Business

Research Methods

William G. Zikmund

Chapter 1:
The Role of Business Research
 Chapter 1:
The Role of Business Research
1. Business Research Defined
2. Business Research Types
3. The Role of Research in Decision-making
Process
4. Determining When to Conduct Business
Research
5. Major Topics for Research in Business
6. Basic Methods of Research
 1. Business Research Defined
•Business research is the systematic and
objective process of generating
information to reduce uncertainty.

•Business research is conducted to

provide valid and reliable answer(s) to
already posed research questions.

•It facilitates the managerial decision

process for all aspects of a business.
 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
 Research Questions “?”
I don’t know
if we
Information should
offer on-site
Reduces child care?

Uncertainty
 Data versus Information
• Data—the raw facts—record measures of
certain phenomena which are necessary to
provide
• Information—facts in a form suitable for
managers to base decisions on.
 Characteristics of Valuable
Information
• Relevance
• Quality
• Timeliness
• Completeness
 2. Business Research Types

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

Applied Research:
• Conducted when a decision must be made about
a specific real-life 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?
 Applied Research Examples
• Should McDonalds add Italian pasta dinners to
its menu?
• Business research told McDonald’s 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
 3. The Role of Research in the
Decision-making Process
Information is vital to conduct a proper
decision process for successfully:
• Identifying problems and opportunities
• Diagnosis and assessment
• Selecting and implementing a course of
action
• Evaluating the course of action
 The Process of Decision Making

• Decision making
– The process through which managers and leaders
identify and resolve problems and capitalize on
opportunities.
• Problem
– A condition that occurs when some aspect of
organizational performance is less than desirable.
• Opportunity
– Any situation that has the potential to provide
additional beneficial outcomes.
Seven Steps in the Decision-Making Process
Identifying opportunities
and diagnosing problems

Identifying objectives

Generating alternatives

Evaluating alternatives

Reaching decisions

Choosing implementation strategies

Monitoring and evaluating

 Step 1: Identifying Opportunities
and Diagnosing Problems
• The clear identification of opportunities or the
diagnosis of problems that require a decision.
• An assessment of opportunities and problems
will only be as accurate as the information on
which it is based.
 Step 2: Identifying Objectives
• Objectives reflect the results the organization wants
to attain. Also called targets, standards or ends.
– The quantity and quality of the desired results should be
specified, for these aspects will ultimately guide the
decision maker in selecting the appropriate course of
action.
– Objectives can be measured on a variety of dimensions
(monetary units, output per hour, % of defects, etc.) and
whether the objectives are long-term versus short-term.
 Step 3: Generating Alternatives

• Once an opportunity has been identified or

a problem diagnosed correctly, a manager
develops various ways to solve the problem
and achieve objectives.
• The alternatives can be standard and
obvious as well as innovative and unique.
 Step 4: Evaluating Alternatives
• Determining the value or adequacy of the alternatives
generated.
• Predetermined decision criteria may be used in the
evaluation process.
– Quality desired
– Anticipated costs
– Benefits
– Uncertainties
– Risks
 Step 5: Reaching Decisions

• Decision making is commonly associated

with making a final choice.
• Although choosing an alternative would
seem to be a straightforward proposition, in
reality the choice is rarely clear-cut.
 Step 6: Choosing Implementation
Strategies
• The bridge between reaching a decision and
evaluating the results.
• The keys to effective implementation are:
– Sensitivity to those who will be affected by the
decision.
– Proper planning and consideration of the
resources necessary to carry out the decision.
Keys to Effective Implementation of Decisions
 Step 7: Monitoring and
Evaluating
• No decision-making process is complete
until the impact of the decision has been
evaluated.
• Managers must observe the impact of the
decision as objectively as possible and take
further corrective action if it becomes
necessary.
4. Determining When to Conduct
Business Research
• Time constraints
• Availability of data
• Nature of the decision
• Benefits versus costs
 When to Conduct Business Research?

Availability Nature of Benefits vs.

Time Constraints of Data the Decision Costs
Is the information Does the value
Is sufficient time Is the decision Conducting
Yes already Yes Yes of the research Yes
available before of considerable
on hand information Business
a managerial strategic
inadequate exceed the cost Research
decision or tactical
for making of conducting
must be made? importance?
the decision? research?

No No No No

Do Not Conduct Business Research

 Value Should Exceed
Estimated Costs
Costs
Value •Research expenditures
•Delay of business
•Decreased certainty
decision and possible
•Increased likelihood of
disclosure of
a correct decision
information to rivals
•Improved business •Possible erroneous
performance and
research results
resulting higher profits
 5. 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
 6. Basic Methods of Research
• Surveys
• Experiments
• Secondary data
• Observation
 Business
Research Methods

William G. Zikmund

Chapter 3:
Theory Building
 Chapter 3:
Theory Building
1. Definition of Theory
2. Levels of Reality
2.1. Constracts
2.2. Propositions
3. Scientific Method
3.1. Deductive Reasoning
3.2. Inductive Reasoning
 1. Definition of Theory
A coherent set of general propositions used as
principles of explanation of the apparent
relationships of certain observed
phenomena.

Two Purposes of Theory:

• Understanding
• Prediction
 Theories
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
 2. Levels of Reality
• Abstract level (concepts & propositions): 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 (variables & hypotheses):

level of knowledge reflecting that which is
verifiable by experience or observation.
 2.1. 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”
 Concepts are Abstractions of
Reality
Abstract CONCEPTS
Level

Empirical OBSERVATION OF OBJECTS

Level AND EVENTS (REALITY)
A Ladder Of Abstraction
For Concepts

Increasingly more abstract

Vegetation

Fruit

Banana

Reality
Theory Building: A Process Of
Increasing Abstraction

Increasingly more abstract

Theories

Propositions

Concepts

Observation of objects
and events (reality )
 2.2. Propositions
• Propositions are statements concerned with
the relationships among concepts.

• 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.
 Proposition at Abstract Level

Concept A Concept B
(Reinforcement) (Habits)

Hypothesis at Empirical Level

Dollar bonus for

sales volume Always makes
over quota four sales calls
a day
 3. Scientific Method
The use of a set of prescribed procedures for
establishing and connecting theoretical
statements about events and for predicting
events yet unknown.
 Empirical Evidence help us predict future reality through
abstract concepts

1–39
© 2002 Southwestern College Publishing. All rights reserved.
 3.1. 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.
 3.2. 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 Formulate Statement

Design
relevant concepts & of
research
existing Propositions Hypotheses
knowledge

Acquire Analyze & Provide

empirical evaluate explanation-
data data state new
problem
 Business
Research Methods

William G. Zikmund

Chapter 4:
The Business Research Process
 Chapter 4:
The Business Research Process
1.Information and Decision Making
2. Types of Research
2.1. Exploratory
2.2. Descriptive
2.3. Causal
3. Stages of the Research Process
1.Information and Decision Making

The key to decision making is:

• to recognize the nature of the
problem/opportunity,
• to identify what type of information is needed,
• and how much information is available.

Information reduces the level of certainty in

decision making
Levels of Certainty in Decision Making

1.Certainty:

Necessary information is perfectly available,

which is something rare.
Under certainty, the exact nature of the
problem/opportunity is clear,
Objectives to be achieved by an effective
decision are set.
Certainty:

Necessary information to develop

alternatives and select the best solution
among them is already present

Therefore, there is no need to make research

for understanding the situation and
making prediction.
2. Uncertainty:

Necessary information is somewhat

available, which is something usual.
Under uncertainty, the exact nature of the
problem/opportunity is clear,
Objectives to be achieved by an effective
decision are set.
Uncertainty:

However, necessary information to develop

alternatives and select the best solution
among them is incomplete.

Therefore, research is needed to enlarge

our incomplete understanding of the
situation and to be able to make better
predictions than managerial guesses.
3. Ambiguity:

Almost no information is available, which is

something rare.
Under ambiguity, the exact nature of the
problem/opportunity is not clear,
Objectives to be achieved by an effective
decision are not set yet.
Ambiguity:

Necessary information to develop

alternatives and select the best solution
among them is incomplete.

Therefore, research is extremely needed to

enlarge our understanding and to be able
to make predictions.
 2. Types of Research

• Exploratory
• Descriptive
• Causal
Uncertainty Influences the Type of Research

COMPLETE ABSOLUTE
CERTAINTY UNCERTAINTY AMBIGUITY

NO RESEARCH CAUSAL DESCRIPTIVE EXPLORATORY

AT ALL RESEARCH RESEARCH RESEARCH
 Degree of Problem Definition
Exploratory Research Descriptive Research Causal Research
(Unaware of Problem)(Aware of Problem) (Problem Clearly Defined)

“Our sales are declining and “What kind of people are buying “Will buyers purchase more of
possible situation

we don’t know why.”
“Would people be interested
in our new product idea?”
our product? Who buys our our products in a new package?
competitor’s product?”
“Which of two advertising
“What features do buyers prefer campaigns is more effective?”
in our product?”
2.1. Exploratory Research

Secondary data

Experience survey

Pilot studies

55
 Exploratory Research
• Initial research conducted to clarify and
define the nature of a problem
• Does not provide conclusive evidence
• Subsequent research expected
 2.2. Descriptive Research
• Describes characteristics of a population or
phenomenon
• Some understanding of the nature of the
problem
I keep six honest serving men, (they taught me
all I knew), their names are
what, and why, and when, and how,
and where and who.”
--Rudyard Kipling

58
 2.3. Causal Research
• Conducted to identify cause and effect
relationships
 Identifying Causality
• A causal relationship is impossible to prove.
• Evidence of causality:
– 1. The appropriate causal order of events
– 2. Concomitant variation--two phenomena
vary together
– 3. An absence of alternative plausible
explanations
3. Stages of the Research Process
Problem Discovery Discovery and
and Definition Definition

Research and so on
Design Conclusions and
Report

Sampling
Data Processing
and Analysis
Data
Gathering
Problem Discovery Problem Selection of
and Definition discovery exploratory research
technique
Sampling

Selection of
exploratory research
technique Probability Nonprobability

Secondary
Experience Pilot Case Collection of
(historical) Data
survey study study data
data Gathering
(fieldwork)

Data
Editing and
Problem definition Processing
coding
(statement of and
Analysis data
research objectives)

Data
Selection of processing
Research Design basic research
method Conclusions
Interpretation
and Report
of
findings
Experiment Survey
Secondary
Laboratory Field Interview Questionnaire Observation
Data Study Report
The Business Research Process

Problem Discovery Selection of Sample

Design

Exploratory Collection of the

Research Data

Selection of the
Basic Research
Method
The Research Process (cont.)

Editing and Coding Report

Data Processing

Interpretation of the
Findings
“The formulation of the problem
is often more essential than its
solution”

Albert Einstein
 Business
Research Methods

William G. Zikmund

Chapter 5:
Ethical Issues in Business Research
 Chapter 5:
Ethical Issues in Business Research
1. Definition of Ethics
2. Rights and Obligations of the Respondent
3. Rights and Obligations of the Researcher
4. Rights and Obligations of the Client (User)
5. Types of Ethical Misconduct in Research
 1. Definition of Ethics

• Ethics :The established customs, morals, and fundamental

human relationships that exist throughout the world.

• Ethical Behavior: Behavior that is morally accepted as

good or right as opposed to bad or wrong.
 Research Ethics
• General ethical rules apply also to the
researchers.

• If a society deems dishonesty to be

unethical, then this means that any
researcher who behaves dishonestly in the
research process is acting unethically.
 2. Rights and Obligations of the
Respondent

• The obligation to be truthful

• Privacy
• Deception
• The right to be informed
 3. Rights and Obligations of the
Researcher
• The purpose of research is research
• Objectivity
• Misrepresenting research
• Protect the right to confidentiality of both
subjects and clients
• Dissemination of faulty conclusions
• Advocacy research
 4. Rights and Obligations of the
Client Sponsor (User)
• Ethics between buyer and seller
• An open relationship with research
suppliers
• An open relationship with interested parties
• Privacy
• Commitment to research
• Pseudo-pilot studies
5. Types of Ethical Misconduct in Research

(see also www.chem.wayne.edu/information/ethics_presentation.pdf)

• Falsification: changing data
• Fabrication: making up data
• Plagiarism: using words or ideas without proper
attribution
• Duplication: writing exactly the same parts in different
publications
• Slicing: using the results of the same research project in
more than one publication
They should be assumed as unethical as lying, cheating,
copying, etc.
“Practice is the best of all
instructors.”

Publius Syrus