The document discusses the managerial value of business research. It defines research and different types including basic and applied business research. Business research is important as it facilitates identifying issues, gathering relevant information, and analyzing data to help decision-making. Research reduces uncertainty and improves decision-making by providing information to identify problems, diagnose issues, select and implement solutions, and evaluate actions. The quality of decisions depends on the quality of research information.

1. The secret of success is to know
something nobody else knows.
– Aristotle Onassis
Managerial value of
business research
By Raymund B. Habaradas
Management and Organization Department
De La Salle University

2. What is your idea
of research?

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. 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. 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 / Leadership
Managing resources Setting direction Managing relationships
(Creating a vision; anticipating (Balancing / reconciling
(Allocating resources)
and exploiting opportunities) diverse interests)

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. Research and
decision making

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. 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. 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. 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. Relationship of uncertainty and
type of business research
Exploratory research Descriptive research Causal research
(Ambiguous problem) (Aware of partially (Clearly defined
defined problem) problem)
“Absenteeism is “What kind of people “Which of two training
increasing and we don’t favor trade programs is more
know why.’ protectionism?” effective?”
“Would people be “Did last year’s product “Can I predict the value
interested in our new recall have an impact on of energy stocks if I know
product idea?” our company’s stock the current dividends and
“What task conditions price?” growth rates of
influence the leadership “Has the average merger dividends?”
process in our rate for savings and “Will buyers purchase
organization?” loans increased in the more of our product in a
past decade?” new package?”
Source: Zikmund (2003)

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. 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. A cruise line industry study shows that although 43.6 million
Americans have considered taking a cruise, 88 percent of
Americans have not been on a ship.
Further, business research suggests that consumers perceive
cruising to be sedentary, regimented, and boring. Most people
have the attitude that a shipboard vacation involves sitting
around the pool, playing shuffleboard, and putting on pounds.
Royal Caribbean Cruise Lines’ assessment of these findings led
to service changes and new ads showing that its ships are for
the adventurous and active. Their large ships have rock climbing
walls, jet skis, basketball courts, and more. In television
commercials a guest may be shown snorkeling in turquoise
waters among tropical fish that glimmer like jewels or riding in a
helicopter over majestic seas of ice.
(Source: Zikmund (2003). Business Research Methods, 7e)

16. Quality of managerial decision
making / action depends on
the quality of information
provided by research

17. Types of business
research

18. Basic and applied research
Basic (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. Basic and applied
business research
Basic 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. Basic and applied research
Basic research Applied research
Purpose: 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 general
Context: 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 scales
Source: Saunders, et. al. (2010); Easterby-Smith, et. al. (2008); Hedrick, et. al. (1993)

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. 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. 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. 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. 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 occur
Source: Cooper and Schindler (2011)

26. Phases of the research process
Formulating the
conclusions and
preparing the report
Defining the Defining the Processing and
problem new problem analyzing the data
and so on
Planning a Gathering
research design the data
Planning
a sample

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. The secret of success is to know
something nobody else knows.
– Aristotle Onassis
Managerial value of
business research
By Raymund B. Habaradas
Management and Organization Department
De La Salle University