Business Research MethodsBusiness Research ProcessClass DiscussionsDr Huei Hsia Holloman
Course Highlights• Introduction to researchmethodology• Research Terminology and theScientific Method• Designing and implementing aresearch project• Ethics in Research• Types of Research• Measurements in Research• Primary and Secondary Data• Analyzing primary andsecondary data (quantitativetechniques)• Communicating ResearchResults• Undertaking ResearchProject by the courseparticipants
Team Discussions1. What is Business Research?2. When?3. Where?4. Who?5. Why?6. How? Types of BR?
1. What is Business Research? The systematic & objective process ofgathering, recording& analyzing data for business decisionsmaking (Cooper et al., 2011)2. Types of BR Methods? Surveys, In-deptInterviews, Observation, Experiments, Archival and HistoricalData, Qualitative vs. Quantitative Analysis3. When? In situations of uncertainty & improving the quality ofdecision-making to ensure organizations’ continuity4. Who? Public-Sector Agencies, Consulting Firms, ResearchInstitutes, NGOs, NPOs, Independent Researchers & ConsultantsTeam Discussions
Where Business Research is UsedGeneral Business Conditions/Corporate Research• Short- & Long-RangeForecasting,• Business and Industry Trends• Global Environments• Inflation and Pricing• Plant and Warehouse Location• AcquisitionsManagement & OrganizationalBehaviour Research• Total Quality Management• Morale and Job Satisfaction• Leadership Style• Employee Productivity• Organizational Effectiveness• Structural ssues• Absenteeism and turnover• Organizational Climate
Sales and Marketing Research• MarketPotentials, Share, Segmentation• Market characteristics• Sales Analysis• Establishment of sales quotas• Distribution channels• New product concepts• Test markets• Advertising research• Buyer behaviour• Customer satisfaction• Website visitation ratesFinancial/Accounting Research• Forecasts of financial interest ratetrends, expected rate of return• Stock,bond, commodity valuepredictions• Capital formation alternatives• Mergers & acquisitions• Risk-return trade-offs• Portfolio analysis• Impact of taxes• Research on financial institutions• Capital asset pricing models• Credit risk• Cost analysis
Where Business Research is UsedInformation Systems Research• Knowledge and information needsassessment• Computer information system useand evaluation• Technical suppot satisfaction• Database analysis• Data mining• Enterprise resource planningsystems• Customer relationship managementsystemsCorporate ResponsibilityResearch• Ecological Impact• Legal Constraints on advertisingand promotion• Sex, age and racialdiscrimination / worker equity• Social values and ethics
Examples: Real-Life Situations Using BR Methods• A firm wants to produce and market a new product but first wants to ascertainif there is a potential consumer demand for this product in markets x,y and z• A multinational firm wants to establish a production facility in another countryafter determining its technical and economic feasibility• A government agency wants to ascertain the satisfaction level of itsemployees, the causes for any possible discontent, and propose a scheme forenhancing this level• A financial institution wants to invest in commodities and commissions a studyto determine the past trends and forecast future returns in a portfolio ofcommodities• The CEO of a firm wants to undertake a SWOT-Analysis as part of his plan toredefine his organization’s priorities
Basic and Applied ResearchBasic Research aims to expand the frontiers of science and knowledge byverifying or disproving the acceptability of a given theory or attempting todiscover more about a certain concept (non-specificity)Example: How does $ affect employee performance?Applied Research focuses on a real-life problem or situation with a view tohelping reach a decision how to deal with it (Specificity)Example: Should Corporation X adopt a paperless office environment?
Science and the Scientific MethodScience has been defined as “the methodological andsystematic approach to acquisition of new knowledge”(Geoffrey Marcyzk, David DeMatteo, David Festinger, Essentials ofResearch Design and Methodology, John Wiley & Sons, 2005, p. 4)The scientific method, which has evolved since the 13thcentury, concerns the set of tools, techniques andprocedures used by basic and applied researchers toanalyze and understand phenomena and prove ordisprove prior conceptions
The Essence of the Scientific MethodCharacteristics of the Scientific MethodObjectivitySystematic AnalysisLogical Interpretation of ResultsElements of theScientific MethodEmpirical ApproachObservationsQuestionsHypothesesExperimentsAnalysisConclusionReplicationBasicResearchAppliedResearchScientificMethodInformation orIdeas for alternativeCourses of actionGeneral Laws
The Value of Business Research for Managers – (1)Reduction of uncertainty and improvement inthe quality of decision-making with severalconsequent advantages (e.g.strategic, operational) and benefits fororganizationsBusiness Research Methods can be employedin each of the following four stages:(1) Identification of problems and/or opportunitiesUseful for strategy planning, analysis of internal andexternal organizational environment
The Value of Business Research for Managers – (2)(2) Diagnosing and Assessment of problems and/oropportunitiesIts purpose is to gain insight into the underlyingreasons and causes for the situation. If there is aproblem, it asks what happened and why? If there isan opportunity, it seeks to explore, clarify and refinethe nature of the opportunity and, in the case ofmultiple opportunities, seeks to set priorities(3) Selection and Implementation of Courses of ActionAfter alternative courses of action have beendetermined, selection of the best possible course.
The Value of Business Research for Managers – (3)An important consideration is the quality offorecasting which is an essential tool of research(4) Evaluating the Course of ActionBusiness Research Methods are used after a courseof action has been implemented in order todetermine whether activities have been properlyimplemented and have accomplished what theyintended to do
The Value of Business Research for Managers – (4)Evaluation Research – It is the formal objectivemeasurement and evaluation of the extent which anactivity, project or programme has achieved its goal, andthe factors which influence performance (e.g. audits). It isalso the formal objective measurement and evaluation ofthe extent to which on-going activities, projects orprogrammes are meeting their goals (performance-monitoring research)Examples of performance-monitoring research:(1) Are railway passengers satisfied with the level ofservice the railway company is providing? If not, thenresearch may need to be undertaken to ascertain thereasons for customer dissatisfaction and proposecorrective measures
The Value of Business Research for Managers – (5)(2) What are the trends in retail and wholesale sector?Can research suggest new ways to improve efficiencyin purchase transactions?
When Should Business Research be Undertaken?Is sufficient timeavailable?Is informationinadequate?High importanceof decision?Research benefitsgreater than costs?YesYesYesUndertake Business ResearchNO Do notundertake Business Research
Value & Costs of Undertaking Business ResearchVALUEDecreased UncertaintyHigher Likelihood ofCorrect DecisionsBetter BusinessperformanceHigher ProfitsBetter ReputationCOSTSResearch CostsDelay in MakingBusiness DecisionsDisclosure ofInformation to RivalsPossibility of Error
The Building Blocks of ResearchMeasurements of phenomena(e.g. sales statistics of a department store)DATADetermination of relationship amongst data with aview to facilitating understanding of the phenomena,their relationships and decision-making(e.g. past and predicted future sales trends)INFORMATIONKNOWLEDGEBlend of information, experience and in-sights thatprovides a framework that can be thoughtfully evaluatedwhen assessing new information or evaluatingrelevant situations
Demands on Data & Information• Relevance to the problem or situation at hand• Must be available in a timely manner to the right person(manager or decision-maker)• Completeness• Accuracy• Accessibility• Affordability• Integrateability into a broader global information or decision-support system
Global Information Support SystemsA Global Information System may be defined as “ anorganized collection of computer hardware,communication equipment, software, data, andpersonnel designed to capture, store, update,manipulate, analyze, and immediately displayinformation about worldwide business activities”A Global Information System is a tool for providing past,current and projected information on internal operationsand external activity. It organizes and integrates datafrom production, operations, marketing, finance,accounting and other business functions(Zikmund, p. 22)
Decision-Support System• A computer-based system that helps decision makersconfront problems through direct interaction withdatabases and analytical software programs• The purpose of a decision support system is to storedata and transform them into organized information thatis easily accessible to decision-makers• Decision-Support Systems are integrated in GlobalInformation Systems. They are aimed usually forassisting managers and decision-makers in specificorganizational business units (e.g.divisions, departments and functional areas) by providingorganized and adaptable information
Databases & Software• Databases are collections of raw data whichhave been arranged in a logical manner andwhich can be stored and processedelectronically• Software are programmes that allow complexoperations to be undertaken on data and whichgive information for managers and decision-makers• Data Warehousing & Data Mining
Data and Information Sources for BusinessResearchers – (1) Internal RecordsExample: Data about costs, shipments, inventory, sales, and other aspectsof regular operations which are collected from various functional areas of anorganization Proprietary Business ResearchExample: New data and information from projects which are undertaken adhoc to study specific company problems Business intelligence SystemsExample: Information about nonrecurring developments in the externalbusiness environment stemming from a network of sources and regularprocedures
Data and Information Sources for Business Researchers– (2) On-Line DatabasesExamples: PROQUEST, INFOTRAC, DIALOG, LEXIS-NEXIS, Dow Jones News Retrieval Services, CompuStat InternetExamples: World Wide Web search engines (Google,Yahoo, Altavista, Lycos, Excite etc.) All Other SourcesExamples: Research Institutions, Libraries, Books,Journals, Periodicals,Newspapers, Chambers of Commerce and Industry
Business Research in the International ContextBusiness Research is being increasingly applied in aninternational context in the wake of globalization and theconsequent freedom of movement of the resources oflabour, capital and information of businesses andcorporations:• Overseas market potential• Joint ventures and relocating production lines overseas• Framework considerations for investment and trade (e.g.culture, legal environment, security, physicalinfrastructure, availability and quality of humanresources, logistics, political stability, trade andinvestment incentives)
Data and Information Sources for BusinessResearchers (Pakistan)• Federal and provincial ministries of commerce, industries and production• Federal, provincial and city Chambers of Commerce and Industry• State Bank of Pakistan, Pakistan Banking Council, local and foreign bankinginstitutions• Stock Exchanges• National Investment Board• Export Promotion Bureau• Manufacturers, Traders and Exporters Associations• Research Institutes (e.g. Pakistan Institute of Development Economics)• Newspapers and Magazines (e.g. Business Recorder, Pakistan and GulfEconomist)• Business and Trade Directories• Internet (e.g.: www.forexpk.com)