of information for management decision making. and Alvin J.” Journal of Business Communication (Summer 1991).. The New Science of Management Decisions. 188–189. Jarvenpaa. Op. Graham T. A well-written article highlighting the nature of decision making. 2nd ed. Ives. 82. This article examines cross-cultural communication and decision-making paradigms with implications for research.” Online (September/October 1998). 76–80. 1–7.” The American Behavioral Scientist (August 2000). Simon.” Records Management Quarterly (October 1993). CA: Duxbury. 28:3. Czinkota and Ilkka A. see Paul D. pp.” MSU Business Topics (Summer 1976). The proposed “backward” design helps create more usable research information. The Manager–Researcher Relationship Druckman. “The Development. pp. president of AT&T Bell Laboratories.

Robert F. Uma.” ResearchTechnology Management ( January–February 1994). 2002). and the R&D process had better be flexible enough to handle the unexpected. pp. This article is a personal favorite. if anything can go wrong. 22–26. (New York: John Wiley. 2003). Inadequate and ill-communicated research can and does lead to product failures. Parent. 82. 6e. one can clearly see the linkage in the manager–researcher interface. 76–80. Sekaran. This supplementary text provides a very good how-to approach in understanding the business research process. Marketing Mistakes and Successes. Interesting reading.. 37:1. it will go wrong. The article describes and illustrates the role of each in the accomplishment of the firm’s objectives. “Living with Murphy’s Law. This article discusses the essence of the relationship between corporate planners and marketing research. Duane Davis . and it points out the necessity to plan earlier on in the research endeavor. In other words. “Corporate Planning/Market Research: The Connection. Although research is not the focal point of the article.” Business Week (16 August 1993). 10–13. G. 22 CHAPTER 1 Business Research and Decision Making 978-1-4240-7409-9. The applied nature is its best asset. Plan of the Book Harris. Research Methods for Business: A Skill Building Approach. Business Research for Decision Making. 4th ed.” Managerial Planning (March–April 1985).. pp. Hartley presents a set of cases that specifically deal with marketing mistakes that were made because of miscommunication or mishandling at the manager/researcher interface.“Flops.© Cengage Learning . W. pp. L. (New York: John Wiley. This article deals mainly with avoiding “Murphy’s gifts” in the R&D process. Hartley.. V. 9th ed.

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