CH01 Research Foundation

Chapter 1
RESEARCH FOUNDATIONS & FUNDAMENTALS
Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-1
Research Thought Leader
“As big data increases, we see a parallel

growth in the need for ‘small data’ to
answer the questions it raises.”
William C. Pink
senior partner
Creative Analytics
Learning Objectives
Understand . . .
How business research and data analytics
complement each other.
The language of professional researchers.
Business Planning Drives
Business Research
Organizational Business
Mission Goals
Business Business
Strategies Tactics
Changes in Business
that Influence Research
New
Information Technological
Research
Overload Connectivity
Perspectives
Computing Shifting
Power & Global
Speed Economics
Factors
Battle for Critical
Analytical Scrutiny of
Talent Business
Government
Intervention
Computing Power and Speed
Lower-cost
Data
Collection
Better
Integration of
Visualization
Data
Tools
Factors
Real-time Powerful
Access Computation
Where Business Collects Information
Transactions
Conversations Observations
Sources
Types of Business Intelligence
Government/
Competitive
Regulatory
Demographic Economic
Business
Intelligence
Technological Cultural/
Social
1-8
Research vs. Analytics
Research Data Analytics

Current-problem Used to understand
focused the past
Collects new data Looks for patterns in
Can infuse new with historical data
historical data Can’t answer “WHY”
Can answer “WHY”
Stages in the Business Research Process
Clarify
Research
Question
Report Design
Sights & the
Findings Research
Analyze
Collect &
&
Prepare
Interpret
Data
Data
The Scientific Method
Direct observation
Clearly defined variables
Clearly defined methods
Empirically testable
Elimination of alternatives
Statistical justification
Self-correcting process
Language of Research
Conceptual
Concepts Constructs
schemes
Operational
Models
definitions
Terms used
in research
Theory Variables
Hypotheses
Language of Research
Clearly conceptualized
concepts & constructs
Success
of
Research Shared understanding
of concepts & constructs
Job Redesign
Constructs
and Concepts
Operational Definitions
How can we define the variable

“class level of students”?
 Freshman  <30 credit hours

 Sophomore  30-50 credit hours
 Junior  60-89 credit hours
 Senior  >90 credit hours
Variable: The Property Studied
Event Act
Variable
Characteristic Trait
Attribute
Types of Variables
Expected to be affected by
Dependent the independent variable
Expected to affect the

Independent independent variable
Synonyms for
Independent and Dependent Variable
Independent Dependent
Variable (IV) Variable (DV)
Predictor Criterion
Presumed cause Presumed effect
Stimulus Response
Predicted from… Predicted to….
Antecedent Consequence
Manipulated Measured outcome
Types of Variables (cont.)
A second independent
Moderating variable; significant affect on
IV-DV relationship
Might affect the IV-DV

Extraneous relationship.
May affect IV-DV relationship

Intervening but can’t be observed.
Relationships Among Variable Types
Moderating Variables (MV)
 The introduction of a four-day week (IV) will lead to

higher productivity (DV), especially among younger
workers (MV)
 The switch to commission from a salary compensation

system (IV) will lead to increased sales (DV) per worker,
especially more experienced workers (MV).
 The loss of mining jobs (IV) leads to acceptance of

higher-risk behaviors to earn a family-supporting income
(DV) – particularly among those with a limited education
(MV).
Intervening Variables (IVV)
 The switch to a commission compensation

system (IV) will lead to higher sales (DV) by
increasing overall compensation (IVV).
 A promotion campaign (IV) will increase savings

activity (DV), especially when free prizes are
offered (MV), but chiefly among smaller savers
(EV-control). The results come from enhancing
the motivation to save (IVV).
Extraneous Variables (EV)
With new customers (EV-control), a switch to

commission from a salary compensation system (IV)
will lead to increased sales productivity (DV) per
worker, especially among younger workers (MV).
Among residents with less than a high school

education (EV-control), the loss of jobs (IV) leads to
high-risk behaviors (DV), especially due to the
proximity a high violence neighborhood (MV).
Hypotheses
Brand Manager Jones (case) has a higher-than-

average achievement motivation (variable).
Generalization
Brand managers in Company Z (cases) have a
higher-than-average achievement motivation
(variable).
Hypothesis Formats
Descriptive Question format

Format Are American cities
American cities are experiencing budget
experiencing budget difficulties due to a
difficulties due to a decline in
decline in manufacturing?
manufacturing.
Types of Hypotheses
The life expectancy of airplane

Descriptive model 707 exceeds 16 years.
An increase in price causes

Causal sales to decrease.
People who eat dessert weigh

Correlational more than those who don’t.
The Role of Hypotheses
Guide the direction of the study
Identify relevant facts
Suggest the most appropriate

research design
Provide framework for organizing

resulting conclusions
Reasoning and Hypotheses
Inductions are an inferential leap

from the evidence presented.
Reasoning and Hypotheses
Deductions are only as good as

the premises on which they are based.
RED
STE
G I
RE
Apply Deductive Reasoning
Develop your
own conclusions
concerning what
will happen next.
Inductive Reasoning
Why didn’t sales increase during our

promotional event?
 Regional retailers did not have sufficient stock
to fill customer requests during the
promotional period
 A strike by employees prevented stock from
arriving in time for promotion to be effective
 A hurricane closed retail outlets in the region
for 10 days during the promotion
Why Didn’t Sales Increase?
Tracy’s Performance
Deductive Reasoning
Inner-city household
interviewing is especially
difficult and expensive
This survey involves

substantial inner-city
household interviewing
The interviewing in this

survey ….?
Checklist for a Strong Hypothesis
Adequate
A
Strong Testable
Hypothesis
Better
than rivals
Theory
Defines systematically integrated

concepts/constructs/hypotheses
Complex, abstract, multiple variables
Develops over time
Used to explain or predict
Theory Example: Product Life Cycle
Sales
Primary
Innovation
Demand
Product
Life
Cycle
Profits Adopters
Model within Research
Visualization of a system or theory
Used to represent or describe
Changes as the theory changes.
Can represent present or future conditions.
Example: PLC Model
Key Terms
 Business research  Model

 Concept  Operational definition
 Conceptual scheme  Reasoning
 Construct  Theory
 Data blending  Variable
 Deduction  Control (CV)
 Hypothesis  Confounding (CFV)
Causal
  Dependent (DV)
 Correlational  Extraneous (EV)
 Descriptive  Independent (IV)
 Relational  Intervening (IVV)
 Induction  Moderating (MV)
Chapter 1
RESEARCH FOUNDATIONS AND FUNDAMENTALS
DISCUSSION OPPORTUNITIES
Snapshot: Analytics Under-Delivers Compared
to its Hype
Data analytics
users represent Analytical Innovators
three levels of
maturity. Analytical Practitioners
Analytically Challenged
Snapshot: Analytics Under-Delivers Compared
to its Hype
Snapshot: Big verses Small Data
“Big Data is all about
analyzing the past, but it
has nothing to do with the
future. Small Data—
seemingly insignificant
observations you identify in
consumers’ homes, is …
the emotional DNA we
leave behind.”
Martin Lindstrom
Snapshot: Big verses Small Data
Danish Toymaker Lego
 Used interviews & and
ethnographic
observations to discover
why sales were declining.
 Insight: Company was
taking away the major
reason children played
with Legos…a sense of
accomplishment.
Snapshot: Research on Cyber Security
Spot threats
Understand vulnerabilities
Spot attack venues
“Companies are Hacktivists

vulnerable from
three types of
bad actors. Not Cyber Criminals
all pose the same
degree of Advanced Persistent
damage.” Threats (APT)
“Bad actors” use trial runs before an attack.”

What bad actors want are…
Passwords
Email addresses
Usernames
Names
Snapshot: Identifying & Defining Constructs
“We’re optimizing
Management advertising and
Problem?
people want
storytelling. People
Constructs?
are ad blocking
Operational because they don’t
Definitions? like what we are
doing.”
Snapshot: Radio Chips vs. Retinal Scans
Which Theory Offers the Best Protection?
Theories are essential

to a researcher’s quest
to explain and predict
phenomena while
creating business
opportunities and
informing public policy.
Snapshot: Radio Chips vs. Retinal Scans
Prevent cattle-born disease with

database of cattle
Track cattle from birth to slaughter
Theory 1: RFID tag with tracking

data in ear-mounted tag
Theory 2: retinal scan with

tracking data in hand held reader
Photo Attributions
Slide Image Attribution

29 Design Pics / Kristy-Anne Glubish
30 (left) walenga/123RF
30 (right) MedicalRF.com
31 CostinT/Getty Images
31 © Image Source, all rights reserved.
32 ©Erik Isakson/Blend Images
36 © George Hammerstein/Corbis/Glow Images
44 © McGraw-Hill
46 © Cr-Management GmbH & Co. KG
47 © Cr-Management GmbH & Co. KG
48 ©solarseven/Shutterstock
50 ©Shutterstock / Marius G
53 craftvision/E+/Getty Images
56 walenga/123RF
Chapter 1
RESEARCH FOUNDATIONS AND FUNDAMENTALS
Researcher actions
 Encounter problems
 State problems
 Propose hypotheses
 Deduce outcomes
 Formulate rival
hypotheses
 Devise and conduct
empirical tests
 Draw conclusions

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Chapter 1

RESEARCH FOUNDATIONS & FUNDAMENTALS

“As big data increases, we see a parallel

Research Data Analytics

Clearly defined variables

Clearly defined methods

How can we define the variable

 Freshman  <30 credit hours

Expected to affect the

Might affect the IV-DV

May affect IV-DV relationship

 The introduction of a four-day week (IV) will lead to

 The switch to commission from a salary compensation

 The loss of mining jobs (IV) leads to acceptance of

 The switch to a commission compensation

 A promotion campaign (IV) will increase savings

With new customers (EV-control), a switch to

Among residents with less than a high school

Brand Manager Jones (case) has a higher-than-

Descriptive Question format

The life expectancy of airplane

An increase in price causes

People who eat dessert weigh

Guide the direction of the study

Identify relevant facts

Suggest the most appropriate

Provide framework for organizing

Inductions are an inferential leap

Deductions are only as good as

Why didn’t sales increase during our

This survey involves

The interviewing in this

Defines systematically integrated

Complex, abstract, multiple variables

Develops over time

Used to explain or predict

Visualization of a system or theory

Used to represent or describe

Changes as the theory changes.

Can represent present or future conditions.

 Business research  Model

Spot attack venues

“Companies are Hacktivists

“Bad actors” use trial runs before an attack.”

Theories are essential

Prevent cattle-born disease with

Track cattle from birth to slaughter

Theory 1: RFID tag with tracking

Theory 2: retinal scan with

Slide Image Attribution

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