Business

Research Chetna Chauhan

Methods FORE School of Management

New Delhi

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Part 1. Introduction

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Agenda

Why managers
Define business Applied versus basic
should know about
research research
research?

Internal versus How to apply

Role of ethics in
external research knowledge gained
business research
teams from research

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What is research?
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Managers Investors Customers

What is Research?
Finding solutions to a problem after a thorough
study and analysis of the situational factors
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Buy a new car Invest in business Change your phone

Examples of Research
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Business Research

HELPS A MANAGER TO GOOD DECISION: PROBLEM BAD DECISION: PROBLEM GOOD DECISIONS VS WHY SOME MANAGERS END
MAKE DECISIONS AT THE IS SOLVED PERSISTS COMMITTING BLUNDERS: UP IN MAKING WRONG
WORKPLACE “DECISION‐MAKING DECISIONS?
PROCESS”

Business research is the application of the scientific method in searching for the truth about business
phenomena.

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Why some managers end up in making wrong
decisions?

What types of information

Where exactly the What are the relevant
are to be gathered and
problem lies? factors in the situation?
how?

How to draw appropriate How to implement the

How to make use of the
conclusions to make the results of this process to
information?
right decisions? solve the problem?

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 Business research
 Systematic and organized effort
 Investigates a specific problem encountered in the work setting
 A problem which demands a solution
 Series of steps that are designed and executed
 Goal of finding answers to the issues that are of concern

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 Step 1. What are the problem areas?

Step 2. Identify as clearly and specifically as possible

the problems that need to be studied and resolved

Step 3. Determine the factors that are associated

Research process with the problem

Step 4. Gather information, analyse the data, develop

an explanation for the problem

Step 5. Communicate findings and implications

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Trust?

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Functions of Business Research
• Foundational—answers basic questions. What business should we be
in?
• Testing—addresses things like new product concepts or promotional
ideas. How effective will they be?
• Issues—examines how specific issues impact the firm, such as
organizational structure.
• Performance—which metrics are critical in real-time management
and what insights can be gained from “what-if” analyses of policy
changes?

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 Organized

Systematic

Business Data‐based

Research
Critical and Objective
should be
Inquiry or investigation

Purpose is to find answers/solutions

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Which of the following statements is correct?
a) Business Research is about information gathering from books and internet
b) Business Research is about making existing knowledge more accessible
c) Business Research is about transporting facts from one resource to another
d) All of the above
e) None of the above

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Applied Business Research Vs Basic (Pure) Business Research

Applied Business research is conducted to address a specific business decision

for a specific firm or organization.
Example:
• Should McDonald’s add Italian pasta dinners to its menu?

Basic business research conducted without a specific decision in mind that

usually does not address the needs of a specific organization
Example:
• Does employee tenure with a company influence productivity?

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Determining When to Conduct Business
Research

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 What is scientific research?

Managerial
decisions
Solving problems and pursues a step‐by‐step
logical, organized, and rigorous method to
identify the problems, gather data, analyse
them, and draw valid conclusions from them

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 Scientific research

IT IS NOT BASED IT IS PURPOSIVE IT HELPS TO STATE MORE OBJECTIVE HIGHLIGHT THE

ON HUNCHES, AND RIGOROUS THEIR FINDINGS THAN SUBJECTIVE MOST CRITICAL
EXPERIENCE, AND WITH ACCURACY FACTORS AT THE
INTUITION AND CONFIDENCE WORKPLACE (TO
BE FIXED)

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Managerial decision making

Scientific
Scientific research: Simple problem:
investigation +
Basic Vs. Applied Past-experience may
managerial decision
research be enough
making = KEY!

Complex problem: Problems related to Error of judgement

scientific budget, resources is common! Richard
investigation is and expertise: Branson, Steve
undertaken Reliance on hunches Jobs…

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Commitment? Commitment?

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HALLMARKS OF SCIENTIFIC
RESEARCH

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 Purposiveness
Rigor
HALLMAR
Testability
KS OF
SCIENTIFI Replicability
C Precision and confidence
RESEARC Objectivity
H Generalizability
Parsimony

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Purposiveness

Research has purposive focus

 Definite aim or purpose
 Ex. Focus is on increasing the
commitment towards organisation?
 What are the benefits?
 Lower turnover and less absenteeism?
 Increased performance level?

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 Rigor
 Good theoretical base and a sound methodological design
 Carefulness and Precision
 Ask employees: What would increase their level of
commitment?
 Makes decision based on the responses of 5-10 employees
 Investigation is not scientific: Lacks rigor (conclusions are
incorrect)
 Representativeness is important!
 Reduce bias and incorrection in responses

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 Define hypotheses (or hypothesis)
Example, employee commitment can be
strengthened
Testability Factor A and Factor B share a positive
correlation with each other?
Test it using empirical data
Hypotheses are derived from theory or prior
research
Scientific hypothesis must be testable
Hypothesis that God created the earth?

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 Replicability
Replicability means high trust and faith
Replicability: Similar results on employing the same method in other
settings
 Replication: not just supported merely by chance, but are reflective
of the true state of affairs in the population
Results are supported again and yet again, when the same type of
research is repeated in similar circumstances

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 “Definitive” conclusions are not possible

We are unable to study the universe of

items, events, or population
Precision
Concern: May not reflect the exact
and characteristics of the phenomenon
confidence Measurement errors and other
problems (context) are bound to occur
We have to ensure that our findings are
as close to reality
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 Precision means closeness of the findings to
“reality”
Degree of accuracy or exactitude of the
Precision results
Confidence refers to the probability that our
and estimations are correct
confidence Only precision is not enough - we also need
confidence
Confidence interval in statistics ~
Remember?

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 95% confidence level means?

5% probability that the findings may not

Confidence be correct

Interval?
Significance level of 0.05 (p = 0.05)

Greater the precision and confidence =

More scientific is the investigation

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Objectivity (1/2)

Interpretation of the results of data analysis should be objective

Should be based on the facts of the findings derived from actual data
Own subjective or emotional values should not bias the findings
If hypothesis on organizational commitment is not supported, then why
focus on increased opportunities for employee participation?
Factual, data‐based research findings, but on the subjective opinion
If researcher’s convictions are so strong than no need to do research

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Objectivity (2/2)

If wrong
solutions/policies Employees still kept
Remained absent?
are implemented, quitting
then ?

Did not develop Increased pay is Increased pay

any sense of not going to system will only
commitment to the increase the job drag down the
organization? satisfaction? company financially
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 Scope of applicability of the research findings in
one organizational setting to other settings

Wider applicability = greater usefulness and value

Generalizabilit Organizational commitment IS same in

y manufacturing, industrial, and service organizations

More elaborate sampling is REQUIRED

Limited applicability does not mean LOW value

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Parsimony

Simplicity in explaining the phenomena or problems = Generating solutions

Complex research frameworks that consider an unmanageable number of factors

Two or three specific variables in the work situation are identified which would raise
the organizational commitment (48%)

Ten different variables to increase organizational commitment by 48%.

Meaningful and parsimonious, rather than an elaborate and cumbersome

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Some important terminologies

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Theory
Theory
• A formal, logical explanation of some events that includes predictions or how
things relate to one another.
Goals of Theory
• Understanding
• Predicting

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Research Concepts
Concept (or construct)
A generalized idea about a class of objects, attributes, occurrences or process
that has been given a name.
Examples:
 leadership
 morale
 gross domestic product
 assets
 customer satisfaction
 market share

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Ladder of Abstraction of Concepts

Abstract Level
The level of knowledge expressing a concept that exists only as an idea or a quality apart
from an object.
Empirical Level
The level of knowledge that is verifiable by experience or observation.
Latent Construct
A concept that is not directly observable or measurable, but can be estimated through proxy
measures.

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Concepts are Abstractions of Reality

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Research Propositions and Hypotheses
• Propositions
• Statements explaining the logical linkage among certain concepts by asserting
a universal connection between concepts.
• Example: Treating employees better will make them more loyal employees.
• Hypothesis
• Formal statement of an unproven proposition that is empirically testable.
• Example: Giving employees one Friday off each month will result in lower employee
turnover.

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Information, Data, and Intelligence
• Data
• Facts or recorded measures of certain phenomena (things or events).
• Information
• Data formatted (structured) to support decision making or define the
relationship between two facts.
• Market intelligence
• The subset of data and information that actually has some explanatory power
enabling effective decisions to be made.

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Products purchased are recorded by the
scanner forming data.

Inventory systems use the data to create

information.
The information tells managers what items
need to be stocked.
The information also generates and can
even place orders for more products to be
trucked to the store.

Analysts analyze the data statistically and write research reports

addressing important questions such as:
What types of trends exist in customer purchases, and are there
regional differences?
Where should new stores be located?

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Which one is more reliable?

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Decision Support system

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Sources of Input for Decision Support Systems

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Types of Business Research Methods

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 Building theory VS. theory testing

Both theory and information are important

Role of theory Theory: an idea or hunch about a phenomenon?

and information
Theory: can be concept, instrument, model, or
framework

Theory explains a phenomenon in a wide range of

settings

Theory may generate testable predictions

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Theory of social norms
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 Technology
Acceptance Theory

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Theory of Planner
Behavior

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 Consumer decision making

Customer satisfaction and loyalty

Market segmentation

Business Creating a competitive advantage

research in Product image

marketing
Advertising and sales promotion

Pricing

New product development

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Business Research in HRM
Performance

Absenteeism

Turnover

Job satisfaction

Loyalty

Organizational commitment

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The Business Research Process: An
Overview

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Important terms in business research process
• Business opportunity
• A situation that makes some potential competitive advantage possible.
• Business problem
• A situation that makes some significant negative consequence more likely.
• Symptoms
• Observable cues that serve as a signal of a problem because they are caused
by that problem.

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Situations Affecting Decision Making

Certainty Uncertainty Ambiguity

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Describing Decision-Making Situations

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Types of Business Research

Exploratory Descriptive

Causal
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The Spurious Effect of Ice Cream

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Degrees of Causality
• Absolute Causality
• The cause is necessary and sufficient to bring about the effect.
• Conditional Causality
• A cause is necessary but not sufficient to bring about an effect.
• Contributory Causality
• A cause need be neither necessary nor sufficient to bring about an effect.
• Weakest form of causality.

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Experiments
• Experiment
• A carefully controlled study in which the researcher manipulates a proposed cause and
observes any corresponding change in the proposed effect.
• Experimental variable
• Represents the proposed cause and is controlled by the researcher by manipulating it.
• Manipulation
• The researcher alters the level of the variable in specific increments.
• Test-market
• An experiment that is conducted within actual market conditions.

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Example of Experiment

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Characteristics of Different Types of Business Research

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