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Business Research Methods

William G. Zikmund

Chapter 1: The Role of Business Research

Business Research Defined

Business research is defined as the systematic and objective process of generating information for aid in making business decisions.

Business Research
Research information is neither intuitive nor haphazardly gathered. Literally, research (re-search) -search again Business research must be objective Detached and impersonal rather than biased It facilitates the managerial decision process for all aspects of a business.

I dont know if we Information Reduces Uncertainty should offer on-site child care?

It aint the things we dont know that gets us in trouble. Its the things we know that aint so.
Artemus Ward

Business Research Types

Basic research Applied research

Basic Research
Attempts to expand the limits of knowledge. Not directly involved in the solution to a pragmatic problem.

Basic Research Example

Is executive success correlated with high need for achievement? Are members of highly cohesive work groups more satisfied than members of less cohesive work groups? Do consumers experience cognitive dissonance in low-involvement situations?

"The secret of success is to know something nobody else knows. " Aristotle Onassis

Applied Research
Conducted when a decision must be made about a specific real-life problem

Applied Research Examples

Should McDonalds add Italian pasta dinners to its menu? Business research told McDonalds it should not? Should Procter & Gamble add a high-priced home teeth bleaching kit to its product line? Research showed Crest Whitestrips would sell well at a retail price of $44

Scientific Method
Both applied and basic research employ Scientific Method. The analysis and interpretation of empirical evidence (facts from observation or experimentation) to confirm or disprove prior conceptions.

Decision-making Process
Decisionmaking process associated with the development and implementation of a strategy involves :

Identifying problems and opportunities Diagnosis and assessment Selecting and implementing a course of action Evaluating the course of action

Evaluation Research
Evaluation research is the formal, objective measurement and appraisal of the extent to which a given activity, project, or program has achieved its objectives.

Performance-monitoring Research
Research that regularly provides feedback for evaluation and control Indicates things are or are not going as planned Research may be required to explain why something went wrong

Total Quality Management (TQM)

A business philosophy that embodies the belief that the management process must focus on integrating customer-driven quality throughout the organization.

Stresses continuous improvement of product quality and service. Managers improve durability and enhance features as the product ages. Managers strive to improve delivery and other services to keep their companies competitive

Determining When to Conduct Business Research

Time constraints Availability of data Nature of the decision Benefits versus costs

Availability of Data Benefits Time Constraints Nature of the Decision vs. Costs
Is sufficient time available before a managerial decision must be made?

Determining When to Conduct Business Research

Is the information already on hand inadequate for making the decision?

Is the decision Yes of considerable strategic or tactical importance?

Does the value of the research Yes information exceed the cost of conducting research?

Conducting Business Research





Do Not Conduct Business Research

Value versus Costs

Potential Value of a Business Research Effort Should Exceed Its Estimated Costs

Value Should Exceed Estimated Costs

Decreased certainty Increased likelihood of a correct decision Improved business performance and resulting higher profits Research expenditures Delay of business decision and possible disclosure of information to rivals Possible erroneous research results

Major Topics for Research in Business

General Business Conditions and Corporate Research Financial and Accounting Research Management and Organizational Behavior Research Sales and Marketing Research Information Systems Research Corporate Responsibility Research

Cross-functional Teams
Cross-functional teams are composed of individuals from various organizational departments such as engineering, production, finance, and marketing who share a common purpose.

Business Research in the 21st Century

Increased globalization Growth of the Internet and other information technologies

Global Research
Business Research is increasingly global Market knowledge is essential A.C. Nielsen - more that 67% international business

Global Business Research

General information about country economic conditions and political climate Cultural and consumer factors Market and competitive conditions demand estimation

The Internet Is Transforming Society

Time is collapsing. Distance is no longer an obstacle. Crossing oceans is only a mouse click away. People are connected 24 hours a day, seven days a week. "Instantaneous" has a new meaning.

Internet Research
Seeking facts and figures about an issue Surveys on Web sites

Chapter 3: Theory Building

Theories are nets cast to catch what we call the world: to rationalize, to explain, and to master it. We endeavor to make the mesh ever finer and finer. Karl R. Popper

Two Purposes Of Theory

Prediction Understanding

A coherent set of general propositions used as principles of explanation of the apparent relationships of certain observed phenomena.

Concept (or Construct)

A generalized idea about a class of objects, attributes, occurrences, or processes that has been given a name Building blocks that abstract reality leadership, productivity, and morale gross national product, asset, and inflation

A Ladder Of Abstraction For Concepts

Vegetation Fruit Banana Reality
Increasingly more abstract

Scientific Business Researchers Operate at Two Levels

Abstract level
concepts propositions

Empirical level
variables hypotheses

Definitions of Levels
Abstract level -In theory development, the level of knowledge expressing a concept that exists only as an idea or a quality apart from an object. Empirical level -Level of knowledge reflecting that which is verifiable by experience or observation.

Theory Building A Process Of Increasing Abstraction

Theories Propositions Concepts Observation of objects and events (reality )
Increasingly more abstract

Concepts are Abstractions of Reality

Abstract Level


Empirical Level


Scientific Method
The use of a set of prescribed procedures for establishing and connecting theoretical statements about events and for predicting events yet unknown.

Propositions are statements concerned

with the relationships among concepts.

Proposition at Abstract Level

Concept A

Concept B

Hypothesis at Empirical Level

Dollar bonus for sales volume over quota
Always makes four sales calls a day

A hypothesis is a proposition that is empirically testable. It is an empirical statement concerned with the relationship among variables. A variable is anything that may assume different numerical values.

Theory and Song

A fact without a theory Is like a ship without a sail, Is like a boat without a rudder, Is like a kite without a tail. A fact without a figure is a tragic final act, But one thing worse in this universe Is a theory without a fact.

Deductive Reasoning
The logical process of deriving a conclusion from a known premise or something known to be true.
We know that all managers are human beings. If we also know that John Smith is a manager,

then we can deduce that John Smith is a human being.

Inductive Reasoning
The logical process of establishing a general proposition on the basis of observation of particular facts.
All managers that have ever been seen are human beings; therefore all managers are human beings.

The Scientific Method: An Overview

Assess relevant existing knowledge Formulate concepts & Propositions Statement of Hypotheses

Design research

Acquire empirical data

Analyze & evaluate data

Provide explanationstate new problem