The Role of Business The Role of Business ResearchResearch

Theory BuildingTheory Building

The scope of business The scope of business researchresearch

What is “business” What is “business” anyway???anyway???

Is research applicable to all Is research applicable to all business units/functions?business units/functions?

Business research definedBusiness research defined

the systematic and objective the systematic and objective process of gathering, recording, process of gathering, recording, and analyzing data for aid in and analyzing data for aid in making business decisionsmaking business decisions

Types of researchTypes of research

PUREPURE

expand the limits of expand the limits of knowledgeknowledge

not aimed at solving a not aimed at solving a specific pragmatic specific pragmatic problemproblem

theory developmenttheory development

APPLIEDAPPLIED

aimed at solving a aimed at solving a specific pragmatic specific pragmatic problemproblem

““action research” is action research” is one typeone type

ApplicationsApplications

identifying problems or opportunitiesidentifying problems or opportunities

diagnosis and assessmentdiagnosis and assessment

selecting and implementing a course of selecting and implementing a course of actionaction

evaluating a course of actionevaluating a course of action– EvaluationEvaluation

Performance monitoringPerformance monitoring

Research isn’t always the answer!Research isn’t always the answer!

Before doing research consider the Before doing research consider the following:following:– time constraintstime constraints– availability of dataavailability of data– nature of the decisionnature of the decision– has the decision already been made?has the decision already been made?– does the cost outweigh the benefit?does the cost outweigh the benefit?

Nature of truthNature of truth

knowledge is socially constructedknowledge is socially constructed

Sources of KnowledgeSources of Knowledge

ExperienceExperience– but may not be systematicbut may not be systematic– may not be universalmay not be universal

AuthorityAuthority– customcustom– traditiontradition– but how does authority but how does authority

know?know?

Francis BaconFrancis Bacon

In the year of our Lord, 1432, there arose a grievous quarrel among the brethren over the number of teeth in the mouth of a horse. For thirteen days the disputation raged without ceasing. All the ancient books and chronicles were fetched out, and wonderful and ponderous erudition was made manifest. At the beginning of the fourteenth day a youthful friar of goodly bearing asked his learned superiors for permission to add a word, and straightway, to the wonder of the disputants, whose deep wisdom he sorely vexed, he beseeched them in a manner coarse and unheard of, to look in the mouth of a horse and find answers to their questionnings. At this, their dignity being grievously hurt, they waxed exceedingly wroth; and joining in a mighty uproar they flew upon him and smote him hip and thigh and cast him out forthwith. For, said they, "Surely Satan hath tempted this bold neophyte to declare unholy and unheard-of-ways of finding truth, contrary to all the teachings of the fathers." After many days of grievous strife the dove of peace sat on the assembly, and they, as one man, declaring the problem to be an everlasting mystery because of the dearth of historical and theological evidence thereof, so ordered the same writ down. —Attributed to Bacon, cited in Best and Kahn, Research in Education, 8th edition, pp.4-5.

SOURCES OF KNOWLEDGESOURCES OF KNOWLEDGE

ExperienceExperience

AuthorityAuthority

Deductive ReasoningDeductive Reasoning

Inductive ReasoningInductive Reasoning

SOURCES OF KNOWLEDGESOURCES OF KNOWLEDGE

ExperienceExperience

AuthorityAuthority

Deductive ReasoningDeductive Reasoning

Inductive ReasoningInductive Reasoning

Scientific MethodScientific Method– inductive - deductiveinductive - deductive

Theory Formulation

Deductive ReasoningThe logical process of deriving a conclusion from a known premise or something known to be true.

We know that all managers are human beings. If we also know that John Smith is a manager, then we can deduce that John Smith is a human being.

Subject to error!

Inductive Reasoning

The logical process of establishing a general proposition on the basis of observation of particular facts.

All managers that have ever been seen are human beings; therefore all managers are human beings.

Subject to error too!

THE SCIENTIFIC APPROACH THE SCIENTIFIC APPROACH

OBSERVATIONS Inductively HYPOTHESES Deductively

If compatible with theorganized body of acceptedknowledge, thesehypotheses will be testedby the gathering of empirical data

LOGICAL IMPLICATIONSOF THE

HYPOTHESES

THEORYTHEORY

is a system for explaining a set of is a system for explaining a set of phenomena by specifying constructs and phenomena by specifying constructs and the laws that relate these constructs to the laws that relate these constructs to each othereach other..

Purpose of TheoriesPurpose of Theories

to summarize and organize existing to summarize and organize existing knowledgeknowledgeto explain observed events and to explain observed events and relationshipsrelationships to predict the occurrence of unobserved to predict the occurrence of unobserved events and relationshipsevents and relationshipsto stimulate further inquiry to stimulate further inquiry – identifying areasidentifying areas– providing leadsproviding leads

What makes a good theory?What makes a good theory?

ValidityValidity– It fits the factsIt fits the facts

GeneralizationGeneralization– Makes predictions about future or other Makes predictions about future or other

eventsevents

ReplicationReplication– It can be repeated with similar findings It can be repeated with similar findings

ConstructsConstructs

In management we often use concepts or In management we often use concepts or constructs as variablesconstructs as variables

examples:examples:– leadershipleadership– social responsibilitysocial responsibility– GNPGNP– agencyagency– honestyhonesty– efficiencyefficiency

AbstractionAbstraction

Concepts abstract realityConcepts abstract reality– Are expressed in words that refer to various Are expressed in words that refer to various

events or objectsevents or objects– Vary in degree of abstractionVary in degree of abstraction– Research operates at abstract and empirical Research operates at abstract and empirical

level linking concepts together as we begin level linking concepts together as we begin the journey to construct theory.the journey to construct theory.

PropositionsPropositions

Concepts are the basic building blocksConcepts are the basic building blocks

Propositions propose the linkages Propositions propose the linkages between these conceptsbetween these concepts

theory

propositions

concepts

Lev

el o

f ab

stra

ctio

n

From proposition to hypothesisFrom proposition to hypothesis

Concept A:

Punishment

Concept B:

Attendance

Yelling at students

Increases attendance by 50%

AbstractLevel

EmpericalLevel

Proposition

Hypothesis

A hypothesis is a proposition that is empirically testable. It is an empirical statement concerned with the relationship among variables.

•A variable is anything that… varies!•Make sure that you define, or operationalize all your variables… an operational definition•Null hypothesis

What makes a good What makes a good hypothesis?hypothesis?

preciseprecise

specifies variables to measurespecifies variables to measure

specifies relationships between specifies relationships between variablesvariables

A poor hypothesisA poor hypothesis

Students spend too much money on fast Students spend too much money on fast food.food.

A better hypothesisA better hypothesis

Students with incomes of less than 10,000 Students with incomes of less than 10,000 per year spend a higher proportion of their per year spend a higher proportion of their income in fast food restaurants than the income in fast food restaurants than the established mean for the general established mean for the general population.population.