The Role of Business Research/ Introduction05.01.15

N.P. SinghProfessorManagement Development InstituteMehrauli Road, Sukhrali - Gurgaon -122007-2

It is the systematic and objective process of generating information for aiding business decisions.

Business Research

Business Research- Point Research information is neither

intuitive nor haphazardly gathered. Business research must be objective Detached and impersonal rather

than biased It facilitates the managerial decision

process for all aspects of a business.

Business Research

Information Reduces Uncertainty

I don’t knowif we

shouldoffer on-sitechild care?

Categories of Business Research Classification-I

Basic Research Applied Research

Classification-II Exploratory Research Descriptive Research Causal Research

Basic research

Applied research

Business Research Types

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

pragmatic problem. In Science

The main motivation is to expand man's knowledge, not to create or invent something.

There is no obvious commercial value to the discoveries that result from basic research.

Examples:▪ How did the universe begin?▪ What are protons, neutrons, and electrons composed of?▪ How do slime molds reproduce?▪ What is the specific genetic code of the fruit fly?

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 Conducted when a decision must be

made about a specific real-life problem. In Science

The goal of the applied scientist is to improve the human condition.▪ Improve agricultural crop production▪ Treat or cure a specific disease▪ Improve the energy efficiency of homes, offices, or

modes of transportation

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.

More Examples

A researcher investigates whether different in a manger’s brain (e.g. right versus left hemisphere) are active during different kinds of managerial decision-making.

Basic research

More Examples

A researcher investigates consumers’ attitudes toward a prototype of an innovative type of product, a home Cleaning kit for use on clothes that require dry cleaning

Applied research

More Examples-3

A researcher investigates 5 personality traits to see if they can explain the purchasing behavior of automobile buyers.

Basic research

More Examples-4

A new technology that nullifies the need to refrigerate fish has been invented. Heat processing and the use of flexible pouches for storage helps retain the freshness of fish and frozen food for three years. A researcher investigates how this new technology will impact the market for fish in India.

Applied research

More Examples-5

A researcher working for a candy company has children evaluate concepts and prototypes for new candies. The researchers ask children to taste the products and rate them. Sometimes, the candy company develops unique items that taste good and researchers ask children to come up with a concept or a name the product.

Applied research

More Examples-6

A researcher working investigates whether introducing a “subbrand” at new-car dealerships, identified by an AutoNation USA logo below the dealership name, is an effective basic strategy that can be applied to all its dealerships.

Applied research

Exploratory/ Descriptive/causal ResearchExploratory Research: Design in which the

major emphasis is on gaining ideas and insights.

Descriptive Research: Research design in which the major emphasis is on determining the frequency with which something occurs or the extent to which two variables covary.

Causal Research: Research design in which the major emphasis is on determining cause-and-effect relationships.

Example: The popular crime investigation television shows (e.g.,

CSI: Crime Scene Investigation) provide a fairly good illustration of the three types of research design. These shows usually begin with a crime that must be

investigated (an unplanned change has occurred in the marketplace). The first step is to search for clues that can help establish what has happened (exploratory research- Qualitative data based Research ).

The clues uncovered in the exploratory phase of the investigation often point toward a particular hypothesis or explanation of the events that occurred, and investigators begin to focus their efforts in this direction, conducting interviews with witnesses and suspects (descriptive research).

Finally, a trial is held to determine whether the evidence is sufficient to convict a suspect of the crime (causal research). (Quantitative data based research)

Relationships among Research Designs

Relationships between exploratory and descriptive research

For example, if sales for a particular line of vehicles dropped during the latest quarter, as a researcher you might use exploratory research to provide insights about what caused the decrease in revenue.

Suppose that you conducted interviews with potential car buyers and noticed that they seemed to be more excited about the new styles of other car brands than they were about the brand in question.

This might lead to the hypothesis that style preferences had changed, resulting in lower sales.

You can’t really confirm or reject the hypothesis with exploratory research, though. For this purpose you need to conduct exploratory research.

Example of Exploratory Research Years ago, before the advent of CAT

scanners and other noninvasive medical diagnostic procedures, doctors who were stumped about a patient’s symptoms might recommend “exploratory surgery.”

With little to go on but vague descriptions of symptoms, physicians would “open up” a patient to look around and see what needed fixing.

Continued…. In market research, exploratory research

plays a similar role. Marketers have no machines to peer inside

a decision problem, so they may use certain research techniques to “open up” the problem and look around.

Researchers use these techniques, which they refer to collectively as exploratory research, with a single broad purpose: clarify the research questions that guide the entire research project.

Why one need Descriptive Research over conclusive research?

Researchers want to know general information about human beings, such as what factors lead to excessive drinking among college students and what the results of this practice might be.

An experimental research design would divide random college students in two groups, asking one group to drink a lot of alcohol and the other to abstain. This would be a completely unethical study because it would put the research subjects in danger.

Instead of putting subjects in danger, researchers use various forms of descriptive research, which can include having the students fill out surveys, observing students' behavior in various settings and interviewing students.

In this way, researchers can study students who self-select drinking behaviors.

While descriptive research can yield rich descriptions of factors that may be associated with drinking behavior, it cannot determine causal factors between variables the way experimental research can

Scientific Method Both Methods (Exploratory &

Descriptive) Employ Scientific Methods

Definition The analysis and interpretation of empirical

evidence (facts from observation or experimentation) to confirm or disprove prior conceptions.

It requires Systematic Analysis & Logical

Interpretation of empirical evidences

MANAGERAIL VALUE OF BUSINESS RESEARCH It reduces……….??????? The Decision-making Process

Associated with the Development and Implementation of a Strategy Identifying problems and opportunities Diagnosis and assessment of problem &

opportunities Selecting and implementing a course of

action Evaluating the course of action

Identifying problems and opportunities-1

The description of the dividend history of stocks in an industry may point to an attractive investment opportunity.

What could be the role of business research in this case?????????

Continued

Employees interviews undertaken to characterize the dimensions of an air line reservation clerk’s job reveal that reservation clerks emphasize competence in issuing the tickets over courtesy and friendliness in customer contact.

Diagnosis and assessment of problem & opportunities-2

Provisioning of diagnostic information that clarifies the situation

Examples: Underlying factors creating a problem.

If there is a problem than need to specify what happened & why

If multiple opportunities exist. Research may set priorities.

The information collected may give you many solutions.

Selecting and implementing a course of action-3

Factory is to be built in Delhi or HP. It is possible to answer this question

after analyzing data of all dimension of the business

Means by taking in to account all factors.

Evaluating the course of action-4 Planned activities are properly

executed or not? It is to be evaluated.

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.

Conducted by Government Agencies for evaluating their existing programs for up liftment of the society.

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”This is an example of evaluation

research.

Proprietary Research

Emphasizes the company’s gathering of new data.

Not conducted regularly or continuously.

Projects conducted to study specific company problems.

More Term – Business Research One

Qualitative Data Based Research Quantitative Data Based Research

Two Research based on Primary data Research based on Secondary data

Determining When to Conduct Business Research Time constraints Availability of data Nature of the decision Benefits versus costs

Is sufficient time available before

a managerial decision

must be made?

Is the infor-mation already

on handinadequate for making

the decision?

Is the decision of considerable

strategicor tactical

importance?

Does the value of the research

informationexceed the cost of conducting

research?

ConductingBusinessResearch

Do Not Conduct Business Research

Time Constraints

Availability of Data Nature of the Decision

Benefits vs. Costs

Yes YesYes

Yes

No No No No

Determining When to Conduct Business Research

Value versus Costs

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

Value• Decreased certainty• Increased likelihood

of a correct decision

• Improved business performance and resulting higher profits

Costs• Research

expenditures• Delay of business

decision and possible disclosure of information to rivals

• Possible erroneous research results

Value Should Exceed Estimated Costs

Major Topics for Research in Business-1 General Business Conditions and Corporate

Research Short term forecasting Long term forecasting Trend analysis Global environment analysis Inflation & pricing Plant & warehouse location Acquisions

Major Topics for Research in Business-2 Financial and Accounting Research

Interest trends Stock, bond, commodity prediction Capital formation alternatives Merger & acquisitions Risk return trade off Impact of taxes Portfolio analysis Research on financial institution Expected rate of returns

Major Topics for Research in Business-3

Management and Organizational Behavior Research TQM Morale & Job Satisfaction Leadership style Employee Productivity

Sales and Marketing Research Market Potentials Market share Market segmentation Sales analysis

Information Systems Research Knowledge & information need assessment Data Mining

Corporate Responsibility Research Ecological Impact Logical constraint Social values & ethics

Business Research – in Today’s Context

Increased globalization Unknown lands of unknown people.

Growth of Information Technologies.

Working Philosophy Why I collect if I can store it? Why I store it if I can not analyze it? Why I analyze it if it does not value

for me?

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 Political Institutions Political climate Infrastructure

Cultural and other factors which are responsible for success & failure of business

Market and competitive conditions – Market Size & Demand estimation etc.

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

Types Of Databases Bibliographic/text Statistical/geographic Scanner Financial Image and video