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1. The Research ProcessThe Research ProcessThe Research ProcessThe Research ProcessABDM4064 BUSINESS RESEARCHABDM4064 BUSINESS RESEARCHbyStephen OngPrincipal Lecturer (Specialist)Visiting Professor, Shenzhen
2. 4–2LEARNING OUTCOMESLEARNING OUTCOMESLEARNING OUTCOMESLEARNING OUTCOMES1. Classify business research as either exploratoryresearch, descriptive research, or causal research2. List the major phases of the research process andthe steps within each3. Explain why proper “problem definition” isessential to useful business research4. Know how to recognize problems5. Translate managerial decision statements intorelevant research objectives6. Translate research objectives into researchquestions and/or research hypothesesAfter studying this chapter, you should
3. 4–3Types of Business ResearchTypes of Business Research Business research can be classified on the basis oftechnique (e.g. experiments, surveys, or observationstudies) or purpose. Classifying research on the basis of its purpose, itcan be broken into three categories: (1) exploratory, (2) descriptive, and (3) causal.
4. 4–4Exploratory ResearchExploratory Research It is conducted to clarify ambiguous situations ordiscover ideas that may be potential businessopportunities. It is not intended to provide conclusive evidencefrom which to determine a particular course ofaction. It is not an end unto itself – usually it is conductedwith the expectation that more research will beneeded to provide more conclusive evidence. It is particularly useful in new product development.
5. 4–5Descriptive ResearchDescriptive Research It describes characteristics of objects, people,groups, organizations or environments. It addresses who, what, when, where, and howquestions. It often helps describe market segments. It is conducted with a considerable understanding ofthe situation being studied. Diagnostic analysis Seeks to diagnose reasons for marketoutcomes and focuses specifically on thebeliefs and feelings consumers have aboutand toward competing products.
6. 4–6Descriptive Research (cont’d)Descriptive Research (cont’d) Examples The average Weight Watchers’ customer Is a female about 40 years old Has a household income of about $50,000 Has at least some college education Is trying to juggle children and a job Characteristics of leaders Empathetic Resourceful Ability to delegate
7. 4–7Causal ResearchCausal Research It allows causal inferences to be made. It seeks to identify cause-and-effect relationships. When something causes an effect, it means it bringsit about or makes it happen; the effect is theoutcome. It usually follows exploratory and descriptiveresearch and, therefore, the researchers are quiteknowledgeable about the subject.
8. Causal Research (cont’d)Causal Research (cont’d) Causal research attempts to establish that when wedo one thing, another thing will follow – a causalinference is just such a conclusion. A causal inference can only be supported whenvery specific causal evidence exists, and the threecritical pieces of causal evidence are: Temporal Sequence – deals with the timeorder of events; having an appropriatecausal order of events means the causemust occur before the effect. i.e. the cause must occur before the effect. E.g. chef changed, sales dropped after thatchange.4–8
9.  Concomitant Variation – occurs when twoevents “covary,” meaning they varysystematically and a when a change in thecause occurs, a change in the outcome alsois observed. Changes in income level will lead to changes in thespending. Nonspurious Association – any covariationbetween a cause and an effect is true and notsimply due to some other variable. E.g. introduction of compulsory attendance inlecture leads to improved attendance in lecture.4–9
10. EXHIBIT 4.EXHIBIT 4.22 The Spurious Effect of Ice CreamThe Spurious Effect of Ice Cream
11. 4–11Causal Research - Degrees ofCausal Research - Degrees ofCausalityCausality Absolute Causality The cause is necessary and sufficient tobring about the effect. E.g. rain - wet floor Conditional Causality A cause is necessary but not sufficient tobring about an effect. Rain – wet floor – broken leg Contributory Causality A cause need be neither necessary norsufficient to bring about an effect. Weakest form of causality. Rain – wet floor – quarrel between couples
12. 4–12Causal Research - ExperimentsCausal Research - Experiments Experiment A carefully controlled study in which the researchermanipulates a proposed cause and observes anycorresponding change in the proposed effect. Experimental variable Represents the proposed cause and is controlledby the researcher by manipulating it. Manipulation The researcher alters the level of the variable inspecific increments. Test-market An experiment that is conducted within actualmarket conditions.
13. © 2010 South-Western/CengageLearning. All rights reserved. May notbe scanned, copied or duplicated, orposted to a publically accessiblewebsite, in whole or in part.4–13EXHIBIT 4.EXHIBIT 4.33 Testing for Causes with an ExperimentTesting for Causes with an Experiment
14. 14COMPLETELYCERTAINABSOLUTEAMBIGUITYCAUSAL ORDESCRIPTIVEEXPLORATORYUncertainty InfluencesThe Type Of Research
15. 15Exploratory Research Descriptive Research Causal Research(Unaware of Problem) (Aware of Problem) (Problem Clearly Defined)“Our sales are declining and “What kind of people are buying“ Will buyers purchase more of ourwe don’t know why.” our product? products in a new package?Who buys our competitor’sproduct?”“Would people be interested “Which of two advertisingin our new product idea?” “What features do buyers prefer campaigns is more effective?”in our product?”possiblesituationDegree of ProblemDegree of ProblemDefinitionDefinition
16. 4–16EXHIBIT 4.EXHIBIT 4.44 Characteristics of Different Types of Business ResearchCharacteristics of Different Types of Business ResearchUncertainty Influences the Type of Research Conducted
17. 4–17Stages in the ResearchStages in the ResearchProcessProcess Process stages:1. Defining the research objectives2. Planning a research design3. Planning a sample4. Collecting the data5. Analyzing the data6. Formulating the conclusions and preparingthe report Forward linkage—earlier stages influence later stages. Backward linkage—later stages influence earlier stages.
18. 4–18EXHIBIT 4.EXHIBIT 4.55 Stages of the Research ProcessStages of the Research Process
19. EXHIBIT 4.EXHIBIT 4.66FlowchartFlowchartof theof theBusinessBusinessResearchResearchProcessProcessNote: Diamond-shaped boxes indicate stages in the research process in which a choice of one or more techniquesmust be made. The dotted line indicates an alternative path that skips exploratory research.
20. 4–20Stages in the Research ProcessStages in the Research Process1. Defining the Research Objectives1. Defining the Research Objectives It is the beginning of the research process. Research objectives are the goals to be achieved byconducting research. In consulting, the term deliverables is often used todescribe the objectives to a research client. In applied business research, the objectives cannot belisted until there is an understanding of the decisionsituation, which must be shared between the actualdecision maker and the lead researcher. This understanding is often described as a problemstatement. A research proposal is a document in which the problem isstated. This is a process of discovery rather than confirmation.
21. Stages in the Research ProcessStages in the Research Process1. Defining the Research Objectives1. Defining the Research ObjectivesDefining the research problemAn orderly definition of the research problem lends asense of direction to the investigation.Properly defining a problem can be more difficult thansolving it.Defining the decision situation must precede theresearch objectives.Best place to begin a research project is at the end;that is, knowing what is to be accomplished determinesthe research process.4–21
22. Stages in the Research ProcessStages in the Research Process1. Defining the Research Objectives1. Defining the Research ObjectivesExploratory ResearchExploratory Research can be used to help identify thedecisions that need to be made.Once done, the researcher should know exactly whichdata to collect during formal phases of the project andhow to conduct the project.Researchers can employ techniques from four basiccategories to obtain insights and gain a clearer idea ofthe problem: previous research, pilot studies, case studies, and experience surveys4–22
23. 4–23Exploratory ResearchExploratory ResearchTechniquesTechniques Previous Research Literature review A directed search of published works, includingperiodicals and books, that discusses theory andpresents empirical results that are relevant to thetopic at hand. Pilot Studies A small-scale research project that collects data from respondentssimilar to those to be used in the full study. Pretest A small-scale study in which the results are onlypreliminary and intended only to assist in design of asubsequent study. Focus Group A small group discussion about some research topic ledby a moderator who guides discussion among theparticipants.
24. Stages in the Research ProcessStages in the Research Process1. Defining the Research Objectives1. Defining the Research Objectives Stating Research Objectives After identifying and clarifying the problem, theresearcher must formally state the researchobjectives. This statement delineates the type of researchthat is needed and what intelligence may resultthat would allow the decision maker to makeinformed choices. Represents a contract of sorts that commits theresearcher to producing the needed research.Note: You can refer to Topic 1 for the example4–24
25. ExampleExampleResearch idea ResearchQuestionsResearchObjectivesUsing teambriefing inorientationprogram1. Why haveorganisationsintroduced teambriefing?1. To identifyorganisations’objectives forteam briefing.2. Has team briefingbeen effective?2. To describe theextent to whichthe effectivenesscriteria for teambriefing being met.1–25
26. Stages in the Research ProcessStages in the Research Process1. Defining the Research Objectives1. Defining the Research Objectives Linking Decision Statements, Objectives, andHypotheses Hypotheses should be logically derivedfrom and linked to the research objectives.
27. 4–27EXHIBIT 4.EXHIBIT 4.77 Example Decision Statements, Research Objectives, andExample Decision Statements, Research Objectives, andResearch HypothesesResearch Hypotheses
28. 4–28Stages in the Research ProcessStages in the Research Process2. Planning the Research2. Planning the Research DesignDesign Research Design A master plan that specifies the methodsand procedures for collecting andanalyzing the needed information. Basic design techniques for descriptiveand causal research: Surveys Experiments Secondary data Observation
29. Stages in the Research ProcessStages in the Research Process2. Planning the Research Design2. Planning the Research Design Determination of which method should be chosendepends on: objectives of the study available data sources urgency of the decision cost of obtaining data Most common method is the survey.4–29
30. 4–30Selection of the BasicSelection of the BasicResearch MethodResearch Method Survey A research technique in which a sample isinterviewed in some form or the behaviorof respondents is observed and described. Telephone Mail Internet In person
31. Selection of the Basic ResearchSelection of the Basic ResearchMethodMethod Observations It can be mechanically recorded or observed byhumans. One advantage of the observation technique is thatit records behaviour without relying on reports fromrespondents. Several things of interest (i.e., attitudes, opinions,motivations) cannot be observed. The “Best” Research Design There is no single best research design. Several alternatives can accomplish the statedresearch objectives. Ability to select the most appropriate designdevelops with experience.4–31
32. 4–32Stages in the Research ProcessStages in the Research Process3.3. Planning a sample Sampling Involves any procedure that drawsconclusions based on measurements of aportion of the population. Sampling decisions Who to sample?—target population What size should the sample be? How to select the sampling units? Random sample Cluster-sample
33. Stages in the Research ProcessStages in the Research Process5. Gathering Data5. Gathering Data This is the process of gathering or collectinginformation. It may be gathered by human observers orinterviewers or may be recorded by machines (e.g.,scanner data). An unobtrusive method is one in which the subjectsdo not have to be disturbed for data to be collected. However the data are collected, it is important tominimize errors in the process.4–33
34. 4–34Stages in the Research ProcessStages in the Research Process5. Processing and Analyzing5. Processing and AnalyzingDataData Editing Involves checking the data collection formsfor omissions, legibility, and consistency inclassification. Codes Rules for interpreting, categorizing,recording, and transferring the data to thedata storage media. Data analysis The application of reasoning to understandthe data that have been gathered.
35. 4–35Stages in the Research ProcessStages in the Research Process6. Drawing Conclusions and6. Drawing Conclusions andPreparing a ReportPreparing a Report Steps in communicating the research findings: Interpreting the research results Describing the implications Drawing the appropriate conclusions for managerialdecisions Reporting requirements Conclusions fulfill the deliverables promised in theresearch proposal Consider the varying abilities of people to understand theresearch results A clearly-written, understandable summary of the researchfindings
36. 6–36Good Decisions Start with aGood Decisions Start with aGood Problem DefinitionGood Problem Definition Importance of Starting with a Good Problem Definition The chances that a research project willprove useful are directly related to how wellthe research objectives correspond to thetrue business problem. When the client fails to understand theirsituation, or when they insist on studying anirrelevant problem, the research is very likelyto fail even if it is done properly. Translating a business situation intosomething that can be researched begins bycoming to a consensus on a decisionstatement or question.
37. 6–37Good Decisions Start with aGood Decisions Start with aGood Problem DefinitionGood Problem Definition Decision Statement A written expression of the key question(s)that the research user wishes to answer. Problem Definition The process of defining and developing adecision statement and the steps involved intranslating it into more precise researchterminology, including a set of researchobjectives.
38. Problem ComplexityProblem Complexity Problem definition - this stage of the research process canbe the most complex. Factors influencing problem complexity include: Situation Frequency – cyclical, routineproblems are easier to define. Dramatic changes – when sudden change inthe business situation takes place, it can beeasier to define the problem. How Widespread are the Symptoms? – themore scattered any symptoms are, the moredifficult it is to put them together into somecoherent problem statement. Symptom Ambiguity – the greater theambiguity of the symptoms, the more difficult itis to define the problem.4–38
39. 6–39EXHIBIT 6.1EXHIBIT 6.1 Defining Problems Can Be DifficultDefining Problems Can Be Difficult
40. 6–40The Problem-Definition ProcessThe Problem-Definition Process Problems Mean Gaps A problem occurs when there is a differencebetween the current conditions and a morepreferable set of conditions (i.e., a gap existsbetween the way things are now and the way thatthings could be better). A gap can come about in a number of ways: 1. Business performance is worse than expected (e.g.,sales, profits, margins are below targets set bymanagement). 2. Actual business performance is less than possiblebusiness performance (note that realization of this gapfirst requires that management have some idea of what ispossible). 3. Expected business performance is greater thanpossible business performance.
41. 6–41EXHIBIT 6.2EXHIBIT 6.2 The Problem-Definition ProcessThe Problem-Definition Process
42. 6–42The Problem-Definition ProcessThe Problem-Definition ProcessStep 1: Understand the BusinessStep 1: Understand the BusinessDecisionDecision Situation Analysis A situation analysis involves the gatheringof background information to familiarizeresearchers and managers with thedecision-making environment. It often requires exploratory research. The situation analysis begins with aninterview between the researcher andmanagement.
43. 6–43The Problem-Definition ProcessThe Problem-Definition ProcessStep 1: Understand the Business DecisionStep 1: Understand the Business Decision(cont’d)(cont’d) Interview Process Researcher should be granted access to allindividuals who have specific knowledge or insightof the situation. It is important that the researcher not blindly accepta convenient problem definition for expediency’ssake. Helpful hints that can be useful in the interviewprocess include: 1. Develop many alternative problem statements. 2. Think about potential solutions to the problem. 3. Make lists – use free association and interrogative techniques(i.e., asking multiple what, where, who, when, why, and howquestions). 4.Be open-minded.
44. 6–44 Identifying Symptoms Probing is an interview technique that tries todraw deeper and more elaborate explanationsfrom the discussion with key decisionmakers. One of the most important questions to ask –“What has changed?” (i.e., customers,competitors, internal conditions of thecompany and in the external environment). Then, the researcher should probe to identifypotential causes of the change.The Problem-Definition ProcessThe Problem-Definition ProcessStep 1: Understand the Business DecisionStep 1: Understand the Business Decision(cont’d)(cont’d)
45. 6–45EXHIBIT 6.3EXHIBIT 6.3 What Has Changed?What Has Changed?
46. The Problem-Definition ProcessThe Problem-Definition ProcessStep 2: Identify the relevantStep 2: Identify the relevantissues from the symptomsissues from the symptoms The symptoms identified should betranslated into a problem and then adecision statement. Exhibit 6.4 illustrates how symptomscan be translated into a problem andthen a decision statement.4–46
47. 6–47EXHIBIT 6.EXHIBIT 6.44 Symptoms Can Be ConfusingSymptoms Can Be Confusing
48. 6–48The Problem-Definition ProcessThe Problem-Definition ProcessStep 3: Writing Managerial DecisionStep 3: Writing Managerial DecisionStatements into CorrespondingStatements into CorrespondingResearch ObjectivesResearch Objectives Decision statements must betranslated into research objectives. Once the decision statement is written,the research essentially answers thequestion, “What information is needed toaddress this situation?” Research objectives are thedeliverables of the research project.
50. 6–50The Problem-Definition ProcessThe Problem-Definition ProcessStep 4: Determine the Unit of AnalysisStep 4: Determine the Unit of Analysis Unit of Analysis Unit of analysis indicates what or who shouldprovide the data and at what level of aggregation. Individuals (such as customers, employees, and owners) Households (families, extended families, and so forth) Organizations (businesses and business units) Departments (sales, finance, and so forth) Geographical areas Objects (products, advertisements, and so forth). Multi-level analysis studies variables measured atmore than one unit of analysis.
51. The Problem-Definition ProcessThe Problem-Definition ProcessStep 5: Determine the RelevantStep 5: Determine the RelevantVariableVariable What is a Variable? A variable is anything that varies or changesfrom one instance to another. It can exhibit differences in value, usually inmagnitude or strength, or in direction. Converse of a variable is a constant (i.e.,something that does not change). What is a Constant? Something that does not change; is not usefulin addressing research questions.
52. Types of VariablesTypes of Variables Continuous variable Can take on a range ofquantitative values. E.g. Sales, profit,satisfaction Categorical variable Indicates membershipin some group. Also calledclassificatory variable. E.g. gender, customerversus non-customers Dependent variable, Y A process outcome ora variable that ispredicted and/orexplained by othervariables. Independent variable,X A variable that isexpected to influencethe dependent variablein some way.
53. 6–53EXHIBIT 6.EXHIBIT 6.66 Example Business Decision Situations, Corresponding Research Hypotheses, and VariableExample Business Decision Situations, Corresponding Research Hypotheses, and VariableDescriptionsDescriptions
54. ExampleExample The motivation to become an franchise entreprenThe motivation to become an franchise entrepren4–54
55. ExampleExampleHypothesis: There is a positive relationshipbetween treatment of employees andemployee loyalty Dependent variable Employee Loyalty Independent variable Treatment of employee4–55
56. The Problem-Definition ProcessThe Problem-Definition ProcessStep 6: Writing ResearchStep 6: Writing ResearchObjectives and QuestionsObjectives and Questions Research Questions Express the research objectives in termsof questions that can be addressed byresearch. Help to develop well-formulated, specifichypotheses that can be empirically tested. Help the researcher design a study thatwill produce useful results.
57. 6–57Clarity in ResearchClarity in ResearchQuestions and HypothesesQuestions and Hypotheses A research question is the researcher’s translation of theproblem into a specific inquiry. Asking specific research questions helps the researcherdesign a study that will produce useful results. A formal hypothesis has considerable practical value inplanning and designing research because it forcesresearchers to be clear about what they expect to findthrough the study, and it raises crucial questions aboutdata required. In cases of a “go/no go” decision, the research involvesa managerial action standard that specifies a specificperformance criterion upon which a decision can bebased. Objectives should be limited to a manageable number.
58. 6–58EXHIBIT 6.EXHIBIT 6.77 Influence of Decision Statement of Marketing Problem on ResearchInfluence of Decision Statement of Marketing Problem on ResearchObjectives and Research DesignsObjectives and Research Designs
59. 6–59How Much Time Should BeHow Much Time Should BeSpent on Problem Definition?Spent on Problem Definition? Budget constraints usually influence how mucheffort is spent on problem definition. The more important the decision faced bymanagement, the more resources should beallocated toward problem definition. The time taken to identify the correct problem isusually time well spent.
60. 1 - 60Further ReadingFurther Reading ZIKMUND, W.G., BABIN, B.J., CARR, J.C.AND GRIFFIN, M. (2010) BUSINESSRESEARCH METHODS, 8THEDN, SOUTH-WESTERN SAUNDERS, M., LEWIS, P. ANDTHORNHILL, A. (2012) RESEARCHMETHODS FOR BUSINESS STUDENTS, 6THEDN, PRENTICE HALL. SAUNDERS, M. AND LEWIS, P. (2012)DOING RESEARCH IN BUSINESS &MANAGEMENT, FT PRENTICE HALL.
61. Greenstar : Social FranchiseGreenstar : Social Franchisein Healthcare (Pakistan)in Healthcare (Pakistan) Less than 100 Employees Served 3.0 million patients, with highquality affordable services to morepoor patients than government clinics 8,000 in Facilities Network 24,000 health professionals trainedin reproductive and family healthissues; 1.3 million people contactedregarding reproductive healthawareness; 19 family health care productsthrough 80,000 retail outlets 2ndlargest provider of family planningservices, over 26% of allcontraceptives
62. Vitaloc : Social Enterprise FranchiseVitaloc : Social Enterprise Franchisehttp://www.youtube.com/watch?feature=player_embedded&v=GpfLAzk_DOo#!http://www.youtube.com/watch?feature=player_embedded&v=GpfLAzk_DOo#! Live Music Station to provideservices for pain relief andhealthy lifestyle Employment of at least 1/3of staff from disadvantagedgroups, such as middle-agedunemployed, single mom To provide small businessfor early retirees and laid-offworkers to rebuild theirconfidence
63. Appendix : A Franchise Checklist - 4PAppendix : A Franchise Checklist - 4P1.1. PProductroduct2.2. PProfitabilityrofitability3.3. PProcessrocess4.4. PPeopleeople
64. 1. Product/Service :1. Product/Service :1.1. Positive reputationPositive reputation2.2. Customer needCustomer need3.3. Growing marketGrowing market4.4. SafeSafe5.5. Patented/guaranteedPatented/guaranteed6.6. Self-interestSelf-interest7.7. Identified with known personalityIdentified with known personality8.8. Future needFuture need9.9. Strongly desirableStrongly desirable
65. 2. Process/ Business Format :2. Process/ Business Format : MarketingMarketing PromotionPromotion BrandBrandrecognitionrecognition ManagementManagement TrainingTraining AccountingAccounting Site selectionSite selection HeadquartersHeadquarterscontrolcontrol Service/repairsService/repairs Financial supportFinancial support Number ofNumber offranchiseesfranchisees AdvertisingAdvertising
66. 3. Profitability3. Profitability ProfitsProfits RevenuesRevenues Cost of goods soldCost of goods sold Labour costsLabour costs ExpensesExpenses Return on investmentReturn on investment Earnings claimEarnings claim Forecasted revenuesForecasted revenues Start-up costsStart-up costs Franchising feeFranchising fee Royalty fee (%)Royalty fee (%) Advertising feeAdvertising fee Other feesOther fees Termination costsTermination costs Selling of franchiseSelling of franchiserightsrights Renewal rights &Renewal rights &costscosts
67. 4. People4. People Franchisor ChairmanFranchisor Chairman Franchisor PresidentFranchisor President FranchisorFranchisoroperations executiveoperations executive Franchisor salesFranchisor salesexecutiveexecutive Other principals orOther principals ordirectorsdirectors Service departmentsService departments Advertising &Advertising &promotionspromotions Finance &Finance &accountingaccounting Sales & marketingSales & marketing Site selectionSite selection Personnel & trainingPersonnel & training Manufacturing &Manufacturing &operationsoperations Field supportField support