RM1.ppt

29 August 2005 MBA III (Research Methodology) Course Instructor: Dr. Aurangzeb Z. Khan 1
RESEARCH
METHODOLOGY
(Business Research Methods)
Week 1

• To acquaint course participants with all salient aspects of research methodology in
accordance with the current body of scientific literature on this challenging, interesting
and indepensible area of management science
• To show that the subject of research methodology has matured into a substantive
body of knowledge, an indepth understanding of which is crucial for ensuring the
success of commercial or non-commercial organizations
• To show and encourage the course participants that the theoretical knowledge
acquired in this course can - with the appropriate context-related modifications - be
applied to numerous real-life situations in business, public-sector and non-profit
enterprises
• To stimulate interest in the business research field as a prospective career field
Fundamental Course Objectives

Course Highlights
• Introduction to research
methodology
• Research Terminology and the
Scientific Method
• Designing and implementing a
research project
• Ethics in Research
• Types of Research
• Measurements in Research
• Primary and Secondary Data
• Analyzing primary and
secondary data (quantitative
techniques)
• Communicating Research
Results
• Undertaking Research Project
by the course participants

What is Business Research?
• Business Research may be defined as the
“systematic and objective process of gathering,
recording and analyzing data for aid in making
business decisions” (Zikmund, Business Research
Methods, 2002, p. 6)
• Systematicness and Objectivity are its
distinguishing features of Business Research,
which is important tool for managers and
decision-makers in corporate and non-corporate
organizations

When is Business Research Used?
Typically, business research methods are
used in situations of uncertainty, that is,
when decision-makers face two or more
courses of action and seek to select the
best possible alternative under the
circumstances. Business Research is
hence aimed at improving the quality of
decision-making which, in turn, benefits
the organization and helps ensure its
continuity and efficiency

Typical Users of Business Research Methods
• Businesses and Corporations
• Public-Sector Agencies
• Consulting Firms
• Research Institutes
• Non-Governmental Organizations
• Non-Profit Organizations
• Independent Researchers and Consultants

Common Business Research Methods &
Techniques
• Surveys
• Interviews
• Observation
• Experiments
• Archival and Historical Data
• Qualitative Analysis
• Quantitative Analysis

General Business Conditions and
Corporate Research
• Short- & Long-Range Forecasting,
• Business and Industry Trends
• Global Environments
• Inflation and Pricing
• Plant and Warehouse Location
• Acquisitions
Financial and Accounting Research
• Forecasts of financial interest rate
trends,
• Stock,bond and commodity value
predictions
• capital formation alternatives
• mergers and acquisitions
• risk-return trade-offs
• portfolio analysis
• impact of taxes
• research on financial institutions
• expected rate of return
• capital asset pricing models
• credit risk
• cost analysis
Fields Where Business Research is Often Used – (1)
Management and Organizational
Behaviour 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
• Market Potentials
• Market Share
• Market segmentation
• Market characteristics
• Sales Analysis
• Establishment of sales quotas
• Distribution channels
• New product concepts
• Test markets
• Advertising research
• Buyer behaviour
• Customer satisfaction
• Website visitation rates
Information Systems Research
• Knowledge and information needs
assessment
• Computer information system use and
evaluation
• Technical suppot satisfaction
• Database analysis
• Data mining
• Enterprise resource planning systems
• Customer relationship management
systems
Corporate Responsibility Research
• Ecological Impact
• Legal Constraints on advertising and
promotion
• Sex, age and racial discrimination /
worker equity
• Social values and ethics
Fields Where Business Research is Often Used – (2)

Selected Examples of Real-Life Situations in
Which Business Research Methods are Used
 A firm wants to produce and market a new product but first wants to
ascertain if 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
country after determining its technical and economic feasibility
 A government agency wants to ascertain the satisfaction level of its
employees, the causes for any possible discontent, and propose a scheme
for enhancing this level
 A financial institution wants to invest in commodities and commissions a
study to determine the past trends and forecast future returns in a portfolio
of commodities
 The CEO of a firm wants to undertake a SWOT-Analysis as part of his plan
to redefine his organization’s priorities

Basic and Applied Research
Basic Research aims to expand the frontiers of science and knowledge by
verifying or disproving the acceptability of a given theory or attempting to
discover more about a certain concept (non-specificity)
Example: How does motivation affect employee performance?
Applied Research focusses on a real-life problem or situation with a view
to helping reach a decision how to deal with it (Specificity)
Example: Should Corporation X adopt a paperless office environment?

Science and the Scientific Method
Science has been defined as “the methodological and
systematic approach to acquisition of new knowledge”
(Geoffrey Marcyzk, David DeMatteo, David Festinger, Essentials of
Research Design and Methodology, John Wiley & Sons, 2005, p. 4)
The scientific method, which has evolved since the 13th
century, concerns the set of tools, techniques and
procedures used by basic and applied researchers to
analyze and understand phenomena and prove or
disprove prior conceptions

The Essence of the Scientific Method
Characteristics of the Scientific Method
Objectivity
Systematic Analysis
Logical Interpretation of Results
Elements of the
Scientific Method
Empirical Approach
Observations
Questions
Hypotheses
Experiments
Analysis
Conclusion
Replication
Basic
Research
Applied
Research
Scientific
Method
Information or
Ideas for alternative
Courses of action
General Laws

The Value of Business Research for Managers – (1)
Reduction of uncertainty and improvement in
the quality of decision-making with several
consequent advantages (e.g. strategic,
operational) and benefits for organizations
Business Research Methods can be employed
in each of the following four stages:
(1) Identification of problems and/or opportunities
Useful for strategy planning, analysis of internal and
external organizational environment

(2) Diagnosing and Assessment of problems and/or
opportunities
Its purpose is to gain insight into the underlying
reasons and causes for the situation. If there is a
problem, it asks what happened and why? If there is
an opportunity, it seeks to explore, clarify and refine
the nature of the opportunity and, in the case of
multiple opportunities, seeks to set priorities
(3) Selection and Implementation of Courses of Action
After alternative courses of action have been
determined, selection of the best possible course.

An important consideration is the quality of
forecasting which is an essential tool of research
(4) Evaluating the Course of Action
Business Research Methods are used after a course
of action has been implemented in order to
determine whether activities have been properly
implemented and have accomplished what they
intended to do

Evaluation Research – It is the formal objective
measurement and evaluation of the extent which an
activity, project or programme has achieved its goal, and
the factors which influence performance (e.g. audits). It is
also the formal objective measurement and evaluation of
the extent to which on-going activities, projects or
programmes are meeting their goals (performance-
monitoring research)
Examples of performance-monitoring research:
(1) Are railway passengers satisfied with the level of
service the railway company is providing? If not, then
research may need to be undertaken to ascertain the
reasons for customer dissatisfaction and propose
corrective measures

(2) What are the trends in retail and wholesale sector?
Can research suggest new ways to improve efficiency
in purchase transactions?

When Should Business Research be Undertaken?
Is sufficient time
available?
Is information
inadequate?
High importance
of decision?
Research benefits
greater than costs?
Yes
Yes
Yes
Undertake Business Research
NO Do not
undertake Business Research

Value and Costs of Undertaking Business
Research
VALUE
Decreased Uncertainty
Higher Likelihood of
Correct Decisions
Better Business
performance
Higher Profits
Better Reputation
COSTS
Research Costs
Delay in Making
Business Decisions
Disclosure of
Information to Rivals
Possibility of Error

The Building Blocks of Research
Measurements of phenomena
(e.g. sales statistics of a department store)
DATA
Determination of relationship amongst data with a
view to facilitating understanding of the phenomena,
their relationships and decision-making
(e.g. past and predicted future sales trends)
INFORMATION
KNOWLEDGE
Blend of information, experience and in-sights that
provides a framework that can be thoughtfully evaluated
when assessing new information or evaluating
relevant 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 Systems
A Global Information System may be defined as “ an
organized collection of computer hardware,
communication equipment, software, data, and
personnel designed to capture, store, update,
manipulate, analyze, and immediately display
information about worldwide business activities”
A Global Information System is a tool for providing past,
current and projected information on internal operations
and external activity. It organizes and integrates data
from production, operations, marketing, finance,
accounting and other business functions
(Zikmund, p. 22)

Decision-Support System
• A computer-based system that helps decision makers
confront problems through direct interaction with
databases and analytical software programs
• The purpose of a decision support system is to store
data and transform them into organized information that
is easily accessible to decision-makers
• Decision-Support Systems are integrated in Global
Information Systems. They are aimed usually for
assisting managers and decision-makers in specific
organizational business units (e.g. divisions,
departments and functional areas) by providing
organized and adaptable information

Databases & Software
• Databases are collections of raw data which
have been arranged in a logical manner and
which can be stored and processed
electronically
• Software are programmes that allow complex
operations to be undertaken on data and which
give information for managers and decision-
makers
• Data Warehousing & Data Mining

Data and Information Sources for Business
Researchers – (1)
 Internal Records
Example: Data about costs, shipments, inventory, sales, and other aspects
of regular operations which are collected from various functional areas of an
organization
 Proprietary Business Research
Example: New data and information from projects which are undertaken ad
hoc to study specific company problems
 Business intelligence Systems
Example: Information about nonrecurring developments in the external
business environment stemming from a network of sources and regular
procedures

Researchers – (2)
 On-Line Databases
Examples: PROQUEST, INFOTRAC, DIALOG, LEXIS-NEXIS, Dow Jones
News Retrieval Services, CompuStat
 Internet
Examples: World Wide Web search engines (Google, Yahoo, Altavista,
Lycos, Excite etc.)
 All Other Sources
Examples: Research Institutions, Libraries, Books, Journals, Periodicals,
Newspapers, Chambers of Commerce and Industry

Business Research in the International Context
Business Research is being increasingly applied in an international
context in the wake of globalization and the consequent freedom of
movement of the resources of labour, capital and information of
businesses and corporations:
• Overseas market potential
• Joint ventures and relocating production lines overseas
• Framework considerations for investment and trade (e.g. culture,
legal environment, security, physical infrastructure, availability and
quality of human resources, logistics, political stability, trade and
investment incentives)

Researchers
• Federal and provincial ministries of commerce, industries and production
• Federal, provincial and city Chambers of Commerce and Industry
• Central Bank of the Republic of Turkey, The Banks Association of Turkey,
TUIK, Local and foreign banking institutions
• Stock Exchanges
• National Investment Board
• Export Promotion Bureau
• Manufacturers, Traders and Exporters Associations
• Research Institutes
• Newspapers and Magazines
• Business and Trade Directories
• Internet

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