 This chapter focuses on the relationship between

business research and managerial decision making.

CHAPTER 4 Business success is determined directly by the quality

of decisions made by key personnel.
THE BUSINESS RESEARCH PROCESS Introduction  The chapter introduces the types of research that allow
researchers to provide input to key decision makers.
also the chapter discusses stages in the business
research process.

 The process of developing and deciding among

alternative ways of resolving a problem or choosing
from among alternative opportunities.
 ■ business opportunity: A situation that makes some
 Complete certainty means that the decision maker has all information needed to make an optimal
potential competitive advantage possible.
decision.
 ■ business problem: A situation that makes some significant  Uncertainty means that the manager grasps the general nature of desired objectives but the
Decision negative consequence more likely.
information about alternatives is incomplete.

making:  ■ symptoms: Observable cues that serve as a signal of a

problem because they are caused by that problem.
 Ambiguity means that the nature of the problem itself is unclear. Objectives are vague and decision
alternatives are difficult to define.
  Business research is undertaken to reduce uncertainty
and focus decision making. In more ambiguous
circumstances, management may be totally unaware of  managers want to know how a change in one event will
a business problem. Three types of business research: change another event of interest.
 Exploratory research: Conducted to clarify ambiguous  causal inference: A conclusion that when one thing happens,
Types of situations or discover ideas that may be potential business
opportunities.
another specific thing will follow.

Business  Descriptive research: Describes characteristics of objects, CAUSALITY:

 Three critical pieces of causal evidence are:

Research: people, groups, organizations, or environments; tries to “paint a

picture” of a given situation.
1. Temporal Sequence
2. Concomitant Variance
 Causal research: Allows causal inferences to be made; seeks 3. Nonspurious Association
to identify cause and effect relationships.

 absolute causality Means the cause is necessary and

sufficient to bring about the effect.
 temporal sequence deals with the time order of events—the cause must occur before the effect.
 conditional causality Means that a cause is necessary
 concomitant variation occurs when two events “covary,” meaning they vary systematically.
 nonspurious association: means any covariation between a cause and an effect is true and not
DEGREES OF but not sufficient to bring about an effect

simply due to some other variable CAUSALITY  contributory causality Means that a cause need be
neither necessary nor sufficient to bring about an
effect.
  Experiment: A carefully controlled study in which the
researcher manipulates a proposed cause and observes
any corresponding change in the proposed effect.
 experimental variable: Represents the proposed
cause and is controlled by the researcher by
manipulating it. Business research, like other forms of scientific inquiry,
EXPERIMENTS  Manipulation: Means that the researcher alters the
involves a sequence of highly interrelated activities. The
stages of the research process overlap continuously, and it is
level of the variable in specific increments. clearly an oversimplification to state that every research
project has exactly the same ordered sequence of activities.
 Test market: An experiment that is conducted within
Nevertheless, business research often follows a general
actual market condition pattern
  The goals to be achieved by conducting research
 deliverables The term used often in consulting to
 master plan that specifies the methods and procedures
describe research objectives to a research client.
for collecting and analyzing the needed information.
Defining the Planning the  ■ SELECTION OF THE BASIC RESEARCH METHOD
Research  ■EXPLORATORY RESEARCH Research  Survey

Objectives  literature review

 Pilot Studies
Design  Observation
 Secondary Data
 ■ LINKING DECISION STATEMENTS, OBJECTIVES, AND
HYPOTHESES

 Involves any procedure that draws conclusions based

on measurements of a portion of the population
Processing and  Data analysis The application of reasoning to
Sampling  “Who is to be sampled?”
understand the data that have been gathered
 How big should the sample be?
Gathering Data
Analyzing Data
 research program Numerous
research project A single study that
related studies that come together
Drawing  The conclusions and report preparation stage consists
addresses one or a small number of
research objectives.
to address multiple, related

Conclusions and of interpreting the research results, describing the

implications, and drawing the appropriate conclusions
research objectives.

Preparing a for managerial decisions. T

Report