Week I

Business Research
 How This Course Will Be
Conducted
• Comprehensive introduction to Research Methodology
(Business Research Methods)
• Knowledge acquisition and application of subject matter to real-
life situations
• Course literature (see the „must read“ section)
• Use of multimedia visual aids (MS PowerPoint slides)
• Reference to case studies when desirable
• Encouragement of questions, comments and constructive
criticism from course participants
• Analytical and critical thinking, inquisitiveness as well as
common sense from course participants also expected
 Fundamental Course Objectives

• To acquaint course participants with all salient aspects of research methodology in

accordance with the current body of scientific literature on this challenging, interesting
and indepensible area of management science

• To show that the subject of research methodology has matured into a substantive body of
knowledge, an indepth understanding of which is crucial for ensuring the success of
commercial or non-commercial organizations

• To show and encourage the course participants that the theoretical knowledge acquired
in this course can - with the appropriate context-related modifications - be applied to
numerous real-life situations in business, public-sector and non-profit enterprises

• To stimulate interest in the business research field as a prospective career field

 Demands on Course Participants
The essence of knowledge is having it to apply it - Confucius

 Acquisition and careful application of knowledge

 Analytical and critical thinking, innovation, inquisitiveness
 Holistic perspective

 Quizzes & (proof that the course participant is familar

with the essentials Sessionals of research
methodology)

Project Work (each course participant is expected to show

that he or she is able to apply the research skills learned in
this course)
Important Information for Course Participants – (1)

 You MUST read the course literature from the beginning of the semester.
Relying on the PowerPoint slides is NOT sufficient! The purpose of these
slides is to provide you with a broad and general introduction to research
methodology. Kindly note that the slides are intended as a supplement to,
and NOT as a substitute for the prescribed course literature

 The prescribed course literature will be used as a reference for the quizzes,
sessionals and final examination. Failure to read and understand the course
literature could mean that a course participant will fail the course! An
automatic passing grade in this course is NOT guaranteed, rather, a course
participant‘s marks will reflect his or her effort and performance in the
subject
 Important Information for Course Participants – (2)

 The project work to be undertaken in this course will be chosen by the student
the course instructor and must be undertaken by the course participant
according to the project guidelines which will be distributed in paper form
seperately. It is essential that primary data is collected, analysed, evaluated
and recorded by the course participant in his or her project report. Plagiarism
will NOT be tolerated! If caught, zero marks will be given

 Specific questions on the subject of research methodology may be asked from

candidates in the Viva oral examination at the end of their programme. Failure
to answer these questions will definitely result in a deduction of examination
marks
 Course Highlights I
• Introduction to research methodology

• Research Terminology and the Scientific

Method

• Designing and implementing a research

project

• Types of Research

• Research Process

• Measurements in Research
 Course Highlights II

• Primary and Secondary Data

• Analyzing primary and secondary data

(quantitative techniques)

• Communicating Research Results

• Undertaking Research Project by the course

participants
 Business Research Defined

Business research is defined as the

systematic and objective process of
gathering, recording and analyzing
data for aid in making business
decisions.
 Business Research
• Research information is neither intuitive nor
haphazardly gathered.
• Literally, research (re-search) -“search again”
• Business research must be objective
• Detached and impersonal rather than biased
• It facilitates the managerial decision process
for all aspects of a business.
 I don’t know
if we
Information should
offer on-site
Reduces child care?

Uncertainty
 BUSINESS RESEARCH
• Research in Accounting deals with budget
control systems, practices, and procedures. It also
deals with inventory costing methods, accelerated
depreciation, time series behavior of quarterly
earnings, transfer pricing, cash recovery rates and
taxation methods etc.

• Research in Finance deals in operations of

financial institution, optimum financial ratios,
mergers and acquisitions, leverage buyouts, inter-
corporate financing, yields on mortgages, the
behavior of stock exchanges etc.
• Research in Management deals in the study of
employees attitudes and behavior, human resource
management, impact of changing demographics
on management practices, production operation
management, strategy formulations, information
systems etc.

Research in Marketing deals with product

image, advertising, sales promotion, distribution,
packaging, pricing, after sale service, consumer
preferences, new product development etc.
 Why Study Research?
• Research provides you with the knowledge
and skills needed for the fast-paced
decision-making environment
Business Research Types

Basic research

Applied research
 Basic Research
• Attempts to expand the limits of
knowledge.
• Not directly involved in the solution to a
pragmatic problem.
 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?
 Applied Research
• Conducted when a decision must be made
about a specific real-life problem
 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
 Managers and Research
• Identify and solve small problems in the work setting.

• Know how to discriminate good from bad research.

• Appreciate and constantly remember the multiple influences and

multiple effects of factors impinging on a situation.

• Take calculated risk in decision making, knowing full well the

probabilities attached to the different/possible outcomes.

• Prevent possible vested interests from operating in a situation.

• Relate to hired researchers and consultants more effectively

 Scientific Method
• Techniques or procedures used to analyze
empirical evidence (facts from observation
or experimentation) in an attempt to
confirm or disprove prior conceptions.
"The secret of success is to know something
nobody else knows. "
Aristotle Onassis
 The Hallmarks Of Scientific Research

• Purposivness
• Rigor
• Testability
• Replicability
• Precision and Confidence
• Objectivity
• Generalizability
• Parsimony
Purposivness
The research should start with a definite aim or purpose. The focus
here is on increasing the commitment of employees to the
organization, which will help the organization in many ways.

Rigor
A good theoretical base and a sound methodology design would add
rigor to a purposivness study. Rigor connotes carefulness,
scrupulousness, and the degree of exactitude in research
investigations. Rigorous research involves a good theory base and
carefully thought-out methodology.

Testability
The researchers develops certain hypotheses on how employees
commitment to the organization can be enhanced, then these
hypotheses can be tested by applying certain statistical tests to the data
collected for the purpose. The test would indicate whether the
hypothesis is accepted or rejected.
 Replicability

The results of the tests of hypotheses should be supported again and again
when the research is replicated in other similar organizations. To the extent
results are replicated or repeated we have confidence in our research being
scientific.

Precision and Confidence

Precision refers to how close the findings based on a sample are to ‘reality’.
In other words, precision reflects the degree of exactitude of the results based
on the sample, to the phenomena studied as they exist in the universe. The
term confidence interval in the statistics is referred as precision.

• Confidence refers to the possibility that our estimates are correct i.e., it is
merely not enough to be precise, but it also important that we can say that 95
percent of the time, we are going to find our results to be true and there is
only 5 percent chance of our being. This is also know as confidence level
and some refer to it as accuracy.
Objectivity
The conclusions drawn through the interpretation of results of our data
analysis should be objective, that is, they should be based on the facts
resulting from the actual data and not on our own subjective or emotional
values. The more objective the interpretation of the data, the more scientific
the research investigation becomes.

Generalizability
Generalizability refers to the scope of applicability of the research findings in
one organizational setting to other settings. The wider the range of
applicability of the solutions generated by research, the more useful the
research is to the users of such research, the greater its usefulness and value.

Parsimony

Simplicity in explaining the phenomena or problems that occur, and in the

applicability of solutions to problems, is always preferred to complex research
frameworks that unmanageable number of factors.
 The Building Blocks of Science in Research

Observation Identification
of problem
area

Theoretical
Refinement of theory framework
(pure research) Or
Or Network of
Implementation Associations
(applied research)

Interpre Hypotheses
tation
of data

Constructs,
Analysis of Concepts,
data Data Research
collection Operational
Design
definition
 Managerial Value of BR
The Decision-making Process
Associated with the Development
and Implementation of a Strategy
• Identifying problems and opportunities
• Diagnosis and assessment
• Selecting and implementing a course of
action
• Evaluating the course of action
The Value of Business Research for Managers – (1)

Reduction of uncertainty and improvement in the quality

of decision-making with several consequent
advantages (e.g. strategic, operational) and benefits
for organizations

Business Research Methods can be employed in each

of the following four stages:

(1) Identification of problems and/or opportunities

Useful for strategy planning, analysis of internal and
external organizational environment
The Value of Business Research for Managers – (2)

(2) Diagnosing and Assessment of problems and/or opportunities

Its purpose is to gain insight into the underlying reasons and

causes for the situation. If there is a problem, it asks what
happened and why? If there is an opportunity, it seeks to
explore, clarify and refine the nature of the opportunity and, in
the case of multiple opportunities, seeks to set priorities

(3) Selection and Implementation of Courses of Action

After alternative courses of action have been determined,

selection of the best possible course.
The Value of Business Research for Managers – (3)

An important consideration is the quality of

forecasting which is an essential tool of research

(4) Evaluating the Course of Action

Business Research Methods are used after a course

of action has been implemented in order to
determine whether activities have been properly
implemented and have accomplished what they
intended to do
The Value of Business Research for Managers – (4)

Evaluation Research – It is the formal objective measurement and

evaluation of the extent which an activity, project or programme
has achieved its goal, and the factors which influence
performance (e.g. audits). It is also the formal objective
measurement and evaluation of the extent to which on-going
activities, projects or programmes are meeting their goals
(performance-monitoring research)

Examples of performance-monitoring research:

(1) Are railway passengers satisfied with the level of service the
railway company is providing? If not, then research may
need to be undertaken to ascertain the reasons for customer
dissatisfaction and propose corrective measures
The Value of Business Research for Managers – (5)
TQM

• A business philosophy that embodies the belief that

the management process must focus on integrating
customer-driven quality throughout the organization.
• Stresses continuous improvement of product quality
and service.
• Managers improve durability and enhance features as
the product ages.
• Managers strive to improve delivery and other
services to keep their companies competitive
 When Should Business Research be Undertaken?
Is sufficient time
available?

Yes

Is information
inadequate? NO Do not
undertake Business Research
Yes

High importance
of decision?

Yes

Research benefits
greater than costs? Undertake Business Research
Value and Costs of Undertaking Business Research

VALUE
COSTS

Decreased Uncertainty Research Costs

Higher Likelihood of Delay in Making
Correct Decisions Business Decisions
Better Business Disclosure of
performance Information to Rivals
Higher Profits Possibility of Error
Better Reputation
 Typical Users of Business Research
Methods

• Businesses and Corporations

• Public-Sector Agencies
• Consulting Firms
• Research Institutes
• Non-Governmental Organizations
• Non-Profit Organizations
• Independent Researchers and Consultants
 Common Business Research Methods &
Techniques

• Surveys
• Interviews
• Observation
• Experiments
• Archival and Historical Data
• Qualitative Analysis
• Quantitative Analysis
 Fields Where Business Research is Often
Used

General Business Conditions and

Corporate Research

• Short- & Long-Range Forecasting,

• Business and Industry Trends
• Global Environments
• Inflation and Pricing
• Plant and Warehouse Location
• Acquisitions
 Management and Organizational
Behaviour Research

• Total Quality Management

• Morale and Job Satisfaction
• Leadership Style
• Employee Productivity
• Organizational Effectiveness
• Structural ssues
• Absenteeism and turnover
• Organizational Climate
 Financial and Accounting Research

• Forecasts of financial interest rate trends,

• Stock,bond and commodity value predictions
• capital formation alternatives
• mergers and acquisitions
• risk-return trade-offs
• portfolio analysis
• impact of taxes
• research on financial institutions
• expected rate of return
• capital asset pricing models
• credit risk
• cost analysis
 Sales and Marketing Research

• Market Potentials
• Market Share
• Market segmentation
• Market characteristics
• Sales Analysis
• Establishment of sales quotas
• Distribution channels
• New product concepts
• Test markets
• Advertising research
• Buyer behaviour
• Customer satisfaction
• Website visitation rates
 Information Systems Research
• Knowledge and information needs assessment
• Computer information system use and evaluation
• Technical suppot satisfaction
• Database analysis
• Data mining
• Enterprise resource planning systems
• Customer relationship management systems

Corporate Responsibility Research

• Ecological Impact
• Legal Constraints on advertising and promotion
• Sex, age and racial discrimination / worker equity
• Social values and ethics
 Selected Examples of Real-Life Situations in
Which Business Research Methods are Used
 A firm wants to produce and market a new product but first wants to ascertain
if there is a potential consumer demand for this product in markets x,y and z
 a multinational firm wants to establish a production facility in another country
after determining its technical and economic feasibility
 A government agency wants to ascertain the satisfaction level of its
employees, the causes for any possible discontent, and propose a scheme for
enhancing this level
 A financial institution wants to invest in commodities and commissions a
study to determine the past trends and forecast future returns in a portfolio of
commodities
 The CEO of a firm wants to undertake a SWOT-Analysis as part of his plan to
redefine his organization’s priorities
Business Research in the International Context

Business Research is being increasingly applied in an

international context in the wake of globalization and the
consequent freedom of movement of the resources of labour,
capital and information of businesses and corporations:

• Overseas market potential

• Joint ventures and relocating production lines overseas
• Framework considerations for investment and trade (e.g.
culture, legal environment, security, physical infrastructure,
availability and quality of human resources, logistics, political
stability, trade and investment incentives)
Data and Information Sources for Business
Researchers (1)
 Internal Records

Example: Data about costs, shipments, inventory, sales, and other aspects of regular
operations which are collected from various functional areas of an organization

 Proprietary Business Research

Example: New data and information from projects which are undertaken ad hoc to study
specific company problems

 Business intelligence Systems

Example: Information about nonrecurring developments in the external business

environment stemming from a network of sources and regular procedures
Data and Information Sources for Business
Researchers (2)
 On-Line Databases

Examples: PROQUEST, INFOTRAC, DIALOG, LEXIS-NEXIS,

Dow Jones News Retrieval Services, CompuStat

 Internet

Examples: World Wide Web search engines (Google, Yahoo,

Altavista, Lycos, Excite etc.)

 All Other Sources

Examples: Research Institutions, Libraries, Books, Journals,

Periodicals,
Newspapers, Chambers of Commerce and Industry
Data and Information Sources for Business
Researchers (Pakistan)
• Federal and provincial ministries of commerce, industries and production
• Federal, provincial and city Chambers of Commerce and Industry
• State Bank of Pakistan, Pakistan Banking Council, local and foreign banking
institutions
• Stock Exchanges
• National Investment Board
• Export Promotion Bureau
• Manufacturers, Traders and Exporters Associations
• Research Institutes (e.g. Pakistan Institute of Development Economics)
• Newspapers and Magazines (e.g. Business Recorder, Pakistan and Gulf
Economist)
• Business and Trade Directories
• Internet (e.g.: www.forexpk.com)