1 brm intro (1)


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  • An organization’s mission drives its business goals, strategies, and tactics and, consequently, its need for business decision support systems and business intelligence. Students need to understand the differences in these concepts to fully understand what drives a manager to seek solutions through research.
  • Exhibit 1-2
    Exhibit 1-2 illustrates the hierarchy of business decision makers.
    In the bottom tier, most decisions are based on past experience or instinct. Decisions are also supported with secondary data searches.
    In the middle tier, some decisions are based on business research.
    In the top tier, every decision is guided by business research. Firms develop proprietary methodologies and are innovative in their combination of methodologies. There is access to research data and findings throughout the organization.
  • Exhibit 1-5 presents the characteristics of good business research and also explains what managers should look for in research done by others.
    You might wish to discuss the concepts here, before you discuss who actually conducts research…or you might want to discuss who conducts research first, followed by this slide to summarize.
  • This slide provides an example of an inductive argument.
  • Exhibit 3-8
    Induction and deduction can be used together in research reasoning. Induction occurs when we observe a fact and ask, “Why is this?” In answer to this question, we advance a tentative explanation or hypothesis. The hypothesis is plausible if it explains the event or condition (fact) that prompted the question. Deduction is the process by which we test whether the hypothesis is capable of explaining the fact.
    Exhibit 3-8 illustrates this process.
  • In practice, the term variable is used as a synonym for the property being studied. In this context, a variable is a symbol of an event, act, characteristic, trait, or attribute that can be measured and to which we assign categorical values. The different types of variables are presented on the following slides.
  • For the purposes of data entry and analysis, we assign numerical values to a variable based on that variable’s properties. Dichotomous variables have only two values that reflect the absence or presence of a property. Variables also take on values representing added categories such as demographic variables. All such variables are said to be discrete since only certain values are possible. Continuous variables take on values within a given range or, in some cases, an infinite set.
  • Exhibit 3-2
    Exhibit 3-2 presents the commonly used synonyms for independent and dependent variables.
    An independent variable is the variable manipulated by the researcher to cause an effect on the dependent variable.
    The dependent variable is the variable expected to be affected by the manipulation of an independent variable.
  • Moderating variables are variables that are believed to have a significant contributory or contingent effect on the originally stated IV-DV relationship. Whether a variable is treated as an independent or as a moderating variable depends on the hypothesis. Examples of moderating variables are shown in the slide.
  • Extraneous variables are variables that could conceivably affect a given relationship. Some can be treated as independent or moderating variables or assumed or excluded from the study. If an extraneous variable might confound the study, the extraneous variable may be introduced as a control variable to help interpret the relationship between variables. Examples are given in the slide.
  • An intervening variable (IVV) is a factor that affects the observed phenomenon but cannot be measured or manipulated. It is a conceptual mechanism through which the IV and MV might affect the DV.
  • A descriptive hypothesis is a statement about the existence, size, form, or distribution of a variable. Researchers often use a research question rather than a descriptive hypothesis. Examples are provided in the slide. Either format is acceptable, but the descriptive hypothesis has three advantages over the research question.
    Descriptive hypotheses encourage researchers to crystallize their thinking about the likely relationships.
    Descriptive hypotheses encourage researchers to think about the implications of a supported or rejected finding.
    Descriptive hypotheses are useful for testing statistical significance.
  • A relational hypothesis is a statement about the relationship between two variables with respect to some case. Relational hypotheses may be correlational or explanatory (causal).
    A correlational hypothesis is a statement indicating that variables occur together in some specified manner without implying that one causes the other.
    A causal hypothesis is a statement that describes a relationship between two variables in which one variable leads to a specified effect on the other variable.
  • This slide presents the functions served by hypotheses.
  • 1 brm intro (1)

    1. 1. BRM Introduction
    2. 2. Why Research in Business? • Information • Interpretation Example: New Coke in 1985: what went wrong? Before the launch: Survey • Loyal consumers were divided about the change in taste of Coke • Loyal consumers also drink Pepsi, for its sweeter taste Focus Group: • Dissatisfaction about the taste After the Launch things didn’t work. Why? • The research was erroneous/ interpretations were wrong • They didn’t attach much importance to the consumers’ emotional attachment with the original brand
    3. 3. Stimulators for Business Research • Internet and information • Stakeholders’ influence • Competition • Government intervention • Complex decisions • Computing power and speed
    4. 4. Computing Power and Speed Real-time Access Real-time Access Lower-cost Data Collection Powerful Computation Powerful Computation Better Visualization Tools Better Visualization Tools Integration of Data Integration of Data FactorsFactors
    5. 5. Business Research • A process of determining, acquiring, analyzing, synthesizing, and disseminating relevant business data, information, and insights to decision makers in ways that mobilize the organization to take appropriate business actions that, in turn, maximize business performance
    6. 6. Relevance & Significance of Research Relevance • It’s very useful in solving operational and planning problems of industry and business • It’s a necessity in today’s business environment as it has become essential for surviving in today’s world Significance • It reduces uncertainty by providing information that improves the decision making process • Its contribution is valuable to the business of the company involved because it unfolds different directions of thinking, adds to existing knowledge and leads to different findings that may be useful for implementation
    7. 7. How to Proceed about Business Research? • Satisfy customer groups: Consumers, Employees, Shareholders etc. • Controllable variables: Product, Pricing, Promotion, Distribution • Uncontrollable factors: Economy, regulations, political and social factors etc. • The decision maker needs info on customers, competitors and other forces. Sound information is key to the correct management decisions • Having the info and analysing it: research can provide meaningful insights to facilitate decision making
    8. 8. Business Planning Drives Business Research Organizational Mission Business Goals: sales, productivity, profitability, efficiency etc. Business Strategies Business Tactics: Activities executing a strategy Decision Support : DSS, BIS DSS: Numerous elements of data organized for retrieval and use in Business decision making; Stored and retrieved via Intranets, Extranets BIS: Ongoing information Collection; Focused on events, trends in micro and macro-environments
    9. 9. Purpose of Business Research • Identify opportunities/problems • Defina/ refine strategies • Define/refine tactics • Improve understanding about different aspects of business
    10. 10. Hierarchy of Business Decision Makers Visionaries Intuitive Decision Makers Standardized Decision Makers Visionaries
    11. 11. Who Conducts Research? • Internal Research Suppliers • External Research Suppliers – Research Firms – Communication Agencies – Consultants
    12. 12. When to Conduct Research • Can It Pass These Tests? • Can information be applied to a critical decision? • Will the information improve managerial decision making? • Are sufficient resources available? • Will the time permit?
    13. 13. When should Business Research be conducted? Issufficient time available before amanagerial decision must bemade? Isthe information already on hand inadequate for making thedecision? Isthe decision of considerable Strategic or Tactical importance? Doesthe Valueof the Research Information Exceed the Cost of Conducting research? Conduct Business Research Business Research Should Not be Conducted Yes Yes Yes Yes No No No No Time Constraint Availability of data Nature of decision Benefits vs costs
    14. 14. Characteristics of Good Research Clearly defined purposeClearly defined purpose Detailed research processDetailed research process Thoroughly planned designThoroughly planned design High ethical standardsHigh ethical standards Limitations addressedLimitations addressed Adequate analysisAdequate analysis Unambiguous presentationUnambiguous presentation Conclusions justifiedConclusions justified CredentialsCredentials
    15. 15. Problem No. 1 • Want to run a food stall in Alipore?
    16. 16. Problem No. 2 A finance company has its own agents in the rural areas as well as urban areas. Its Fixed Deposit market in rural areas are quite good. Now, the company wants to explore the market for insurance through its own distribution channel. How the company will do it?
    17. 17. Problem No. 3 Why Consumers Prefer Barista to Café Coffee Day?
    18. 18. Problem No. 4 • Kellogg’s experienced a slump in the market. Why? Identification • How to solve the problem? Solution
    19. 19. Problem No. 5 How to recover old (disconnected) phone sets from the consumers?
    20. 20. Problem No. 6 • A not-very-much-known pharmaceutical company wants to increase its market share and also make its presence felt in way of some other related products/ services
    21. 21. Research ProblemsResearch Problems From the research idea one has to think of a general research question and formulate a research problem. E.g. you are interested about NGOs in India. From this you have to make a research question like, how their work is doing good to our people and/or how their fundings are coming Examples of Research ProblemsExamples of Research Problems Marketing  Market Potentials/share/segmentation/characteristics  Advertising research  Product Launching  Design of advertisements  Purchasing Pattern of Consumers Finance  Credit Card Industry  Mergers and acquisitions General Business  Forecasting  Industry trends  Global environments
    22. 22. Some More Specific Business Research Topics: Marketing • Factors Influencing Expenditure on Consumption of Milk and Milk Product in Chennai • Demographic Factor: A Determinant for the Purchase Decision of Motorcycles in Kanchipuram Town (Tamil Nadu) • A Survey of Consumer Awareness about Consumer Legislations in India. • Consumer Behavior towards Mobile Service Providers: An Empirical Study Finance • Inter - Industry Differences in Capital Structure: Evidence from India • Accumulation of Market Power in Mergers and Acquisitions: Evidence from the Indian Pharmaceutical Industry • Effect of Expiration - Day of Derivatives on Price, Volume and Volatility of Cash Segment of Stock Market HR • Climate Profile and Organizational Citizenship Behaviors: A Comparative Analysis of Teachers Working in Public and Private Schools
    23. 23. Steps of Research • Planning Establish Research Objective Formulation of a Research Problem Preparation of the Research Design • Operation Data Collection Analysis of Data Interpretation of Results • Reporting Drafting: a summary of the process Findings Suggestion for further research
    24. 24. Basic Tenets of Research • Scientific Method (sound reasoning) – Direct observation – Clearly defined variables/methods – Empirically testable hypotheses – Statistical justification of conclusions – Self-correcting process – Sound Reasoning: Exposition and Argument – Deduction (conclusive: strong bond b/w reason and conclusion) – Induction
    25. 25. Deductive Reasoning Inner-city household interviewing is especially difficult and expensive Inner-city household interviewing is especially difficult and expensive This survey involves substantial inner-city household interviewing This survey involves substantial inner-city household interviewing The interviewing in this survey will be especially difficult and expensive The interviewing in this survey will be especially difficult and expensive
    26. 26. Inductive Reasoning • Why didn’t sales increase during the 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
    27. 27. Why Didn’t Sales Increase?
    28. 28. Basic Tenets of Research • Language of Research – Concepts – Constructs – Definitions – Variables – Propositions & Hypothesis – Theory – Models
    29. 29. A Variable Is the Property Being Studied VariableVariable EventEvent ActAct CharacteristicCharacteristic TraitTrait AttributeAttribute
    30. 30. Types of Variables DichotomousDichotomous Male/Female Employed/ Unemployed Male/Female Employed/ Unemployed DiscreteDiscrete Ethnic background Educational level Religious affiliation Ethnic background Educational level Religious affiliation ContinuousContinuous Income Temperature Age Income Temperature Age
    31. 31. Independent and Dependent Variable Synonyms •Independent Variable (IV) •Predictor •Presumed cause •Stimulus •Predicted from… •Antecedent •Manipulated •Dependent Variable (DV) •Criterion •Presumed effect •Response •Predicted to…. •Consequence •Measured outcome
    32. 32. Relationships Among Variable Types
    33. 33. Relationships Among Variable Types
    34. 34. Relationships Among Variable Types
    35. 35. 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).
    36. 36. 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 of the firing range (MV).
    37. 37. 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).
    38. 38. Hypothesis Formats •Descriptive Hypothesis –In Detroit, our potato chip market share stands at 13.7%. –American cities are experiencing budget difficulties. •Research Question –What is the market share for our potato chips in Detroit? –Are American cities experiencing budget difficulties? •Proposition and Hypothesis
    39. 39. Relational Hypotheses •Correlational •Young women (under 35) purchase fewer units of our product than women who are older than 35. •The number of suits sold varies directly with the level of the business cycle. •Causal •An increase in family income leads to an increase in the percentage of income saved. •Loyalty to a grocery store increases the probability of purchasing that store’s private brand products.
    40. 40. The Role of Hypotheses Guide the direction of the studyGuide the direction of the study Identify relevant factsIdentify relevant facts Suggest most appropriate research designSuggest most appropriate research design Provide framework for organizing resulting conclusions Provide framework for organizing resulting conclusions
    41. 41. • Research Hypotheses: The formulation of hypotheses or propositions that may be possible answers to research questions is an important step in the process of formulating the research question. The hypothesis is a testable proposition. This particular aspect needs to be discussed in some detail. Sources of Hypothesis • Theory (Testing efficient market hypothesis for Indian data) • Observation (girls are more serious about attending classes than boys) • Analogies (Loyal customers expect better post purchase service for consumer durables……..) • Intuition & experience • Previous research findings (there exists co-movement in stocks……this motivated me in finding out whether the volatility in those stocks trigger more volty in our market or not) • Existing literature/ state of knowledge • Culture / Socio-economic environment • Continuity of research (FII nature followed by FII volatility) 41
    42. 42. Characteristics of a good hypothesis It should be: • Conceptually clear • Specific • Testable • Should have applicability of techniques • Theoretically relevant • Consistent • Objective • Not very complex 42
    43. 43. How to Develop a Hypothesis: The Rules  Take the variable measurements with the most quantitative characteristics available  Make the measurement of the scale (of the variable) explicit and clear  Use the variables which can be clearly defined and commonly accepted, do not use vague terms  Try to be more specific, e.g. link two or more formal propositions through a common variable if possible 43
    44. 44. Testing of Statistical Hypotheses Hypothesis is only a hunch or a provisional idea that should be tested by proper methods and the result may be either acceptance or rejection. The researcher should not try to ‘prove’ the hypothesis, but try to ‘test’ it. Type I and Type II errors are associated with it: Type I: Reject the hypothesis when it is true Type II: Accept the hypothesis when it is false 44
    45. 45. Criteria for judging hypothesis • One can evaluate the hyp. using the criteria suggested by Goode & Hatt whether it is conceptually clear, has empirical reference, specific, related to techniques and related to any theory or not. • According to Clover & Basley, the criteria are: whether all the aspects are covered, all the possibilities considered and the hypothesis is strongly related to the research question or the problem. 45
    46. 46. Theory & Model • Theory: a set of systematically interrelated concepts/definitions/propositions to explain facts • Model: representation of a system
    47. 47. Ref • Cooper and Schindler, Chaps 1 and 2