Module 1

Business research
Research
Meaning:
 Research in common man’s language refers to “search for knowledge”
 Research is an art of scientific investigation.
 The Advanced Learner's Dictionary of Current English lays down the meaning of research
as,
a careful investigation or inquiry specially through search for new facts in any branch of
knowledge”.
It is also a systematic design, collection, analysis and reporting the findings and solutions for
problems of a company.
 Research is a structured enquiry that utilizes acceptable scientific methodology to solve
problems and create new knowledge that is generally applicable.
 Research is the systematic process of collecting and analyzing information (data) in order to
increase our understanding of the phenomenon about which we are concerned or
interested.
 Research is an art of scientific investigation. It is also a systematic design, collection,
analysis and reporting the findings and solutions for the problems of a company.
Definition:
Research can be defined as an organized and systematic study of materials and sources in order to
discover new things and establish facts and reach new conclusions. Essentially speaking, research
involves a well-developed plan, a systematic approach to develop new theories or finding solutions
to various problems.
According to Clifford Woody, “research comprises defining and refining problems, formulating
hypothesis or suggested solutions, collecting, organizing and evaluating data, making decisions and
reaching conclusions to determine whether they fit the formulating hypothesis”
Business Research
 A Systematic inquiry that provides information to guide managerial decisions.
 Systematic and objective process of gathering, recording and analyzing data for aid in
making business decisions.
Scientific Method
Scientific research is one which yields the same results when repeated by different individuals.
Techniques or procedures used to analyze empirical evidence in an attempt to confirm or disprove
prior concepts
Empirical means verifiable by observation, experimentation or experience.
 A scientific undertaking which by means of logical and systematic techniques, aims to:
1. Discover new facts or verify and test old facts.
2. Analyze their sequences, interrelationships and causal explanations.
3. Develop new scientific tools, concepts and theories, which would facilitate valid and reliable
study of human behavior.
Characteristics of Scientific Method
 Validity – Validity is the ability of a measuring instrument to measure what it is supposed
to.
 Reliability – Measurement by instruments such as thermometer can be repeated any
number of times by different individuals, but the results will be the same.

Types of research
Research can be classified on the basis of purpose, time, methodology, setting etc. however one can
broadly classify research as basic and applied research.
1. Basic research: research for the sake of enhancing knowledge is termed as basic research.
 It is also called as theoretical research
 Basic or pure or fundamental research is done with the intention of empowering the
unknown, Undertaken for the sake of knowledge without any intention to apply or
practice.
 It is primarily concerned with developing and formulating theories and
generalization.
 It addresses itself to more fundamental questions and not the problems with
immediate commercial potential.
 Not directly involved with practical problems.
 Contributions:
i. By developing principle, pure research offers solutions to many practical
problems.
ii. Helps to find critical factors in a practical problem.
iii. Develops many alternative solutions.
iv. How did the universe begin?
 What are protons, neutrons, and electrons composed of?
 What is the specific genetic code of the fruit fly?
 Example : Theory of Relativity (by Einstein)
2. Applied Research
◦ It is also termed as need based research having high practical relevance.
◦ Specific in nature, result oriented and is driven by clear aim.
◦ Undertaken to find solutions for real-life problem requiring an action or policy
decision.
◦ It may incidentally contribute to the development of theoretical knowledge.
◦ Contributions:
 Can contribute new facts about existing theories.
 Puts theories to test.
 May aid in conceptual clarification.
 Integrate previously existing theories.
Example :
 To develop a new market for the product.
 improve the energy efficiency of homes, offices, or modes of transportation
3. Qualitative Research – An unstructured, exploratory research methodology based on
small samples that provides insights and understanding of the problem setting.
 The aim is a complete, detailed description.
 Data is in the form of words, pictures or objects.
 Case studies, group interviews
4. Quantitative Research – A research methodology that seeks to quantify the data and
typically applies some form of statistical analysis.
 The aim is to classify features, count them, and construct statistical models in an
attempt to explain what is observed.
 Data is in the form of numbers and statistics.
 Experiments and surveys
5. Historical Research
 Historical study is a study of past records and data in order to understand the future
trends and development of the organization or market.
 There is no direct observation.
 Research has to depend on the conclusions or inferences drawn in the past.
  Main objective is to derive explanation and generalization from the past trends in order
to understand the present and anticipate the future.
 Example : Investors in the share market study the past records or prices of shares which
he/she intends to buy. Studying the share prices of a particular company enables the
investor to take decision whether to invest in the shares of a company.
6. Exploratory Research: this kind of research is carried out at the very beginning when the
problem is not clear or vague.
 Provides insights into and comprehension of an issue or situation.
 Often relies on secondary research such as reviewing available literature and/or data,
or qualitative approaches such as informal discussions with consumers, employees,
management or competitors and more formal approaches through in-depth interviews,
focus groups, case studies or pilot studies.
 Example : Exploring the reasons for sales decline of a product in a company.
7. Descriptive Research
 Describes data and characteristics about the population or phenomenon being studied.
 Answers the questions who, what, where, when and how.
 Describes the characteristics of the respondent in relation to a particular product. Deals
with demographic characteristics of the consumer.
 Example : Degree of viewing TV Channels, its variation with age, income level,
profession of respondent as well as time of viewing.
8. Causal Research
 Conducted to determine the cause and effect relationship between the two variables.
 Way of seeing how actions now will affect a business in the future.
 Example:
 Training and productivity of an employees
 Advertisement and sales
9. Simulation research
 This research involves the creation of an artificial environment which is very similar
to the real environment. Therefore with in the artificial environment the variables
are manipulated and studied.
 Ex: study of consumer buying behavior by giving specific amount of time and money
in a mall.
Criteria of Good Research
 Systematic- research should be structured.
 Logical- there must be logical reasoning
 Empirical- factual investigation must be possible. Its validity can be checked through
reliable sources of evidences.
 Replicable- the research conducted can be repeated any number of times and yield the
same result
 Purpose clearly defined – The purpose of the business research-the problem involved or
the decision to be made-should be clearly defined and sharply delineated in terms as
unambiguous as possible. The statement of the decision problem should include its scope,
its limitations, and the precise meanings of all words and terms significant to the research.
 Research process detailed – The research procedures used should be described in
sufficient detail to permit another researcher to repeat the research. Except when secrecy is
imposed, research reports should reveal the sources of data and the means by which they
were obtained.
 Research design thoroughly planned – The procedural design of the research should be
carefully planned to yield results that are as objective as possible. A survey of opinions or
 recollections ought not to be used when more reliable evidence is available from
documentary sources or by direct observation.
 High ethical standards applied – Ethical issues in research reflect important moral
concerns about the practice of responsible behavior in society. A research design that
includes safeguards against causing mental or physical harm to participants and makes data
integrity a first priority should be highly valued.
 Limitations frankly revealed – The researcher should report, with complete frankness,
flaws in procedural design and estimate their effect on the findings.
 Analysis adequate for decision maker’s needs- Analysis of the data should be extensive
enough to reveal its significance, what managers call “insights”. The methods of analysis
used should be appropriate
 Findings presented unambiguously – Language that is restrained, clear, and precise;
assertions that are carefully drawn and hedged with appropriate reservations; and an
apparent effort to achieve maximum objectivity tend to leave a favorable impression of the
researcher with the decision maker.
 Conclusions justified – Conclusions should be limited to those for which the data provide
an adequate basis. Good researchers always specify the conditions under which their
conclusions seem to be valid.
RESEARCH PROCESS
1. DISCOVERING THE PROBLEM AREA: to start with a research, one needs to discover the
problem which needs solution. Any researcher is pretty sure of the subject on which to conduct
his research, but the exact problem area may remain exclusive.
The best way to identify the problem would be to look for an unresolved query, a gap in the
existing knowledge or an unfulfilled need within the chosen subject. The researcher should
take care that the problem should be the one which can be clearly defined and formulated.
Further while choosing the research area, the researcher should look into the availability of
information relevant to the topic. Mere availability is not enough. It must be accessible.
2. LITERATURE REVIEW: it involves a comprehensive review of published and unpublished work
from the secondary sources of data available in the relevant area of study.
Literature review helps the researcher in 2 ways
 Specifying his research in a meaningful context
 It would provide him with an insight into the methods and techniques adopted for
handling such problems
3. PROBLEM DEFINITION: initially the focus of the problem is ambiguously defined. However
after the literature review, the researcher is in a position to formulate problem clearly. A
problem well formulated alone yield fruitful results. It is a clear, precise and concise statement
of the matter that is to be investigated.
4. DEVELOPING A WORKING HYPOTHESIS: hypothesis is a tentative hypothesis regarding a
solution to the problem under study.
Hypothesis is a predictive statement which is made in the light of available facts relating to
the problem under study.
The type of data to be collected and the tools of analysis are influenced by the hypothesis.
Ex: a study conducted to find out the amount of research investment being done by the
companies will have the following hypothesis.
H0: companies invest 1% of their sales revenue in research activities(null hypothesis)
H1: companies invest less than 1% of their sales revenue in research activities(alternative
hypothesis)
5. RESEARCH PROPOSAL: it is a brief summary outlining the objectives of study and the modus
operandi of conducting the research.
In case of thesis, the research proposal are in the form of synopsis stating
  Research objectives
 Proposed methodology of research
 Benefits of study
 Detailed bibliography
In case of government or business organizations, in addition to the above information there are
other details like
 Researcher’s qualification
 Time and cost schedule
 Resources and special facilities required during the research.
Essentially they contain an executive summary in the beginning stating the objectives of study and
benefits derived thereon.
6. RESEARCH DESIGN: it outlines the conditions for collection and analysis of data. The what,
when, where, how much and the method of data collection are detailed in the research design. It
will specially contain information about:
 Sampling design
 Data collection design
 Instrument design
Sampling design: the plan devised to draw a sample is termed as sampling design. A sampling
design will include a decision on the
 Sampling unit
 Sampling technique
 Sample size
Data collection design: the method of gathering data is planned in data collection design.
Briefly speaking, some of the data collection techniques available to researcher are
 Questionnaire
 Interview
 Observation
Instrument design: instrument designing schedule or the questionnaire the researcher would
use to collect data. The researcher while designing the questionnaire must think in terms of
 Type of data
 Communication approach
 Question structure
 Question wording etc
7. DATA COLLECTION
This involves sending questionnaire to respondents, training field workers in interview and
observation methods and making them to collect necessary data.
8. DATA ANALYSIS
All the data gathered in the previous step has no meaning till the time it is not subject to data
analysis.
Processing of raw data will yield some kind of relevant information. Data analysis is concerned
with reducing the bulk of accumulated data to a manageable size.
Generally speaking, it involves the following procedures:
 Editing
 Coding
 Tabulation
 Statistical analysis
9. HYPOTHESIS TESTING
There are various parametric and non-parametric tests like z-test, t-test, f-test etc
 Hypothesis testing helps a researcher to establish if the difference between values is due to
chance or actual.
10. DATA INTERPRETATION AND GENERALISATION(finding out meaning)
Researcher can use inductive or deductive approach. After the data is been analysed and tested
repeatedly for arriving at conclusive results, generalizations are made to build new theory.
11. REPORTING OF RESULTS
The last step is concerned with bringing in public the results of the research so that the design
can be put to some use.
Format of the report
Preliminary section
Title of the report, table of contents, list of tables, graphs, preface and an executive summary
Main text
Problem background, research objectives, research methodology, importance of conducting
research and the conclusion arrived thereof.
End section
Appendices supporting the research items like questionnaire, schedule used etc and
bibliography.
 discover the problem
area

literature review

define and formulate

the problem

develop a working
hypothesis

stop
research proposal

Pilot testing research design

Draw
sample

data collection
Instrument
revision

data analysis

hypothesis testing

data interpretation
and generalisations

reporting of results
Management problem
When a problem has been clearly and accurately identified can a research project be conducted
properly. It is a concise description of the issues that need to be addressed by a problem solving
team and should be presented to them (or created by them) before they try to solve the problem. It
asks what the decision maker needs to do. Mostly action oriented and Focuses on symptoms.

Defining the research problem

The research problem is a general statement of an issue meriting research. Its nature will suggest
appropriate forms for its investigation
Problem definition involves stating the general marketing research problem and identifying its
specific components. Only when research problem has been clearly defined can research be
designed and conducted properly.
Management Problem vs Research Problem

Management Problem involves “what needs to be done?”

Research Problem involves “what information needs to be provided and how can the information
is obtained”. It refers to some difficulty an organization faces and wishes to obtain solution for the
same.

Basis of comparison Management problem Research problem

Nature Asks what the Decision Makers Asks what information needed
needs to do and how it can be obtained
Orientation Action Oriented Information oriented
Focus Focuses on Symptoms Focuses on underlying causes
Common errors Problem definition is too broad Problem definition is too
narrow
example Should a new product be To determine consumer
introduced preferences and purchase
intentions for the proposed
new product
example Should the advertising To determine the effectiveness
campaign be changed of the current advertising
campaign
example Should the price of the brand To determine the price
be increased elasticity of the demand and
the impact on sales and profits
of various levels of price
changes

Formulating the research Hypothesis

A good hypothesis relates and explains the known facts. It should also predict new facts. It must be
stated in such a way that we can test it by experimentation or further observation, or it is of no
scientific value. Also, it must stated in a way that would allow us to show if it is incorrect, i.e., it
must be "falsifiable." A scientist must be willing to accept the possibility that his or her hypothesis
is incorrect, and this point often separates true science from pseudoscience. (In fact, most scientists
work hard to develop good hypotheses, and then spend a great deal of effort trying to disprove
them. Pseudo scientists tend to settle on a hypothesis that suits their needs or expectations, and
then spend a great deal of effort trying to prove that they are "true".
Developing the research proposals
Research proposal is outline, a draft plan of a research work proposed by the researcher. It is also
termed as synopsis. It contains
 A statement of the problem
 The proposed methodology
 The benefits of the research
 The reasons required to conduct the research
Contents of research proposal
The research proposal contents differ depending on the type of proposal and intended audience.
1. Problem statement
2. Research objectives
3. Literature review
4. Importance/ benefits of study
5. Research design
6. Data analysis
7. Nature and form of results
8. Schedule
9. Facilities and special resources
10. Bibliography
11. Appendices
12. Measurement instrument

Research design formulation

A research design is a framework or blueprint for conducting the marketing research project. It
details the procedures necessary for obtaining the required information, and its purpose is to
design a study that will test the hypotheses of interest, determine possible answers to the research
questions, and provide the information needed for decision making. Decisions are also made
regarding what data should be obtained from the respondents (e,g,, by conducting a survey or an
experiment). A questionnaire and sampling plan also are designed in order to select the most
appropriate respondents for the study. The following steps are involved in formulating a research
design:
– Secondary data analysis (based on secondary research)
– Qualitative research
– Methods of collecting quantitative data (survey, observation, and experimentation)
– Definition of the information needed
– Measurement and scaling procedures
– Questionnaire design
– Sampling process and sample size
– Plan of data analysis

Sampling design
Sampling is a means of selecting a subset of units from a target population for the purpose of
collecting information. This information is used to draw inferences about the population as a whole.
The subset of units that are selected is called a sample. The sample design encompasses all aspects
of how to group units on the frame, determine the sample size, allocate the sample to the various
classifications of frame units, and finally, select the sample. Choices in sample design are influenced
by many factors, including the desired level of precision and detail of the information to be
produced, the availability of appropriate sampling frames, the availability of suitable auxiliary
variables for stratification and sample election, the estimation methods that will be used and the
available budget in terms of time and resources.

Planning and collecting the data for research

Data collection is the process of gathering and measuring information on variables of interest, in an
established systematic fashion that enables one to answer stated research questions, test
hypotheses, and evaluate outcomes. Generally there are three types of data collection and they are
1.Surveys: Standardized paper-and-pencil or phone questionnaires that ask predetermined
questions.
2. Interviews: Structured or unstructured one-on-one directed conversations with key individuals
or leaders in a community.
3. Focus groups: Structured interviews with small groups of like individuals using standardized
questions, follow-up questions, and exploration of other topics that arise to better understand
participants
Data analysis and interpretation
Analysis of data is a process of inspecting, cleaning, transforming, and modeling data with the goal
of discovering useful information, suggesting conclusions, and supporting decision-making. Data
analysis has multiple facets and approaches, encompassing diverse techniques under a variety of
names, in different business, science, and social science domains.

Literature review
It involves a comprehensive review of published and unpublished work from the secondary sources
of data available in the relevant area of study.
Importance of literature review:
1. Identification of problem for the study
2. Monitors the repetition
3. Helps avoiding mistakes
4. Creates appropriate theoretical structure
5. Facilitates interpretation of study

RESEARCH APPLICATION IN BUSINESS DECISION

Businesses use research to ascertain the success of their advertising. For instance, a dairy
manufacturer may want to find out what percentage of the people saw its latest TV commercial. The
dairy manufacturer may find that more individuals become aware of its advertising the longer the
TV ad runs. The company may decide to run its TV ads at different times if few people have seen the
ads.

A business can make well-informed decisions due to research. In the research process, the
business will be able to acquire details about key business areas, analyze it, create a strategy and
distribute business information. Reports, presented to the top management, often contain details
on consumer and employee preferences and all the available channels for sales, marketing, finance
and production. Management makes use of these details to determine the best strategy.

Research is a necessity at all stages and phases of business operations. Initial research is needed
to evaluate whether getting into the given kind of business would be profitable and whether there
exists demand for the proposed product.
 Regarding the staff, a correctly carried out research can uncover important details on their
satisfaction quotient, the difficulties experienced by them and how the problems related to
relationships at the workplace could be handled. An analysis into the results would allow the
management to bring about changes for the all round effective functioning of the organization and
its employees. The workers can be trained and coached in line with the needs. This would help
personal as well as professional development improving overall organizational performance.

Research is important for managerial decision making. All strategic business areas are
analyzed and evaluated; then techniques for more efficient procedures are created. Through proper
research, the organization will be able to pick the most effective, productive and profitable one.

Research could possibly be applied to marketing, production, finance, IT and Human resources.

Research can answer questions for various problems, from getting a grip on industry trends,
identifying new products to produce and deliver to the market, or deciding on which site to locate
an outlet, to better understanding what it needs to fulfill customer demands. Research can also help
evaluate if a product is accepted in the market. Research aids expansion into new markets.

Research helps in testing the potential success of new products. Businesses have to
understand what kinds of products consumers would like before they market them. For instance, a
restaurant may in the beginning, interview focus groups to test types of burgers. The focus groups
will probably include small teams of consumers. The goal of the focus group may be to figure out
which burger customers prefer. Ultimately, the company may test the burgers through surveys with
larger groups of people. The above points state the importance of research in business decision
making. Research is necessary to gather facts and statistics with regards to a company’s customers,
employees and competitors. Based on these numbers, businesses are able to make better
managerial decisions.

New Knowledge: The fascination and desire for new knowledge, new facts for business cycles,
environment analysis and technological up gradation are the primary reasons of research.

Research assists the company to find the right supplier at the right price and at the right time.
An appropriate supplier choice makes it possible for the company to obtain or acquire top quality
raw materials which result into production of good quality items which are consumed by the end
user.