Abdm4064 week 01 intro

ABDM4064 BUSINESS RESEARCH

The Nature of Business &
The Nature of Business &
Management Research
Management Research

by
Stephen Ong

Principal Lecturer (Specialist)
Visiting Professor, Shenzhen

Topics of Discussion
 Introduction to Research
 What is Research?
 Research and Business
 Business Managers and Research
 Approach to Business Research

What is Research?
 Robert has Developed ‘Protein-based Computer
Memories”.
 “Many agree that any kind of Malaria Vaccine is not
perfect”.
 “Government (Malaysian) will amend the Companies
Act soon to enhance Corporate Governance”.
 “US FDI shifts to service-Based Business (in
Malaysia)”.
 “Global Oil Production Up 185000 bpd in November
2002”

What Research Is Not
 Research isn’t information gathering:
 Gathering information from resources such books
or magazines isn’t research.
 No contribution to new knowledge.
 Research isn’t the transportation of facts:
 Merely transporting facts from one resource to
another doesn’t constitute research.
 No contribution to new knowledge although this
might make existing knowledge more accessible.

What Research Is

 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
 Research is the way of thinking, examining
critically the various aspects of your
profession, understanding and formulating
guiding principles that govern a particular
procedure and developing and testing new
theories for the enhancement of your
profession. It is a habit of questioning about
what you do and empirical examination to
find answers, with a view to instituting
appropriate changes for a more effective
professional services.

Business Research Defined

Business research is defined as the
systematic and objective process of
generating information for solving a
problem or finding solution to a
complex issue (aid in making
business decisions).

Business Research
 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.

Objectives of Business
Research
 To extends knowledge
 To discovered new information
 Theory building
 To verify and test existing facts and theory
 To analysis inter-relationships between
variables
 Aims to find solution to current problem
 In total, to make more effective professional
services

Types/Classifications of
Research
 The research can be classified from
three perspectives:
 Application
 Basic or pure and applied research
 Objectives
 Exploratory, Descriptive, or explanatory
(causal, hypothesis testing)
 Type of information
 Qualitative and quantitative

Figure 1.1 Basic and applied research
Sources: Authors’ experience; Easterby-Smith et al. (2008), Hedrick et al. (1993)

Types of Research
(Basic)
 Basic Research
 Generating scientific knowledge for future use
(Common use). It also known as pure or
fundamental research. Basic research is
undertaken for the sake of knowledge without any
intention to apply it in practice. It is undertaken
out of intellectual curiosity. It may lead to
discovery of new theory or refinement of an
existing theory. The findings or basic research
enrich the storehouse of knowledge that can be
drawn upon in future to formulate significant
practical research.

Types of Research
(Applied)
 Applied Research:
 Applied research is carried on to find
solution to a real life problem oriented and
action directed. It seeks an immediate and
practical results. However, it may
indirectly contribute to the development of
theoretical knowledge by leading to a
discovery of new facts or testing of a
theory or to conceptual clarity.

Basic Research
 Attempts to expand the limits of
knowledge.
 Not directly involved in the solution to
a practical problem.

Basic Research Example
 Is executive success correlated with
high need for achievement?
 Coupons versus rebates as demand
stimulation tactics
 Compensation Systems and Labour
Productivity
 Factors determining share prices

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 White
strips would sell well at a retail
price of RM44

Basic Differences Between
Basic and Applied Research
 Applied Research  Basic Research
 “what is the problem” is  Problem based on the
an important step in researcher interest to
resolving that problem. explain and
 What problems to understanding of the
analysis may be outside subject
the individual researcher  Selection of the problem
domain is totally the choice of
 Researcher role is the researcher
examine analytically and  Some value judgment
a course of action may be made, action is
recommended not recommended

Exploratory Research
 It is undertaken to find out ‘what is
happening, to seek insights, to ask
question and to assess phenomena in
a new light. It is useful if you wish to
clarify your understanding of a
problem. This is carried out to
investigate the possibilities of
undertaking a particular research
study.

Descriptive Research
 Attempts to describe systematically a
situation, problem, phenomenon,
progamme or provide information
about living conditions, or describes
attitudes towards an issue.

Correlation Research
 Discover the relationship/ association /
interdependence between two or more
variables or situations.

Explanatory Research
 Study and explain the exact
relationship between two or more
variables.

Research and Business
 Primary objective is to provide
information that improves the decision-
making process of an organization.
 These information reduce managerial
uncertainty in each stages of
development and implementation of a
strategy.

Business Managers and
Research
 Nestlé's Regional Revamp.
 Debt-restructuring exercise helps
put water-meter Manufacturer back
on its feet.
 Inproser Bhd claims its product
can help poultry farmers slash
cost.
 “Celcom – TM Touch Merges”.

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

Determining When to Conduct
Business Research
 Time constraints
 Availability of data
 Nature of the decision
 Benefits versus costs

Determining When to Conduct
Business Research
Availability of Benefits
Time Constraints Data Nature of the Decision vs. Costs
Is the infor- Does the value
Is sufficient time Is the decision Conducting
Yes mation already Yes Yes of the research Yes
available before of considerable
a managerial
on hand
strategic
information Business
inadequate exceed the cost
decision
for making
or tactical
of conducting Research
must be made? importance?
the decision? research?

No No No No

Do Not Conduct Business Research

Value versus Costs
 Potential Value of a Business
Research Effort Should Exceed Its
Estimated Costs

Value Should Exceed
Estimated Costs
Costs
Value •Research
expenditures
•Decreased •Delay of business
uncertainty decision and
•Increased likelihood
possible disclosure
of a correct decision of information to
•Improved business
rivals
performance and •Possible erroneous
resulting higher research results
profits

Why should a Manager Know
Research?
 Facilitate good decision making
 Become discriminating about research
findings
 Issues of inside versus outside
researcher
 To share relevant information with
researcher
 Understand complex issues, variables,
calculate risk, probabilities, etc.

Internal Researcher
 Advantages:
 Better acceptance from the staff
 Knowledge about the organization
 Would be integral part of implementation and
evaluation of the research recommendations
 Limitations:
 Less fresh ideas
 Power Politics
 May not be valued as experts by staff

External Researcher
 Advantages:
 Divergent and convergent thinking
 Experience from several situations
 Better technical training

Limitations:
Time to understand the organizational system
Cooperation from the staffs is not easy
Leakage of business secretes
Not available for evaluation after implementation
cost

Approach to Business
Research
 Scientific Research
 Characteristics of Scientific Research
 Process of Scientific Reasoning

 Hypothetico-deductive Method

 Case Study
 Action Research

Characteristics of Scientific
Research
 Purposive
 Rigor
 Testability
 Replicability
 Precision and Confidence
 Objectivity
 Parsimony

Scientific Approach and
Business Research
 It is not always possible to conduct
investigation 100 percent scientific in business
research. Unlike the physical sciences, the
results obtained will not be exact and error free,
since most of the business research deals with
human behavior. It is very difficult to measure
and collect of subjective information like,
feelings, emotions, attitudes and etc. Hence, it
may not possible for comparability, consistency
and wide generalizability in most of the
business research.

Logical Reasoning Process
 Induction
 The inductive method consists of studying
several individual cases and drawing a
generalization. It involves two process –
observation and generalization. Conclusions from
induction are tentative inferences and they are
subject to further conformation based on more
evidence.
 Deduction
 Deduction is reasoning process of applying a
general accepted principle to a specific individual
case falling under the general principle.

Induction
 Form of reasoning – bottom up
Theory

Tentative
Hypothesis or
proposition

Identifying
Patterns

Observations
Measures

Induction Method
 Example: “Advertising Expenditure
and Sales”
 Observe the facts, collect relevant
data, then look for the pattern or
summarize the observation and
finally tentative conclusions.
 When followed: When new facts are
studied, new truth are uncovered.

Deduction
 Top down reasoning
Theory

Hypothesis
To test

Observations to address
the hypothesis
Test the hypothesis with specific data

Confirm/or disconfirm
the original hypothesis

Deductive Method
Reasoning form the general to the particular
Like: All Men are mortal
“A” is a man
Conclusion: “A” is mortal
Example: “Advertising Expenditure and Sales”
Hypothesis: “There is a positive relationship
between expenditure on advertising and sales
revenue”
Make Observation
Accept or reject hypothesis.

Hypothetico-deductive
Method
 The method of starting with a
theoretical framework, formulating
hypotheses and logically deducing
from the results of the study is known
as the hypothetico-deductive method.
This method is much popular in
business research. This method
involves seven important steps.

Process in Hypothetico-
deductive Method
 Observation
 Preliminary information gathering
 Theory formulation
 Hypothesizing
 Data collection
 Data Analysis
 Deduction

Case Study
 It examine complex factors involved in a given
situation so as to identify causal factors operating
in it. A case study aims at studying everything
about something rather than something about
everything, as in the case of a statistical method
or quantitative analysis. In quantitative analysis,
‘individual’ disappears and in the case of case
study ‘individual’ representing the wholeness.
 Example: A Study of Labour Participation in Management in a
particular Enterprise
 A Study of life-style of Working Women.

Suitability: This flexible method provide much information
about the unit of analysis. However, it has limited use in
business research due to its limited generalization and
it is a time consuming method of research.

Action Research
 It is a type of evaluation study. It is a
concurrent evaluation study of an action
programme launched to solve a problem or
to improve an existing situation. It consists
of a number of phases, like, base-line survey,
systematic action and assessment. It is a
concurrent evaluation study of an action
programme launched for solving a
problem/for improving an existing situation.

Figure 1.1 A simple concept map showing representation of competitive advantage
Source: Institute for Manufacturing (www.ifm.eng.cam.ac.uk/csp/news/05april/4.html)
1 - 46

Figure 1.2 Grand, middle-range and substantive theories
Source: Saunders et al. (2009), developed from Creswell (2008)
1 - 47

Video Study
“Supersize Me” or
“Why is America so FAT?”

1 - 48

How Creative Are You?
Hundred O
Chun Hundred R
Chun Hundred H E Umph Umph Umph Grace.
Chun Hundred S W Of the Spirit
Chun Hundred S

Stand S Media
Scholar I

Intensity
2 1111 STO CK THEBLUEFACE S H E E T

Objection W E B Roll Roll Tomb of 210,N
Ruled Roy Roy

2 - 49

Brainstorming Guidelines
 Keep the group small – “Two pizza rule.”
 Make the group as diverse as possible.
 Emphasize that company rank is
irrelevant.
 Have a well-defined problem, but don’t
reveal it ahead of time.
 Limit the session to 40 to 60 minutes.
 Take a field trip.
 Appoint a recorder.
2 - 50

Brainstorming Guidelines
 Use a seating pattern that encourages
interaction.
 Throw logic out the window.
 Encourage all ideas from the team.
 Shoot for quantity of ideas over quality of
ideas.
 Forbid criticism.
 Encourage idea “hitch-hiking.”
 Dare to imagine the unreasonable.
2 - 51

Further Reading
 ZIKMUND, W.G., BABIN, B.J., CARR, J.C.
AND GRIFFIN, M. (2010) BUSINESS
RESEARCH METHODS, 8TH EDN, SOUTH-
WESTERN
 SAUNDERS, M., LEWIS, P. AND
THORNHILL, A. (2012) RESEARCH
METHODS FOR BUSINESS STUDENTS, 6TH
EDN, PRENTICE HALL.
 SAUNDERS, M. AND LEWIS, P. (2012)
DOING RESEARCH IN BUSINESS &
MANAGEMENT, FT PRENTICE HALL.
1 - 52

How Creative Are You?
ANSWERS

Fortune 500 Scattered Triumph of the Grace Period
Showers Spirit

Rhodes Scholar I Understand Spring Break Media Bias

Two for One Blue in the Face High Intensity Spreadsheet
Stock Split

Objection Web Links Rolls Royce Tomb of
Overruled Tutankhamen

2 - 53

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