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The Role of Business

Research

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publicly accessible website,
©2013 in whole
Cengage or in part.
Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Business Research Defined
• Business research is the application of the
scientific method in searching for the truth
about business phenomena.
• The process includes:
• idea and theory development
• problem definition
• searching for and collecting information
• analyzing data
• communicating the findings and their
implications

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 Business Research Defined
• This definition suggests that business
research information is:
• not intuitive or haphazardly gathered
• accurate and objective
• relevant to all aspects of the business
• limited by one’s definition of business
• Not-for-profit organizations and
governmental agencies can use research in
much the same was as managers in for-
profit organizations.

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 Applied and Basic Business Research
• Applied business research
• conducted to address a specific business
decision for a specific firm or organization.
• Example:
◗ Should McDonald’s add Italian pasta dinners to its
menu?
◗ Which health insurance plan should a business
provide for its employees?

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 Applied and Basic Business Research
• Basic business research (also called pure
research)
• conducted without a specific decision in mind that
usually does not address the needs of a specific
organization.
◗ Attempts to expand the limits of knowledge in general.
◗ Not aimed at solving a pragmatic problem.
• Example:
◗ Do consumers experience cognitive dissonance in low-
involvement situations?
◗ Does employee tenure with a company influence
productivity?

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 The Scientific Method
• Scientific Method
• The way researchers go about using knowledge
and evidence to reach objective conclusions
about the real world.
• The analysis and interpretation of empirical
evidence (facts from observation or
experimentation) to confirm or disprove prior
conceptions

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 EXHIBIT 1.1 A Summary of the Scientific Method

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 Managerial Value of Business Research
• There are only a few business
orientations:
• Product-oriented
• Production-oriented
• Marketing-oriented

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 Managerial Value of Business Research
• The decision-making process associated
with the development and
implementation of a business strategy
involves four interrelated stages:
1. Identifying problems and opportunities
2. Diagnosing and assessing problems or
opportunities
3. Selecting and implementing a course of
action
4. Evaluating the course of action

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 Evaluating the Course of Actions
• Evaluation Research
• The formal, objective measurement and
appraisal of the extent a given activity, project,
or program has achieved its objectives.
• Performance Monitoring Research
• Research that regularly, sometimes routinely,
provides feedback for evaluation and control of
business activity.

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 When is Business Research Needed?
• The determination of the need for research
centers on:
1. Time constraints
2. The availability of data
3. The nature of the decision to be made
4. Benefits versus costs (the value of the research
information in relation to costs)
◗ Will the payoff or rate of return be worth the
investment?
◗ Will the information improve the quality of the
managerial decision enough to warrant the
expenditure?
◗ Is the expenditure the best use of the available
funds?

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 Business Research in the 21st Century
• Communication Technologies
• Always “connected”—time, place, and distance
are irrelevant.
• Decreases in information acquisition, storage,
access, and transmission costs.

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 Business Research in the 21st Century
• Global Business Research
• Business research is increasingly global.
• Must understand the nature of particular
markets.
• Cross-validation
◗ Verify that the empirical findings from one culture
also exist and behave similarly in another culture.

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