Chapter 4:

The Business Research Process

 Role of Researchers
• Business success depends on the quality of decisions
made by key personnel.
• Researchers contribute to decision making in several
key ways.
– Helping to better define the current situation
– Defining the firm—determining how consumers,
competitors, and employees view the firm
– Providing ideas for enhancing current business practices
– Identifying new strategic directions
– Testing ideas that will assist in implementing business
strategies for the firm
– Examining how correct a certain business theory is in a
given situation

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 Types of Research
• Business research is undertaken to reduce
uncertainty, ambiguity and create opportunity.
• Based on Purpose:
– Exploratory
– Descriptive
– Causal
• Based on technique:
– Experiments
– Surveys
– Observational Studies

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 Exploratory Research
• Conducted to clarify ambiguous situations or
discover potential business opportunities
• Not intended to provide conclusive evidence to
determine a particular course of action
• Often used to guide and refine subsequent research
efforts
– What Makes a Mascot Tick for Harpic?
• Particularly useful in new product development
– Sony and Honda

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 Descriptive Research
• Describes characteristics of objects, people, groups,
organizations, or environments
• Tries to “paint a picture” of a given situation by
addressing who, what, when, where, and how
questions.
– Labor Statistics in the form of the Current Population
Survey
• Conducted after the researcher has gained a firm
grasp of the situation being studied
• Help develop research questions and hypotheses
– Whines for Wines; geographic location

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 Descriptive Research Example
• Weight Watchers average customer
– Woman about 40 years old
– Household income of about $50,000
– At least some college education
– Trying to juggle children and a job
• Men’s fragrance market
– 1/3 size of women’s fragrance market
– But growing at a faster pace
– Women buy 80 % of men’s fragrances

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 Causal Research
• Allows causal inferences to be made; Conducted to
identify cause and effect relationships
• Very powerful causality lead to greater control
• The research types often act as building blocks
– exploratory research builds the foundation for descriptive
research
– descriptive research usually establishes the basis for
causal research

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 Identifying Causality
• Causality helps to identify causal inference
– Causal inference: A conclusion that when one thing
happens, another specific thing will follow
• Scientifically establishing something as a cause is not
so easy
• Evidence of causality:
– Temporal Sequence
– Concomitant Variance
– Nonspurious Association

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 Identifying Causality
• Temporal Sequence: Deals with the time order of events
—the cause must occur before the effect
– If a change in the CEO causes a change in stock prices, the CEO
change must occur before the change in stock values
• Concomitant Variance: Occurs when two events
“correlate,” meaning they vary systematically
– If a retail store never changes its employees’ vacation policy,
then the vacation policy cannot possibly be responsible for a
change in employee satisfaction
• Nonspurious Association: Covariation between a cause
and an effect is true and not simply due to some other
variable
– Positive correlation between ice cream purchases and murder
rates—as ice cream purchases increase, so do murder rates
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 Degrees of Causality
• Absolute Causality: The cause is necessary and
sufficient to bring about the effect
– “Smoking Causes Cancer”
• Conditional Causality: A cause is necessary but
not sufficient to bring about an effect
– The cause can bring about the effect, but it cannot do
so alone
• Contributory Causality: A cause need be neither
necessary nor sufficient to bring about an effect
– Smoking then can be a contributory cause of cancer

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 Experiments
• Business experiments hold the greatest potential for
establishing cause-and-effect relationships
• In carefully controlled study the researcher
manipulates a proposed cause and observes any
corresponding change in the proposed effect
– Test-market: An experiment that is conducted within
actual market conditions
• McDonald’s
• An experimental variable represents the proposed
cause and is controlled by the researcher by
manipulating it
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 Influence of Uncertainty

CAUSAL OR
COMPLETELY CERTAIN ABSOLUTE AMBIGUITY EXPLORATORY
DESCRIPTIVE

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Influence of Uncertainty

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Stages of the Research Process

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 Research Stages
• Cyclical process - conclusions generate new
ideas
• Stages can overlap chronologically
• Stages are functionally interrelated
– Forward linkages: Earlier stages influence the later
stages. Thus, the research objectives outlined in
the first stage affect the sample selection and data
collection
– Backward linkages: Later steps influence earlier
stages of the research process
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 Defining the Research Objectives
• The goals to be achieved by conducting research
– Deliverables: The term used often in consulting to
describe research objectives to a research client
• Different types of objectives lead to different
types of research designs
– Exploring the possibilities of entering a new market:
Exploratory research
– Testing the effect of some policy change on employee
job satisfaction: Causal Research
• Objectives cannot really be determined until a
problem is identified

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 Exploratory Research Techniques
Two Examples
• Secondary data (historical data)
– Previously collected
– Census of population
– Literature survey
• Pilot study: A small-scale research project that collects
data from respondents similar to those to be used in
the full study
– Pretest: A small-scale study in which the results are only
preliminary and intended only to assist in design of a
subsequent study
– Focus Group: A small group discussion about some
research topic led by a moderator who guides discussion
among the participants. i.e. reaction to sales promotion
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Linking Research Objectives with Hypothesis

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 Research Design
• A plan that specifies the methods and procedures
for collecting and analyzing the needed
information
– Provides a framework or plan of action
• The researcher determines-
– The basic research method i.e.
• Survey
• Experiments
• Secondary data
• Observation
– The sources of information
– Sampling
– Data Collection
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 Data Processing and Analysis
• After the fieldwork has been completed, the
data must be converted into a format that will
answer the manager’s questions
– Editing
– Coding
– Data Analysis

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 Conclusions And Report Writing
• Effective communication of the research
findings

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 Research Proposal
• A written statement of the research design
that includes a statement explaining the
purpose of the study
• Detailed outline of procedures associated with
a particular methodology

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 Research Program Strategy
• Research project vs. research program
– A research project addresses one of a small
number of research objectives that can be
included in a single study
• For example determining an IPO stock price
– In contrast, a research program represents a
series of studies addressing multiple research
objectives.

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End