Why Study Business Research?

Business research plays an important role in an environment that emphasizes measurement. Return on
investment (ROI) is the calculation of the financial return for all business expenditures and it is emphasized
more now than ever before. Business research expenditures are increasingly scrutinized for their
contribution to ROMI.
Research Should Help Respond to Change
Business Research
A process of determining, acquiring, analyzing, synthesizing, and disseminating relevant business data,
information, and insights to decision makers in ways that mobilize the organization to take appropriate
business actions that, in turn, maximize business Performance
The primary purpose of research is to reduce the level of risk of a marketing decision
Whats Changing in Business that Influences Research?

Several factors increase the relevance for studying

business research.

Information overload. While the Internet and

its search engines present extensive amounts of
information, its quality and credibility must be
continuously evaluated. The ubiquitous access to
information has brought about the development of
knowledge communities and the need for organizations
to leverage this knowledge universe for innovationor
risk merely drowning in data. Stakeholders now have
more information at their disposal and are more
resistant to business stimuli.

Technological
connectivity.
Individuals,
public sector organizations, and businesses are adapting to changes in work patterns (real-time and
global), changes in the formation of relationships and communities, and the realization that geography is no
longer a primary constraint.
Shifting global centers of economic activity and competition. The rising economic power of Asia and
demographic shifts within regions highlight the need for organizations to expand their knowledge of
consumers, suppliers, talent pools, business models, and infrastructures with which they are less familiar.
Increasingly critical scrutiny of big business. The availability of information has made it possible for all a
firms stakeholders to demand inclusion in company decision making, while at the same time elevating the
level of societal suspicion.
More government intervention. As public-sector activities increase in order to provide some minimal or
enhanced level of social services, governments are becoming increasingly aggressive in protecting their
various constituencies by posing restrictions on the use of managerial and business research tools.
Battle for analytical talent. Managers face progressively complex decisions, applying mathematical
models to extract meaningful knowledge from volumes of data and using highly sophisticated software to
run their organizations. The shift to knowledge-intensive industries puts greater demand on a scarcity of
well-trained talent with advanced analytical skills.
Computing Power and Speed. Lower cost data collection, better visualization tools, more computational
power, more and faster integration of data, and real-time access to knowledge are now manager
expectationsnot wistful visions of a distant future.
New Perspectives on Established Research Methodologies. Older tools and methodologies, once
limited to exploratory research, are gaining wider acceptance in dealing with a wider range of managerial
problems.

Business Planning Drives Business Research

An organizations mission drives its business goals, strategies, and tactics
and, consequently, its need for business decision support systems and
business intelligence. Students need to understand the differences in
these concepts to fully understand what drives a manager to seek
solutions through research.

Research Should Reduce Risk

The primary purpose of research is to reduce the level of risk of a marketing decision
Selecting business strategies and tactics often drive research.
A business strategy is defined as the general approach an organization will follow to achieve its business
goals. A strategy might describe how an organization can best position itself to fulfill customer needs or
establish a general approach to gaining brand equity. Haagen-Daz positioned itself with its super-premium
ice-cream strategy.
Business tactics are specific, timed activities that execute a business strategy. Haagen-Daz designed its
ice-cream to be rich and creamy with flavors like Peanut Butter Fudge Chunk. It packaged the ice cream
in pint size containers with signature gold and burgundy colors. It distributes the ice cream in grocery
stores and franchised stores.
Information Sources
When elements of data are organized for retrieval, they collectively constitute a business decision support
system (DSS). This data is often shared over an intranet or an extranet.
An intranet is a private network that is contained within an enterprise and is not available to the public at
large. It may consist of many interlinked local area networks. It typically includes connections through one
or more computers to the Internet. The main purpose of an intranet is to share company information and
computing resources among internal audiences.
An extranet is a private network that uses the Internet protocols and the public telecommunication system
to share an organizations information, data, or operations with external suppliers, vendors, or customers.
An extranet can be viewed as the external portion of a companys intranet.
A business intelligence system (BIS) is designed to provide ongoing information about events and
trends in the technological, economic, political and legal, demographic, cultural, social, and competitive
areas.
Exhibit 1-1 shows some sources of business intelligence.
Sources of government information include
speeches by elected officials, recordings of public
proceedings, press releases, and agency websites.
Sources of competitive information include
presentations at conferences, literature searches, press
releases, syndicated industry studies, web sites, clipping
services, and business research.

Sources of economic information include literature

searches and government reports.

Sources of cultural and social information include

syndicated studies, public opinion organizations, business research, and government reports.
Sources of technological information include patent filings, web sites, syndicated industry studies,
presentations at conferences, literature searches, and clipping services.
Sources of demographic information include syndicated studies, government reports, and business
research
Hierarchy of Business Decision Makers

Exhibit 1-2 illustrates the hierarchy of business decision

makers.
In the bottom tier, most decisions are based on past
experience or instinct.
Decisions are also supported with secondary data searches.
In the middle tier, some decisions are based on
business research.
In the top tier, every decision is guided by business
research. Firms develop proprietary methodologies and are
innovative in their combination of methodologies. There is
access to research data and findings throughout the organization.
Business research is only valuable when it helps management make better decisions. A study may
be interesting, but if it does not help improve decision-making, its use should be questioned. Research
could be appropriate for some problems, but insufficient resources may limit usefulness.

Computers and telecommunications lowered the costs of data collection.

Data management is now possible and necessary given the quantity of raw data.
Models reflect the behavior of individuals, households, and industries.
A DSS integrates data management techniques, models, and analytical tools to support decision making.
Data must be more than timely and standardized; it must be meaningful.
These are all characteristics of the information value chain.

Minute Main and Business Research

Minute Maid is an example of a top-tier research organization.

Ask students: Why?
Business research is only valuable when it helps
management make better decisions. A study may be
interesting, but if it does not help improve decision-making, its
use should be questioned. Research could be appropriate for
some problems, but insufficient resources may limit usefulness.
Categories of Research

Applied research applies research to discovering solutions

for immediate problems or opportunities.
Basic (or pure) research aims to solve perplexing questions
or obtain new knowledge of an experimental or theoretical nature that has little direct or immediate
impact on action, performance, or policy decisions.

Characteristics of Good Research

Information Value Chain

Computers and
telecommunications lowered the costs of data collection.

Data management
is now possible and necessary given the quantity of raw data.

Models reflect the

behavior of individuals, households, and industries.

A DSS integrates
data management techniques, models, and analytical tools to
support decision making.

Data must be
more than timely and standardized; it must be meaningful.

These are all

characteristics of the information value chain.

Types of Studies
Reporting studies provide a summation of data, often recasting data to achieve a deeper understanding
or to generate statistics for comparison.
A descriptive study tries to discover answers to the questions who, what, when, where, and, sometimes,
how.
An explanatory study attempts to explain the reasons for the phenomenon that the descriptive study only
observed
A predictive study attempts to predict when and in what situations an event will occur. Studies may also
be described as applied research or basic research.

What Are Research Ethics?

Ethics are norms or standards of behavior that guide moral choices about our behavior and our
relationships with others. The goal is to ensure that no one is harmed or suffers adverse consequences
from research activities.
Ethical Treatment of Participants
Research must be designed so that a participant does not suffer physical harm, discomfort, pain,
embarrassment, or loss of privacy. This slide lists the three guidelines researchers should follow to protect
participants.
When discussing benefits, the researcher should be careful not to overstate or understate the benefits.
Informed consent means that the participant has given full consent to participation after receiving full
disclosure of the procedures of the proposed study.
Components of an Informed Consent
Identify researchers
Describe survey topic
Describe target sample
Identify sponsor
Describe purpose of research
Promise anonymity and confidentiality
State participation is voluntary
State item-non response is acceptable
Ask for permission
Characteristics of Informed Consent
Since 1966, all projects with federal funding are required to be reviewed by an Institutional Review Board
(IRB). An IRB evaluates the risks and benefits of proposed research. The review requirement may be more
relaxed for projects that are unlikely to be risky such as marketing research projects. Many institutions
require that all research whether funded or unfunded by the federal government be reviewed by a local
IRB.
The IRBs concentrate on two areas. First is the guarantee of obtaining complete, informed consent from
participants. The second is the risk assessment and benefit analysis review.
Complete informed consent has four characteristics and these are named in the slide.
1. The participant must be competent to give consent.
2. Consent must be voluntary, and free from coercion.
3. Participants must be adequately informed to make a decision.
4. Participants should know the possible risks or outcomes associated with the research.
Special consideration is necessary when researching the behavior and attitudes of children. Besides providing
informed consent, parents are often interviewed during the selection process to ensure that the child is mature
enough and has the verbal and physical capabilities necessary.
Deception

Disguising non-research activities

Camouflaging true research objectives

Since 1966, all projects with federal funding are required to be reviewed by an Institutional Review Board
(IRB). An IRB evaluates the risks and benefits of proposed research. The review requirement may be more
relaxed for projects that are unlikely to be risky such as marketing research projects. Many institutions
require that all research whether funded or unfunded by the federal government be reviewed by a local
IRB.
The IRBs concentrate on two areas.
First is the guarantee of obtaining complete, informed consent from participants.
The second is the risk assessment and benefit analysis review.

1)
2)
3)
4)

Complete informed consent has four characteristics and these are named in the slide.
The participant must be competent to give consent.
Consent must be voluntary, and free from coercion.
Participants must be adequately informed to make a decision.
Participants should know the possible risks or outcomes associated with the research.

Participants Confidentiality
All individuals have a right to privacy, and researchers must respect that right. Once a guarantee of
confidentiality is given, protecting that confidentiality is essential. Researchers protect participant
confidentiality in several ways.
Obtaining signed nondisclosure documents only researchers who have signed nondisclosure forms
should be allowed access to the data.
Restricting access to participant identification.
Revealing participant information only with written consent.
Restricting access to data instruments where the participant is identified.
Nondisclosure of data subsets.
Methods 2-5 deal with minimizing the chance for a participant to identified and matched with his or her
responses. Links between data and identifying information must be minimized. Interview response sheets
should be inaccessible to everyone except the editors and data entry personnel. Data collection
instruments may be destroyed once data are in a data file. For very small groups, data should not be made
available if it would be easy to pinpoint a person in the group.
Right to Privacy means the right to refuse, prior permission to interview, limit time required
Occasionally, researchers may be asked by sponsors to participate in unethical behavior. What can the
researcher do to remain ethical? The researcher can attempt to:
1. educate the sponsor to the purpose of the research,
2. explain the researchers role as a fact-finder,
3. explain how distorting the truth or breaking faith will lead to future problems, and
4. if the others fail, terminate the relationship
Effective Codes of Ethics
Many organizations have codes of ethics. A code of ethics is an organizations codified set of norms or
standards of behavior that guide moral choices about research behavior. Effective codes are those that
1) are regulative,
2) protect the public interest and the interests of the profession served by the code,
3) are behavior-specific, and
4) are enforceable.
Several terms are used by researchers to converse about applied and theoretical business problems.
A concept is a bundle of meanings or characteristics associated with certain concrete, unambiguous
events, objects, conditions, or situations.
o We must attempt to measure concepts in a clear manner that others can understand. If concepts
are not clearly conceptualized and measured, we will receive confusing answers.
A construct is a definition specifically invented to represent an abstract phenomena for a given research
project.
A conceptual scheme is the interrelationship between concepts and constructs.

Exhibit 3-1 illustrates some of the concepts and constructs

relevant to job redesign. The concepts at the bottom of the exhibit
(format accuracy, manuscript errors, and keyboarding speed) are
the most concrete and easily measured. Keyboarding speed is
one just concept in the group that defines a construct that the
human resource analyst calls Presentation Quality. It is not directly
observable like keyboarding speed. It is a term used to
communicate (a label) the combination of meanings presented by
the three concepts.
Concepts at the next level are vocabulary, syntax, and spelling. As
they are related, the analyst groups them into a construct she calls
language skill. Language skills is placed at a higher level of

abstraction in the exhibit because two of the concepts that comprise it, vocabulary and syntax, are more
difficult to observe and measure.
The construct of job interest is not yet measured nor are its components specified. Researchers often refer to
such constructs as hypothetical constructs because they are inferred only from the datathey are presumed to
exist but no measure tests whether such constructs actually exist.
If research shows the concepts and constructs in this example to be interrelated, and if the connections can be
supported, then the analyst has the beginning of a conceptual scheme.
An operational definition defines a variable in terms
of specific measurement and testing criteria

A variable is used as a synonym for the construct

being studied. In practice, the term variable is used as a
synonym for the property being studied. In this context, a
variable is a symbol of an event, act, characteristic, trait, or
attribute that can be measured and to which we assign
categorical values. The different types of variables are
presented on the following slides.
For the purposes of data entry and analysis, we assign
numerical values to a variable based on that variables
properties. Dichotomous variables have only two values
that reflect the absence or presence of a property. Variables
also take on values representing added categories such as
demographic variables. All such variables are said to be
discrete since only certain values are possible. Continuous
variables take on values within a given range or, in some
cases, an infinite set.
An independent variable is the variable manipulated by the
researcher to cause an effect on the dependent variable.
The dependent variable is the variable expected to be
affected by the manipulation of an independent variable.

Moderating variables are variables that are

believed to have a significant contributory or
contingent effect on the originally stated IV-DV
relationship. Whether a variable is treated as an
independent or as a moderating variable depends on
the hypothesis.

Extraneous variables are variables that could

conceivably affect a given relationship. Some can be
treated as independent or moderating variables or
assumed or excluded from the study. If an extraneous
variable might confound the study, the extraneous
variable may be introduced as a control variable to
help interpret the relationship between variables.
An intervening variable (IVV) is a factor that affects
the observed phenomenon but cannot be measured or
manipulated. It is a conceptual mechanism through
which the IV and MV might affect the DV.
A proposition is a statement about observable
phenomena that may be judged as true or false.

 A hypothesis is a proposition formulated for empirical testing.

o A descriptive hypothesis is a statement about the existence, size, form, or distribution of a
variable. Researchers often use a
research question rather than a
descriptive hypothesis. .
o Descriptive hypotheses encourage
researchers to crystallize their thinking
about the likely relationships.
o Descriptive hypotheses encourage
researchers to think about the
implications of a supported or rejected
finding.
o Descriptive hypotheses are useful for
testing statistical significance.
A relational hypothesis is a statement
about the relationship between two
variables with respect to some case.
Relational hypotheses may be
correlational or explanatory (causal).
A correlational hypothesis is a statement indicating that variables occur together in some
specified manner without implying that one causes the other.
A causal hypothesis is a statement that describes a relationship between two variables in which
one variable leads to a specified effect on the other variable.
Role of Hypotheses
(1) Guide the direction of the study
(2) Identify relevant facts
(3) Suggest most appropriate research
(4) Provide framework for organizing
Characteristics of Strong Hypothesis
(1) Adequate
(2) Testable
(3) Better than rivals
A theory is a set of systematically interrelated concepts, definitions, and propositions that are advanced to
explain or predict phenomena.
o What is the difference between theories and hypotheses?
o Theories tend to be complex, abstract, and involve multiple variables.
o Hypotheses tend to be simple, limited-variable statements involving concrete instances.
o A theory is a set of systematically interrelated concepts, definitions, and propositions that are
advanced to explain or predict phenomena. To the degree that our theories are sound and fit the
situation, we are successful in our explanations and predictions.
A model is a re presentation of a system constructed to study some aspects of that system.
Business models are developed through the use of inductive and deductive reasoning.
As illustrated in Exhibit 3-7, a business model may originate from empirical observations about market
behavior based on researched facts and relationships among variables.
Inductive reasoning allows the modeller to draw conclusions from the facts or evidence in planning the
dynamics of the model. The modeller may also use existing theory, managerial experience or judgment,
or facts.
A model is a representation of a system constructed to study some aspect of that system or the system
as a whole.
Models versus Theories
a models role is to represent or describe
A theorys role is to explain.
Models in business research may be descriptive, predictive, and normative.
Descriptive models are used for complex systems because they allow for the visualization of numerous
variables and relationships.
Predictive models forecast future events and facilitate business planning.
Normative models are used for control, because they indicate necessary actions.

Models allow researchers to specify hypotheses that characterize present or future conditions: the
effect of advertising on consumer awareness or intention to purchase, brand switching behavior, an
employee training program, or other aspects of business.

Good business research is based on sound reasoning because reasoning is essential for producing
scientific results. This slide introduces the scientific method and its essential tenets. The scientific method
guides our approach to problem-solving.
An important term in the list is empirical. Empirical testing denotes observations and propositions
based on sensory experiences and/or derived from such experience by methods of inductive logic,
including mathematics and statistics. Researchers using this approach attempt to describe, explain,
and make predictions by relying on information gained through observation.
The scientific method is described as a puzzle-solving activity.
The steps followed by business researchers to approach a problem
Encounter problems
State problems
Propose hypotheses
Deduce outcomes
Formulate rival hypotheses
Devise and conduct empirical tests
Draw conclusions
Exposition consists of statements that describe without attempting to explain.
Argument allows us to explain, interpret, defend, challenge, and explore meaning. There are two types
of argument: deduction and induction.
Deduction is a form of reasoning in which the conclusion must necessarily follow from the premises
given. The next slide provides an example of a deductive argument.
Induction is a form of reasoning that draws a conclusion from one or more particular facts or pieces of
evidence.
Induction and deduction can be used together in research reasoning. Induction occurs when we
observe a fact and ask, Why is this? In answer to this question, we advance a tentative explanation or
hypothesis. The hypothesis is plausible if it explains the event or condition (fact) that prompted the
question. Deduction is the process by which we test whether the hypothesis is capable of explaining the
fact.