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The Role of Business Research

Chapter 1The Role of Business Research

Business Research Methods 9eZikmundBabinCarrGriffin

LEARNINGOUTCOMESLEARNINGOUTCOMES

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1. Understand how research contributes to business success

2. Know how to define business research3. Understand the difference between basic and

applied business research4. Understand how research activities can be used to

address business decisions5. Know when business research should and should

not be conducted6. Appreciate the way technology and

internationalization are changing business research

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ESPN Hits a Home Run

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• ESPN has information in many databases.

• Business research integrated it so they could learn more about how fans use their media.

• Gaining intelligence had bottom-line implications for their own revenue and their advertisers'

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Business Research Defined• Business research is the application of the

scientific method in searching for the truth about business phenomena.

• The process includes:• idea and theory development• problem definition• searching for and collecting information• analyzing data• communicating the findings and their

implications

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Business Research Defined• This definition suggests that business

research information is:• not intuitive or haphazardly gathered• accurate and objective• relevant to all aspects of the business• limited by one’s definition of business

• Not-for-profit organizations and governmental agencies can use research in much the same was as managers in for-profit organizations.

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Applied and Basic Business Research• Applied business research

• conducted to address a specific business decision for a specific firm or organization.

• Example: ◗ Should McDonald’s add Italian pasta dinners to its

menu?◗Which health insurance plan should a business

provide for its employees?

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Applied and Basic Business Research• Basic business research (also called pure

research)• conducted without a specific decision in mind that

usually does not address the needs of a specific organization.◗ Attempts to expand the limits of knowledge in general.◗ Not aimed at solving a pragmatic problem.

• Example:◗ Do consumers experience cognitive dissonance in low-

involvement situations?◗ Does employee tenure with a company influence

productivity?

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The Scientific Method• Scientific Method

• The way researchers go about using knowledge and evidence to reach objective conclusions about the real world.

• The analysis and interpretation of empirical evidence (facts from observation or experimentation) to confirm or disprove prior conceptions

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EXHIBIT 1.1 A Summary of the Scientific Method

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Managerial Value of Business Research

• There are only a few business orientations:• Product-oriented• Production-oriented• Marketing-oriented

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Managerial Value of Business Research

• The decision-making process associated with the development and implementation of a business strategy involves four interrelated stages:

1. Identifying problems and opportunities2. Diagnosing and assessing problems or

opportunities3. Selecting and implementing a course of

action4. Evaluating the course of action

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Evaluating the Course of Actions• Evaluation Research

• The formal, objective measurement and appraisal of the extent a given activity, project, or program has achieved its objectives.

• Performance Monitoring Research• Research that regularly, sometimes routinely,

provides feedback for evaluation and control of business activity.

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When is Business Research Needed?• The determination of the need for research

centers on:1. Time constraints2. The availability of data3. The nature of the decision to be made4. Benefits versus costs (the value of the research

information in relation to costs)◗ Will the payoff or rate of return be worth the

investment?◗ Will the information improve the quality of the

managerial decision enough to warrant the expenditure?

◗ Is the expenditure the best use of the available funds?

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Harley-Davidson Goes Abroad

• Consumers in different countries have different preferences.

• Even if consumers want it, government regulations can make it prohibitive (e.g., India).

• Harley is pursuing the U.S. women’s market for bikes.

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Business Class Success?

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• Business-class travelers want comfort, good food, and convenient boarding, but the price is hefty.

• Two start-ups offered “discount” business-class-only airlines but failed.

• Could more effective research have determined that these were not feasible business ventures?

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Business Research in the 21st Century

• Communication Technologies• Always “connected”—time, place, and distance

are irrelevant.• Decreases in information acquisition, storage,

access, and transmission costs.

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Business Research in the 21st Century

• Global Business Research• Business research is increasingly global.• Must understand the nature of particular

markets.• Cross-validation

◗Verify that the empirical findings from one culture also exist and behave similarly in another culture.

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“Jacques” Daniels

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• Research findings:• Japanese use JD as a

dinner beverage• Australian’s drink

distilled spirits at home• British like to drink at

bars and restaurants• Chinese prefer “knock-

offs” to save money and enjoy it with green tea