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Chapter-1:

The role of Business


Research

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Business Research Defined
• Business research is the application of the
scientific method in searching for the truth about
business phenomena.
• The process includes:
 idea and theory development
 problem definition
 searching for and collecting information
 analyzing data
 communicating the findings and their implications

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Business Research Defined
• This definition suggests that business research
information is:
 not intuitive or haphazardly gathered
 accurate and objective
 relevant to all aspects of the business
 limited by one’s definition of business
• Not-for-profit organizations and governmental
agencies can use research in much the same
was as managers in for-profit organizations.

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Applied and Basic Business Research
• Applied business research
 conducted to address a specific business decision for
a specific firm or organization.
 Example:
 Should McDonald’s add Italian pasta dinners to its menu?
 Which health insurance plan should a business provide for its
employees?

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Applied and Basic Business Research
• Basic business research (also called pure
research)
 conducted without a specific decision in mind that
usually does not address the needs of a specific
organization.
 Attempts to expand the limits of knowledge in general.
 Not aimed at solving a pragmatic problem.

 Example:
 Do consumers experience cognitive dissonance in low-
involvement situations?
 Does employee tenure with a company influence
productivity?

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The Scientific Method
• Scientific Method
 The way researchers go about using knowledge and
evidence to reach objective conclusions about the
real world.
 The analysis and interpretation of empirical evidence
(facts from observation or experimentation) to confirm
or disprove prior conceptions

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EXHIBIT 1.1 A Summary of the Scientific Method

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Managerial Value of Business Research

• There are only a few business orientations:


 Product-oriented
 Production-oriented
 Marketing-oriented

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EXHIBIT 1.2 Business Orientations

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Managerial Value of Business Research

• The decision-making process associated with


the development and implementation of a
business strategy involves four interrelated
stages:
1. Identifying problems and opportunities
2. Diagnosing and assessing problems or
opportunities
3. Selecting and implementing a course of action
4. Evaluating the course of action

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Evaluating the Course of Actions
• Evaluation Research
 The formal, objective measurement and appraisal of
the extent a given activity, project, or program has
achieved its objectives.
• Performance Monitoring Research
 Research that regularly, sometimes routinely,
provides feedback for evaluation and control of
business activity.

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When is Business Research Needed?
• The determination of the need for research
centers on:
1. Time constraints
2. The availability of data
3. The nature of the decision to be made
4. Benefits versus costs (the value of the research
information in relation to costs)
 Will the payoff or rate of return be worth the investment?
 Will the information improve the quality of the
managerial decision enough to warrant the expenditure?
 Is the expenditure the best use of the available funds?

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EXHIBIT 1.3 Determining When to Conduct Business Research

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Business Research in the 21st Century
• Communication Technologies
 Always “connected”—time, place, and distance are
irrelevant.
 Decreases in information acquisition, storage, access,
and transmission costs.
• Global Business Research
 Business research is increasingly global.
 Must understand the nature of particular markets.
 Cross-validation
 Verify that the empirical findings from one culture also exist
and behave similarly in another culture.

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What Business Research Is Not

• Business Research isn’t information gathering:


 Gathering information from resources such books or magazines isn’t
business research.
 No contribution to new knowledge.

• Business Research isn’t the transportation of facts:


 Merely transporting facts from one resource to another doesn’t
constitute business research.
 No contribution to new knowledge although this might make existing
knowledge more accessible.

© 2016 Cengage Learning India Pvt. Ltd. All rights reserved.