Lecture 1-05.01.15

The Role of Business Research/
Introduction
05.01.15
N.P. Singh
Professor
Management Development Institute
Mehrauli Road, Sukhrali - Gurgaon -122007-2

It is the systematic and objective
process of generating information for
aiding business decisions.

 Research information is neither intuitive nor
haphazardly gathered.
 Business research must be objective
 Detached and impersonal rather than biased
 It facilitates the managerial decision process
for all aspects of a business.

 Information
 Reduces
 Uncertainty
I don’t know
if we
should
offer on-site
child care?

 Classification-I
 Basic Research
 Applied Research
 Classification-II
 Exploratory Research
 Descriptive Research
 Causal Research

Basic research
Applied research

 Attempts to expand the limits of knowledge.
 Not directly involved in the solution to a pragmatic
problem.
 In Science
 The main motivation is to expand man's knowledge, not to
create or invent something.
 There is no obvious commercial value to the discoveries that
result from basic research.
 Examples:
▪ How did the universe begin?
▪ What are protons, neutrons, and electrons composed of?
▪ How do slime molds reproduce?
▪ What is the specific genetic code of the fruit fly?

 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?

 Conducted when a decision must be made about a
specific real-life problem.
 In Science
 The goal of the applied scientist is to improve the
human condition.
▪ Improve agricultural crop production
▪ Treat or cure a specific disease
▪ Improve the energy efficiency of homes, offices, or modes of
transportation

 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 CrestWhitestrips would sell
well at a retail price of $44.

 A researcher investigates whether
different in a manger’s brain (e.g.
right versus left hemisphere) are
active during different kinds of
managerial decision-making.

 A researcher investigates
consumers’ attitudes toward a
prototype of an innovative type of
product, a home Cleaning kit for use
on clothes that require dry cleaning

 A researcher investigates 5
personality traits to see if they
can explain the purchasing
behavior of automobile buyers.

 A new technology that nullifies the need
to refrigerate fish has been invented.
Heat processing and the use of flexible
pouches for storage helps retain the
freshness of fish and frozen food for
three years. A researcher investigates
how this new technology will impact the
market for fish in India.

 A researcher working for a candy
company has children evaluate concepts
and prototypes for new candies. The
researchers ask children to taste the
products and rate them. Sometimes, the
candy company develops unique items
that taste good and researchers ask
children to come up with a concept or a
name the product.

 A researcher working investigates
whether introducing a “subbrand” at
new-car dealerships, identified by an
AutoNation USA logo below the
dealership name, is an effective basic
strategy that can be applied to all its
dealerships.

 Exploratory Research: Design in which the
major emphasis is on gaining ideas and
insights.
 Descriptive Research: Research design in
which the major emphasis is on determining
the frequency with which something occurs
or the extent to which two variables covary.
 Causal Research: Research design in which
the major emphasis is on determining cause-
and-effect relationships.

 The popular crime investigation television shows (e.g.,
CSI: Crime Scene Investigation) provide a fairly good
illustration of the three types of research design.
 These shows usually begin with a crime that must be
investigated (an unplanned change has occurred in the
marketplace).The first step is to search for clues that can help
establish what has happened (exploratory research-
Qualitative data based Research ).
 The clues uncovered in the exploratory phase of the
investigation often point toward a particular hypothesis or
explanation of the events that occurred, and investigators
begin to focus their efforts in this direction, conducting
interviews with witnesses and suspects (descriptive
research).
 Finally, a trial is held to determine whether the evidence is
sufficient to convict a suspect of the crime (causal research).
(Quantitative data based research)

 For example, if sales for a particular line of vehicles
dropped during the latest quarter, as a researcher you
might use exploratory research to provide insights
about what caused the decrease in revenue.
 Suppose that you conducted interviews with potential
car buyers and noticed that they seemed to be more
excited about the new styles of other car brands than
they were about the brand in question.
 This might lead to the hypothesis that style preferences
had changed, resulting in lower sales.
 You can’t really confirm or reject the hypothesis with
exploratory research, though. For this purpose you
need to conduct exploratory research.

 Years ago, before the advent of CAT scanners
and other noninvasive medical diagnostic
procedures, doctors who were stumped
about a patient’s symptoms might
recommend “exploratory surgery.”
 With little to go on but vague descriptions of
symptoms, physicians would “open up” a
patient to look around and see what needed
fixing.

 In market research, exploratory research plays a
similar role.
 Marketers have no machines to peer inside a
decision problem, so they may use certain
research techniques to “open up” the problem
and look around.
 Researchers use these techniques, which they
refer to collectively as exploratory research, with
a single broad purpose: clarify the research
questions that guide the entire research project.

 Researchers want to know general information about human beings,
such as what factors lead to excessive drinking among college
students and what the results of this practice might be.
 An experimental research design would divide random college
students in two groups, asking one group to drink a lot of alcohol and
the other to abstain.This would be a completely unethical study
because it would put the research subjects in danger.
 Instead of putting subjects in danger, researchers use various forms of
descriptive research, which can include having the students fill out
surveys, observing students' behavior in various settings and
interviewing students.
 In this way, researchers can study students who self-select drinking
behaviors.
 While descriptive research can yield rich descriptions of factors that
may be associated with drinking behavior, it cannot determine causal
factors between variables the way experimental research can

 Both Methods (Exploratory & Descriptive)
Employ Scientific Methods
 Definition
 The analysis and interpretation of empirical
evidence (facts from observation or
experimentation) to confirm or disprove prior
conceptions.
 It requires
 Systematic Analysis & Logical Interpretation of
empirical evidences

 It reduces……….???????
 The Decision-making Process Associated
with the Development and Implementation
of a Strategy
 Identifying problems and opportunities
 Diagnosis and assessment of problem &
opportunities
 Selecting and implementing a course of action
 Evaluating the course of action

 The description of the dividend history of
stocks in an industry may point to an
attractive investment opportunity.
 What could be the role of business research in
this case?????????

 Employees interviews undertaken to
characterize the dimensions of an air line
reservation clerk’s job reveal that reservation
clerks emphasize competence in issuing the
tickets over courtesy and friendliness in
customer contact.

 Provisioning of diagnostic information that
clarifies the situation
 Examples: Underlying factors creating a
problem.
 If there is a problem than need to specify what
happened & why
 If multiple opportunities exist. Research may set
priorities.
 The information collected may give you many
solutions.

 Factory is to be built in Delhi or HP.
 It is possible to answer this question after
analyzing data of all dimension of the
business
 Means by taking in to account all factors.

 Planned activities are properly executed or
not?
 It is to be evaluated.

 Evaluation research is the formal, objective
measurement and appraisal of the extent to
which a given activity, project, or program
has achieved its objectives.
 Conducted by Government Agencies for
evaluating their existing programs for up
liftment of the society.

 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”
 This is an example of evaluation research.

 Emphasizes the company’s gathering of new
data.
 Not conducted regularly or continuously.
 Projects conducted to study specific
company problems.

 One
 Qualitative Data Based Research
 Quantitative Data Based Research
 Two
 Research based on Primary data
 Research based on Secondary data

 Time constraints
 Availability of data
 Nature of the decision
 Benefits versus costs

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 Constraints
Availability of Data
Nature of the Decision
Benefits
vs. Costs
Yes
Yes
Yes
Yes
No
No No No

 PotentialValue of a Business Research Effort
Should Exceed Its Estimated Costs

Value
•Decreased 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

 General Business Conditions and Corporate Research
 Short term forecasting
 Long term forecasting
 Trend analysis
 Global environment analysis
 Inflation & pricing
 Plant & warehouse location
 Acquisions

 Financial and Accounting Research
 Interest trends
 Stock, bond, commodity prediction
 Capital formation alternatives
 Merger & acquisitions
 Risk return trade off
 Impact of taxes
 Portfolio analysis
 Research on financial institution
 Expected rate of returns

 Management and Organizational Behavior Research
 TQM
 Morale & Job Satisfaction
 Leadership style
 Employee Productivity
 Sales and Marketing Research
 Market Potentials
 Market share
 Market segmentation
 Sales analysis
 Information Systems Research
 Knowledge & information need assessment
 Data Mining
 Corporate Responsibility Research
 Ecological Impact
 Logical constraint
 Social values & ethics

 Increased globalization
 Unknown lands of unknown people.
 Growth of InformationTechnologies.
 Working Philosophy
 Why I collect if I can store it?
 Why I store it if I can not analyze it?
 Why I analyze it if it does not value for me?

 Business Research is increasingly global
 Market knowledge is essential
 A.C. Nielsen - more that 67% international
business

 General information about country –
 Economic conditions
 Political Institutions
 Political climate
 Infrastructure
 Cultural and other factors which are responsible
for success & failure of business
 Market and competitive conditions – Market Size
& Demand estimation etc.

 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.

 Seeking facts and figures about an issue
 Surveys onWeb sites

 Bibliographic/text
 Statistical/geographic
 Scanner
 Financial
 Image and video

Lecture 1-05.01.15

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Lecture 1-05.01.15