Managerial value of business research

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  • Managing resources - Issues / problems concerning allocation of scarce resources Setting direction - Issues / problems dealing with the future, and concerning shifts / changes in the business environment Managing relationships - Issues / problems dealing with the stakeholders of the business
  • Exploratory research – initial research conducted to clarify and define the nature of a problem Descriptive research – designed to describe characteristics of a population or a phenomenon Causal research – conducted to identify cause-and-effect relationships among variables when the research problem has already been narrowly defined
  • Source: Saunders, et. al. (2010); Easterby-Smith, et. al. (2008); Hedrick, et. al. (1993)
  • Source: Cooper and Schindler (2011)
  • Source: Cooper and Schindler (2011)
  • Managerial value of business research

    1. 1. The secret of success is to know something nobody else knows. – Aristotle OnassisManagerial value ofbusiness research By Raymund B. HabaradasManagement and Organization Department De La Salle University
    2. 2. What is your idea of research?
    3. 3. Research• Something that people undertake in order to find out things in a systematic way, thereby increasing their knowledge (Saunders, et. al., 2010)• The process of finding solutions to a problem after a thorough study and analysis of situational factors (Sekaran, 2003)
    4. 4. Business research• The systematic and objective process of gathering, recording, and analyzing data for aid in making business decisions (Zikmund, 2003)• An organized, systematic, data-based, critical, objective, scientific inquiry or investigation into a specific problem, undertaken with the purpose of finding answers or solutions to it (Sekaran, 2003)• A systematic inquiry that provides information to guide managerial decision making (Cooper and Schindler, 2008)
    5. 5. Context within which we undertake business research Competitive / turbulent business environment Business organization Goal = Profit++ (triple bottomline) Economic bottom line Social bottom line Environmental bottom line Effective and Efficient Management / LeadershipManaging resources Setting direction Managing relationships (Creating a vision; anticipating (Balancing / reconciling (Allocating resources) and exploiting opportunities) diverse interests)
    6. 6. Why research is important?• Research facilitates the identification of critical business issues• Research facilitates the gathering of relevant information• Research facilitates the analysis of data in ways that would help decision-making• Research facilitates the implementation of the right course of action
    7. 7. Research anddecision making
    8. 8. Decision making• The process of resolving a problem or choosing from among alternative solutions to a problem• Examples of decisions managers make: – Produce or subcontract? – Invest in new plant or machinery? – Introduce new product / service? – Enter new markets?
    9. 9. Decision making• To assist in making increasing complex decisions on goals, strategies, and tactics, managers turn to information drawn from: • Decision support system (DSS) – numerous elements of data organized for retrieval and use in decision making • Business intelligence system (BIS) – a system of ongoing information collection about events and trends in the technological, economic, political and legal, demographic, cultural, social and competitive arenas • Business research
    10. 10. Decision making situations• Certainty – decision maker has all the information that he or she needs. The decision maker knows the exact nature of the business problem or opportunity• Uncertainty – managers grasp the general nature of the objectives they wish to achieve, but the information about alternatives is incomplete.• Ambiguity – the nature of the problem to be solved is unclear; objectives are vague and the alternatives are difficult to define
    11. 11. Business research improves decision making• Prime managerial value of business research: it reduces uncertainty by providing information that improves the decision-making process Complete Absolute Uncertainty certainty ambiguity
    12. 12. Relationship of uncertainty and type of business researchExploratory research Descriptive research Causal research(Ambiguous problem) (Aware of partially (Clearly defined defined problem) problem)“Absenteeism is “What kind of people “Which of two trainingincreasing and we don’t favor trade programs is moreknow why.’ protectionism?” effective?”“Would people be “Did last year’s product “Can I predict the valueinterested in our new recall have an impact on of energy stocks if I knowproduct idea?” our company’s stock the current dividends and“What task conditions price?” growth rates ofinfluence the leadership “Has the average merger dividends?”process in our rate for savings and “Will buyers purchaseorganization?” loans increased in the more of our product in a past decade?” new package?”Source: Zikmund (2003)
    13. 13. Exercise: Exploratory, descriptive or causal?• Establishing the functional relationship between advertising and sales• Investigating reactions to the idea of a new method of defense budgeting• Identifying target-market demographics for a shopping center• Estimating prices for IBM stock 2 years in the future• Learning how many organizations are actively involved in just-in-time production• Learning the extent of job satisfaction in a company
    14. 14. Business research improves decision making• The decision-making process associated with the development and implementation of business strategy involves four interrelated stages: – Identifying problems or opportunities – Diagnosing and assessing problems or opportunities – Selecting and implementing a course of action – Evaluating the course of action
    15. 15. A cruise line industry study shows that although 43.6 millionAmericans have considered taking a cruise, 88 percent ofAmericans have not been on a ship.Further, business research suggests that consumers perceivecruising to be sedentary, regimented, and boring. Most peoplehave the attitude that a shipboard vacation involves sittingaround the pool, playing shuffleboard, and putting on pounds.Royal Caribbean Cruise Lines’ assessment of these findings ledto service changes and new ads showing that its ships are forthe adventurous and active. Their large ships have rock climbingwalls, jet skis, basketball courts, and more. In televisioncommercials a guest may be shown snorkeling in turquoisewaters among tropical fish that glimmer like jewels or riding in ahelicopter over majestic seas of ice.(Source: Zikmund (2003). Business Research Methods, 7e)
    16. 16. Quality of managerial decisionmaking / action depends onthe quality of informationprovided by research
    17. 17. Types of business research
    18. 18. Basic and applied researchBasic (pure) research Applied research• Intended to expand the • Undertaken to answer boundaries of knowledge questions about specific itself or to verify the problems or to make acceptability of a given decisions about a theory (Zikmund, 2003) particular course of action or policy decision (Zikmund, 2003)
    19. 19. Basic and applied business researchBasic business Applied business research research• Motivated by a desire to • Motivated by an attempt better understand some to solve a particular business related problem faced by a phenomena as it applies particular organization to all of an industry or all (Hair, et. al., 2007) of business in general (Hair, et. al, 2007)
    20. 20. Basic and applied researchBasic research Applied researchPurpose: Purpose:• Expand knowledge of processes of • Improve understanding of particular business and management business or management problem• Results in universal principles • Results in solution to problem relating to the process and its • New knowledge limited to problem relationship to outcomes • Findings of practical relevance and• Findings of significance and value to value to managers in organizations society in generalContext: Context:• Undertaken by people based in • Undertaken by people based in a universities variety of settings including• Choice of topic and objectives organizations and universities determined by the researcher • Objectives negotiated with• Flexible time scales originator • Tight time scalesSource: Saunders, et. al. (2010); Easterby-Smith, et. al. (2008); Hedrick, et. al. (1993)
    21. 21. Exercise: Basic or applied? Implications on research design?• What is the effect of • How does digital audio and technological photo managing on turbulence affect Samsung’s DVD business market share? performance?
    22. 22. Exercise: Basic or applied? Implications on research design?• What factors relate to • How will stocking consumer perceptions wines from a new of a wine’s overall French vineyard in quality? Languedoc Rousillon affect profitability of Waitrose retail outlets in the UK?
    23. 23. Exercise: Basic or applied? Implications on research design?• How would imposing • Is employee morale reduced working more related to hours rather than reductions in the downsizing affect working weeks across employee morale at the employee base or Volkswagen AG? to staff retrenchment within the German economy?
    24. 24. Exercise: Basic or applied? Implications on research design?• Does job stress affect • Can using the job performance prospective employee and satisfaction of psychological profiles male and female reduce turnover at service providers Erasmus University equally? Medical Campus?
    25. 25. Types of research studies• Reporting study – Provides a summation of data, often recasting data to achieve a deeper understanding or to generate statistics for comparison• Descriptive – Finds answers to the questions who, what, when, where, and sometimes, how; describes or defines a subject, often by creating a profile of a group of problems, people, or events• Explanatory – Attempts to explain the reasons for the phenomenon that the descriptive study only observed• Predictive – Attempts to predict when and in what situations an event will occurSource: Cooper and Schindler (2011)
    26. 26. Phases of the research process Formulating the conclusions and preparing the reportDefining the Defining the Processing andproblem new problem analyzing the data and so on Planning a Gathering research design the data Planning a sample
    27. 27. The research process• Clarifying the research question(s) – Link to management question, if applied research – Critical review of related literature (usually for basic research)• Formulation of research design – Data collection design – Sampling design – Instrument development and pilot testing• Data collection and preparation• Data analysis and interpretation• Writing of research report• Presentation of research report Source: Cooper and Schindler (2011)
    28. 28. The secret of success is to know something nobody else knows. – Aristotle OnassisManagerial value ofbusiness research By Raymund B. HabaradasManagement and Organization Department De La Salle University

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