2. Why Research in Business?
• Information
• Interpretation
Example: New Coke in 1985: what went wrong?
Before the launch: Survey
• Loyal consumers were divided about the change in taste of Coke
• Loyal consumers also drink Pepsi, for its sweeter taste
Focus Group:
• Dissatisfaction about the taste
After the Launch things didn’t work. Why?
• The research was erroneous/ interpretations were wrong
• They didn’t attach much importance to the consumers’ emotional
attachment with the original brand
3. Stimulators for Business Research
• Internet and information
• Stakeholders’ influence
• Competition
• Government intervention
• Complex decisions
• Computing power and speed
4. Computing Power and Speed
Real-time
Access
Real-time
Access
Lower-cost
Data
Collection
Powerful
Computation
Powerful
Computation
Better
Visualization
Tools
Better
Visualization
Tools
Integration of
Data
Integration of
Data
FactorsFactors
5. Business Research
• A process of determining, acquiring,
analyzing, synthesizing, and disseminating
relevant business data, information, and
insights to decision makers in ways that
mobilize the organization to take
appropriate business actions that,
in turn, maximize business performance
6. Relevance & Significance of Research
Relevance
• It’s very useful in solving operational and planning problems of
industry and business
• It’s a necessity in today’s business environment as it has become
essential for surviving in today’s world
Significance
• It reduces uncertainty by providing information that improves the
decision making process
• Its contribution is valuable to the business of the company involved
because it unfolds different directions of thinking, adds to existing
knowledge and leads to different findings that may be useful for
implementation
7. How to Proceed about Business Research?
• Satisfy customer groups: Consumers, Employees,
Shareholders etc.
• Controllable variables: Product, Pricing, Promotion,
Distribution
• Uncontrollable factors: Economy, regulations, political
and social factors etc.
• The decision maker needs info on customers, competitors
and other forces. Sound information is key to the correct
management decisions
• Having the info and analysing it: research can provide
meaningful insights to facilitate decision making
8. Business Planning Drives Business
Research
Organizational
Mission
Business
Goals:
sales, productivity,
profitability, efficiency etc.
Business
Strategies
Business
Tactics:
Activities executing
a strategy
Decision Support :
DSS, BIS
DSS:
Numerous elements of data
organized for retrieval and use in
Business decision making;
Stored and retrieved via Intranets,
Extranets
BIS:
Ongoing information
Collection; Focused on events,
trends in micro and
macro-environments
9. Purpose of Business Research
• Identify opportunities/problems
• Defina/ refine strategies
• Define/refine tactics
• Improve understanding about different
aspects of business
10. Hierarchy of Business Decision Makers
Visionaries
Intuitive Decision Makers
Standardized
Decision Makers
Visionaries
11. Who Conducts Research?
• Internal Research Suppliers
• External Research Suppliers
– Research Firms
– Communication Agencies
– Consultants
12. When to Conduct Research
• Can It Pass These Tests?
• Can information be applied to a critical
decision?
• Will the information improve managerial
decision making?
• Are sufficient resources available?
• Will the time permit?
13. When should Business Research be conducted?
Issufficient
time
available
before
amanagerial
decision
must
bemade?
Isthe
information
already on
hand
inadequate
for making
thedecision?
Isthe
decision
of
considerable
Strategic or
Tactical
importance?
Doesthe
Valueof the
Research
Information
Exceed the
Cost of
Conducting
research?
Conduct
Business
Research
Business Research Should Not be Conducted
Yes Yes Yes
Yes
No No No No
Time
Constraint
Availability
of data
Nature of
decision
Benefits vs
costs
14. Characteristics of
Good Research
Clearly defined purposeClearly defined purpose
Detailed research processDetailed research process
Thoroughly planned designThoroughly planned design
High ethical standardsHigh ethical standards
Limitations addressedLimitations addressed
Adequate analysisAdequate analysis
Unambiguous presentationUnambiguous presentation
Conclusions justifiedConclusions justified
CredentialsCredentials
16. Problem No. 2
A finance company has its own agents in
the rural areas as well as urban areas. Its
Fixed Deposit market in rural areas are
quite good. Now, the company wants to
explore the market for insurance through its
own distribution channel. How the
company will do it?
18. Problem No. 4
• Kellogg’s experienced a slump in the
market. Why?
Identification
• How to solve the problem?
Solution
19. Problem No. 5
How to recover old (disconnected) phone sets
from the consumers?
20. Problem No. 6
• A not-very-much-known pharmaceutical
company wants to increase its market share
and also make its presence felt in way of
some other related products/ services
21. Research ProblemsResearch Problems
From the research idea one has to think of a general research question and formulate a
research problem. E.g. you are interested about NGOs in India. From this you have to make
a research question like, how their work is doing good to our people and/or how their
fundings are coming
Examples of Research ProblemsExamples of Research Problems
Marketing
Market Potentials/share/segmentation/characteristics
Advertising research
Product Launching
Design of advertisements
Purchasing Pattern of Consumers
Finance
Credit Card Industry
Mergers and acquisitions
General Business
Forecasting
Industry trends
Global environments
22. Some More Specific Business Research Topics:
Marketing
• Factors Influencing Expenditure on Consumption of Milk and Milk Product in
Chennai
• Demographic Factor: A Determinant for the Purchase Decision of
Motorcycles in Kanchipuram Town (Tamil Nadu)
• A Survey of Consumer Awareness about Consumer Legislations in India.
• Consumer Behavior towards Mobile Service Providers: An Empirical Study
Finance
• Inter - Industry Differences in Capital Structure: Evidence from India
• Accumulation of Market Power in Mergers and Acquisitions: Evidence from
the Indian Pharmaceutical Industry
• Effect of Expiration - Day of Derivatives on Price, Volume and Volatility of
Cash Segment of Stock Market
HR
• Climate Profile and Organizational Citizenship Behaviors: A Comparative
Analysis of Teachers Working in Public and Private Schools
23. Steps of Research
• Planning
Establish Research Objective
Formulation of a Research Problem
Preparation of the Research Design
• Operation
Data Collection
Analysis of Data
Interpretation of Results
• Reporting
Drafting: a summary of the process
Findings
Suggestion for further research
24. Basic Tenets of Research
• Scientific Method (sound reasoning)
– Direct observation
– Clearly defined variables/methods
– Empirically testable hypotheses
– Statistical justification of conclusions
– Self-correcting process
– Sound Reasoning: Exposition and Argument
– Deduction (conclusive: strong bond b/w reason
and conclusion)
– Induction
25. Deductive Reasoning
Inner-city household
interviewing is especially
difficult and expensive
Inner-city household
interviewing is especially
difficult and expensive
This survey involves
substantial inner-city
household interviewing
This survey involves
substantial inner-city
household interviewing
The interviewing in this
survey will be especially
difficult and expensive
The interviewing in this
survey will be especially
difficult and expensive
26. Inductive Reasoning
• Why didn’t sales increase during the
promotional event?
– Regional retailers did not have sufficient stock to
fill customer requests during the promotional
period
– A strike by employees prevented stock from
arriving in time for promotion to be effective
– A hurricane closed retail outlets in the region for
10 days during the promotion
28. Basic Tenets of Research
• Language of Research
– Concepts
– Constructs
– Definitions
– Variables
– Propositions
& Hypothesis
– Theory
– Models
29. A Variable Is the Property Being
Studied
VariableVariable
EventEvent ActAct
CharacteristicCharacteristic TraitTrait
AttributeAttribute
30. Types of Variables
DichotomousDichotomous
Male/Female
Employed/ Unemployed
Male/Female
Employed/ Unemployed
DiscreteDiscrete
Ethnic background
Educational level
Religious affiliation
Ethnic background
Educational level
Religious affiliation
ContinuousContinuous
Income
Temperature
Age
Income
Temperature
Age
35. Moderating Variables (MV)
• The introduction of a four-day week (IV) will lead to
higher productivity (DV), especially among younger
workers (MV)
• The switch to commission from a salary
compensation system (IV) will lead to increased sales
(DV) per worker, especially more experienced
workers (MV).
• The loss of mining jobs (IV) leads to acceptance of
higher-risk behaviors to earn a family-supporting
income (DV) – particularly among those with a
limited education (MV).
36. Extraneous Variables (EV)
• With new customers (EV-control), a switch to
commission from a salary compensation system (IV)
will lead to increased sales productivity (DV) per
worker, especially among younger workers (MV).
• Among residents with less than a high school education
(EV-control), the loss of jobs (IV) leads to high-risk
behaviors (DV), especially due to the proximity of the
firing range (MV).
37. Intervening Variables (IVV)
• The switch to a commission compensation system
(IV) will lead to higher sales (DV) by increasing
overall compensation (IVV).
• A promotion campaign (IV) will increase savings
activity (DV), especially when free prizes are offered
(MV), but chiefly among smaller savers (EV-control).
The results come from enhancing the motivation to
save (IVV).
38. Hypothesis Formats
•Descriptive Hypothesis
–In Detroit, our potato chip market share stands at
13.7%.
–American cities are experiencing budget difficulties.
•Research Question
–What is the market share for our potato chips in Detroit?
–Are American cities experiencing budget difficulties?
•Proposition and Hypothesis
39. Relational Hypotheses
•Correlational
•Young women (under 35)
purchase fewer units of our
product than women who
are older than 35.
•The number of suits sold
varies directly with the level
of the business cycle.
•Causal
•An increase in family
income leads to an increase
in the percentage of income
saved.
•Loyalty to a grocery store
increases the probability of
purchasing that store’s
private brand products.
40. The Role of Hypotheses
Guide the direction of the studyGuide the direction of the study
Identify relevant factsIdentify relevant facts
Suggest most appropriate research designSuggest most appropriate research design
Provide framework for organizing resulting
conclusions
Provide framework for organizing resulting
conclusions
41. • Research Hypotheses: The formulation of hypotheses or propositions that
may be possible answers to research questions is an important step in the
process of formulating the research question. The hypothesis is a testable
proposition. This particular aspect needs to be discussed in some detail.
Sources of Hypothesis
• Theory (Testing efficient market hypothesis for Indian data)
• Observation (girls are more serious about attending classes than boys)
• Analogies (Loyal customers expect better post purchase service for
consumer durables……..)
• Intuition & experience
• Previous research findings (there exists co-movement in stocks……this
motivated me in finding out whether the volatility in those stocks trigger
more volty in our market or not)
• Existing literature/ state of knowledge
• Culture / Socio-economic environment
• Continuity of research (FII nature followed by FII volatility)
41
42. Characteristics of a good hypothesis
It should be:
• Conceptually clear
• Specific
• Testable
• Should have applicability of techniques
• Theoretically relevant
• Consistent
• Objective
• Not very complex
42
43. How to Develop a Hypothesis: The Rules
Take the variable measurements with the most quantitative
characteristics available
Make the measurement of the scale (of the variable) explicit
and clear
Use the variables which can be clearly defined and commonly
accepted, do not use vague terms
Try to be more specific, e.g. link two or more formal
propositions through a common variable if possible
43
44. Testing of Statistical Hypotheses
Hypothesis is only a hunch or a provisional idea that
should be tested by proper methods and the result
may be either acceptance or rejection. The researcher
should not try to ‘prove’ the hypothesis, but try to
‘test’ it.
Type I and Type II errors are associated with it:
Type I: Reject the hypothesis when it is true
Type II: Accept the hypothesis when it is false
44
45. Criteria for judging hypothesis
• One can evaluate the hyp. using the criteria suggested
by Goode & Hatt whether it is conceptually clear, has
empirical reference, specific, related to techniques
and related to any theory or not.
• According to Clover & Basley, the criteria are:
whether all the aspects are covered, all the
possibilities considered and the hypothesis is strongly
related to the research question or the problem.
45
46. Theory & Model
• Theory: a set of systematically interrelated
concepts/definitions/propositions to explain
facts
• Model: representation of a system
An organization’s mission drives its business goals, strategies, and tactics and, consequently, its need for business decision support systems and business intelligence. Students need to understand the differences in these concepts to fully understand what drives a manager to seek solutions through research.
Exhibit 1-2
Exhibit 1-2 illustrates the hierarchy of business decision makers.
In the bottom tier, most decisions are based on past experience or instinct. Decisions are also supported with secondary data searches.
In the middle tier, some decisions are based on business research.
In the top tier, every decision is guided by business research. Firms develop proprietary methodologies and are innovative in their combination of methodologies. There is access to research data and findings throughout the organization.
Exhibit 1-5 presents the characteristics of good business research and also explains what managers should look for in research done by others.
You might wish to discuss the concepts here, before you discuss who actually conducts research…or you might want to discuss who conducts research first, followed by this slide to summarize.
This slide provides an example of an inductive argument.
Exhibit 3-8
Induction and deduction can be used together in research reasoning. Induction occurs when we observe a fact and ask, “Why is this?” In answer to this question, we advance a tentative explanation or hypothesis. The hypothesis is plausible if it explains the event or condition (fact) that prompted the question. Deduction is the process by which we test whether the hypothesis is capable of explaining the fact.
Exhibit 3-8 illustrates this process.
In practice, the term variable is used as a synonym for the property being studied. In this context, a variable is a symbol of an event, act, characteristic, trait, or attribute that can be measured and to which we assign categorical values. The different types of variables are presented on the following slides.
For the purposes of data entry and analysis, we assign numerical values to a variable based on that variable’s properties. Dichotomous variables have only two values that reflect the absence or presence of a property. Variables also take on values representing added categories such as demographic variables. All such variables are said to be discrete since only certain values are possible. Continuous variables take on values within a given range or, in some cases, an infinite set.
Exhibit 3-2
Exhibit 3-2 presents the commonly used synonyms for independent and dependent variables.
An independent variable is the variable manipulated by the researcher to cause an effect on the dependent variable.
The dependent variable is the variable expected to be affected by the manipulation of an independent variable.
Moderating variables are variables that are believed to have a significant contributory or contingent effect on the originally stated IV-DV relationship. Whether a variable is treated as an independent or as a moderating variable depends on the hypothesis. Examples of moderating variables are shown in the slide.
Extraneous variables are variables that could conceivably affect a given relationship. Some can be treated as independent or moderating variables or assumed or excluded from the study. If an extraneous variable might confound the study, the extraneous variable may be introduced as a control variable to help interpret the relationship between variables. Examples are given in the slide.
An intervening variable (IVV) is a factor that affects the observed phenomenon but cannot be measured or manipulated. It is a conceptual mechanism through which the IV and MV might affect the DV.
A descriptive hypothesis is a statement about the existence, size, form, or distribution of a variable. Researchers often use a research question rather than a descriptive hypothesis. Examples are provided in the slide. Either format is acceptable, but the descriptive hypothesis has three advantages over the research question.
Descriptive hypotheses encourage researchers to crystallize their thinking about the likely relationships.
Descriptive hypotheses encourage researchers to think about the implications of a supported or rejected finding.
Descriptive hypotheses are useful for testing statistical significance.
A relational hypothesis is a statement about the relationship between two variables with respect to some case. Relational hypotheses may be correlational or explanatory (causal).
A correlational hypothesis is a statement indicating that variables occur together in some specified manner without implying that one causes the other.
A causal hypothesis is a statement that describes a relationship between two variables in which one variable leads to a specified effect on the other variable.
This slide presents the functions served by hypotheses.