The Role of Business Research

41
Business Research Methods Hussain A. Al Awami, B.Sc. Pharm., M.Sc., MBA

Transcript of The Role of Business Research

Page 1: The Role of Business Research

Business

Research Methods

Hussain A. Al Awami, B.Sc. Pharm., M.Sc., MBA

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Chapter 1:

The Role of Business Research

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Learning Objectives• Understand the value of research as source of

information.

• Importance of business research as a management decision-making tool.

• Define business research.

• Difference between basic and applied research.

• Managerial value of business research

• Topics of business research.

• Business research and globalization.

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Sources of human knowledge

• Tradition

• Authority

• Trial & error

• Logical thought processes

• Scientific research

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Tradition

• Common foundation of accepted practice

• Used or normal practice

• Efficient (no need for effort)

• May never been evaluated for their validity

• By nature its interferes with the ability to

perceive alternatives

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Authority

• Expertise opinion

• Fast and easy

• Assumptions or knowledge are

unchallenged

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Experience and trials and error

• Functional source of knowledge

• Individual experience is restricted; difficult

to generalize

• Same experience might be perceived

differently by two individuals

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Trial and Error

• Alternatives are tried successively until we

find one that answers our question or solve

our problem

• Means of securing knowledge

• Inefficient

• Unsystematic

• unrecorded

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Logical thought processes

• Method of knowing combines experience,

intellectual faculties, and formal system of

thought.

• Inductive reasoning• From specific observations to generalizations

• Deductive reasoning• From general principle to specific prediction

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Scientific Approach

Systematic investigations

• Uses inductive and/or deductive with other

parameters

• Much better in quality

• Self evaluation capability

• Checks and balances

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Scope of business research

• Any research in business field!

• With broader definition: non-profit

organizations

• Non business organizations

• Business research help in decision making

• Could have a title of “marketing researcher”

or “organizational researcher” etc.

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Business research is defined as the

systematic and objective process of

generating information for aid in

making business decisions.

Business Research Defined

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Key words in the definition

• Literally, research (re-search) -“search

again”

• Systematic

• Objective

• Decision making

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Basic research

Applied research

Business Research Types

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Basic Research

• Attempts to expand the limits of knowledge.

• Not directly involved in the solution to a

pragmatic problem.

• To test theory or to discover more about a

concept.

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Basic Research Example

• Is executive success correlated with high

need for achievement?

• Are members of highly cohesive work

groups more satisfied than members of less

cohesive work groups?

• Do consumers experience cognitive

dissonance in low-involvement situations?

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Applied Research

• Conducted when a decision must be made

about a specific real-life problem

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Applied Research Examples

• Should McDonalds add Italian pasta dinners

to its menu?

– Business research told McDonald’s it should

not?

• Should Procter & Gamble add a high-priced

home teeth bleaching kit to its product line?

– Research showed Crest Whitestrips would sell

well at a retail price of $44

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Scientific Method

• The analysis and interpretation of empirical

evidence (facts from observation or

experimentation) to confirm or disprove

prior conceptions.

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Managerial value of business

research

• Identifying problems and opportunities

• Diagnosis and assessment

• Selecting and implementing a course of

action

• Evaluating the course of action

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Identifying problems or opportunities

• Identify nature of the problem

• Scan the market

• Examples:

– Dividend of the stock

– Airline reservation clerk

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Diagnosing and assessing problems

or opportunities• Gain more insight

• Set priorities

• Quantitative and/or qualitative

investigations

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Selecting and implementing a course

of action• Evaluating alternatives

– Fax machine manufacture

• Proper forecast

• Effective implementation

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Evaluating the course of action

• Provide tool to:

– Planned activities properly executed

– Accomplished what expected

• Feedback for evaluation and control

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Evaluation Research

• Evaluation research is the formal, objective

measurement and appraisal of the extent to

which a given activity, project, or program

has achieved its objectives.

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Performance-monitoring

Research• Research that regularly provides feedback

for evaluation and control

• Indicates things are or are not going as planned

• Research may be required to explain why something “went wrong”

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Total Quality Management (TQM)• A business philosophy that embodies the

belief that the management process must

focus on integrating customer-driven

quality throughout the organization.

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TQM, continue• Continuous improvement.

• Improve durability and enhance features.

• Managers strive to improve competitiveness.

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Determining When to Conduct

Business Research• Not feasible for all decisions

• Factors:

– Time constraints

– Availability of data

– Nature of the decision

– Benefits versus costs

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Is sufficient time

available before

a managerial

decision

must be made?

Is the infor-

mation already

on hand

inadequate

for making

the decision?

Is the decision

of considerable

strategic

or tactical

importance?

Does the value

of the research

information

exceed the cost

of conducting

research?

Conducting

Business

Research

Do Not Conduct Business Research

Time ConstraintsAvailability

of DataNature of the

Decision

Benefits

vs. Costs

Yes

No No

Determining When to Conduct

Business Research

No No

Yes Yes Yes

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Value

•Increased certainty

•Increased likelihood of a correct decision

•Improved business

performance and resulting higher

profits

Costs

•Research

expenditures

•Delay of business

decision and possible disclosure

of information to

rivals•Possible erroneous

research results

Value Should Exceed

Estimated Costs

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Major Topics for Research in

Business• General Business Conditions and Corporate

Research

• Financial and Accounting Research

• Management and Organizational Behavior

Research

• Sales and Marketing Research

• Information Systems Research

• Corporate Responsibility Research

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Cross-functional Teams• Cross-functional teams are composed of

individuals from various organizational

departments such as engineering,

production, finance, and marketing who

share a common purpose.

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Business Research in the 21st

Century

• Increased globalization

• Growth of the Internet and other

information technologies

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Global Research

• Business Research is increasingly global

• Market knowledge is essential

• A.C. Nielsen - more that 67% international

business

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Global Business Research, continue

• General information about country -

economic conditions and political climate

• Cultural and consumer factors

• Market and competitive conditions -

demand estimation

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The Internet

Is Transforming Society• Time is collapsing.

• Distance is no longer an obstacle.

• Crossing oceans is only a mouse click

away.

• People are connected 24 hours a day, seven

days a week.

• "Instantaneous" has a new meaning.

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End of chapter 1