Research Methodology

Chapter 1
 Definition of Research
• “Search for facts – answer to
questions and solutions to
problems. It is a purposive and
organized inquiry”.
Definition of Business Research

Business research is defined as

the systematic and objective
process of generating
information for solving a
problem or finding solution to a
complex issue (aid in making
business decisions).
 Business Research
• 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.
 Objectives of Business Research

• To extends knowledge
• To discovered new information
• Theory building
• To verify and test existing facts and theory
• To analysis inter-relationships between
variables
• Aims to find solution to current problems
 Types of Research
• Basic Research
– Generating scientific
knowledge for future use
(Common use).
• Applied Research
– Undertaken to solve existing
problem.
 Basic Research
• Attempts to expand the limits
of knowledge.
• Not directly involved in the
solution to a practical
problem.
Basic Research Example
• Is executive success correlated with
high need for achievement?
• Coupons versus rebates as demand
stimulation tactics
• Compensation Systems and Labour
Productivity
• Factors determining share prices
 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 McDonald’s it
should not?
• Should Procter & Gamble add a high-
priced home teeth bleaching kit to its
product line?
– Research showed Crest White strips
would sell well at a retail price of RM44
Basic Differences Between
Basic and Applied Research
• Applied Research • Basic Research
– “what is the problem” – Problem based on the
is an important step in researcher interest to
resolving that problem. expand understanding
– What problems to of the subject
analysis may be – Selection of the
outside the individual problem is totally the
researcher domain choice of the
– Researcher role is researcher
examine analytically – Some value judgment
and a course of action may be made,action is
recommended not recommended
 Research and Business
• Primary objective is to provide
information that improves the
decision-making process of an
organization.
• These information reduce managerial
uncertainty in each stages of
development and implementation of
a strategy.
 The Decision-making Process
Associated with the Development
and Implementation of a Strategy

• Identifying problems and

opportunities
• Diagnosis and assessment
• Selecting and implementing a course
of action
• Evaluating the course of action
 Identifying Problem
• Research may be used as scanning
activity to provide information about what
is occurring within the organization or in
the business environment.
• Example: Analysis the Business
Environment
– Privatization and globalization in the
developing countries
– Fast economic growth in developing countries
– It all leads to demand for Car
Diagnosis and Assessment
• Managers need to gain insight about the
underlying factors causing the situation.
They should know what happened, why
and how.
• Example: Diagnosis the Demand
– What is the expected growth of demand for car
– What is the purchasing power of the people in
the developing country
– Consumers taste and preference
– Competition in the market segment
Selection and Implementation

• Research helps to obtain specific

information that will aid in evaluating the
alternatives and in selecting the best
course of action.
• Example:
– Cost effective model to satisfy the consumers
in the developing country
– Place of production or export
– Choose a place where potential consumers are
more.
 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.
• Example:
– Performance analysis
 Determining When to Conduct
Business Research

• Time constraints
• Availability of data
• Nature of the decision
• Benefits versus costs
 Determining When to Conduct
Business Research
Time Availability of Nature of the Benefits vs.
Constraints Data Decision Costs
Yes
Yes Yes Yes
Is the infor- Does the value
Is sufficient time Is the decision
available before
mation already
of considerable
of the research Conducting
on hand information
a managerial
inadequate
strategic
exceed the cost Business
decision or tactical
must be made?
for making
importance?
of conducting Research
the decision? research?

No No No No

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
Costs
Value •Research
expenditures
•Decreased •Delay of business
uncertainty decision and
•Increased likelihood
possible disclosure
of a correct decision of information to
•Improved business
rivals
performance and •Possible erroneous
resulting higher research results
profits
 Why should a Manager
Know Research?
• Facilitate good decision making
• Become discriminating about research
findings
• Issues of inside versus outside researcher
• To share relevant information with
researcher
• Understand complex issues, variables,
calculate risk, probabilities, etc.
 Internal Researcher
• Advantages:
– Better acceptance from the staff
– Knowledge about the organization
– Would be integral part of implementation and
evaluation of the research recommendations
• Limitations:
– Less fresh ideas
– Power Politics
– May not be valued as experts by staff
 External Researcher
• Advantages:
– Experience from several situations
– Better technical training
Limitations:
Time to understand the organizational system
Cooperation from the staffs is not easy
Not available for evaluation after
implementation
cost