The Nature of Business & The Nature of Business & Management ResearchManagement Research

The Nature of Business & The Nature of Business & Management ResearchManagement Research

ABDM4064 BUSINESS RESEARCHABDM4064 BUSINESS RESEARCH

byStephen Ong

Principal Lecturer (Specialist)Visiting Professor, Shenzhen

University

Topics of DiscussionTopics of Discussion Introduction to ResearchIntroduction to Research What is Research?What is Research? Research and BusinessResearch and Business Business Managers and ResearchBusiness Managers and Research Approach to Business ResearchApproach to Business Research

What is Research?What is Research? Robert has Developed ‘Protein-based Computer Robert has Developed ‘Protein-based Computer

Memories”.Memories”. ““Many agree that any kind of Malaria Vaccine is not Many agree that any kind of Malaria Vaccine is not

perfect”.perfect”. ““Government (Malaysian) will amend the Companies Government (Malaysian) will amend the Companies

Act soon to enhance Corporate Governance”.Act soon to enhance Corporate Governance”. ““US FDI shifts to service-Based Business (in US FDI shifts to service-Based Business (in

Malaysia)”.Malaysia)”. ““Global Oil Production Up 185000 bpd in November Global Oil Production Up 185000 bpd in November

2002”2002”

What Research Is NotWhat Research Is Not

Research isn’t information gathering:Research isn’t information gathering: Gathering information from resources such books Gathering information from resources such books

or magazines isn’t research.or magazines isn’t research. No contribution to new knowledge.No contribution to new knowledge.

Research isn’t the transportation of facts:Research isn’t the transportation of facts: Merely transporting facts from one resource to Merely transporting facts from one resource to

another doesn’t constitute research.another doesn’t constitute research. No contribution to new knowledge although this No contribution to new knowledge although this

might make existing knowledge more accessible.might make existing knowledge more accessible.

What Research IsWhat Research Is

Research is:Research is:

“…the systematic process of collecting and analyzing information (data) in order to increase our understanding of the phenomenon about which we are concerned or interested.”

ResearchResearch Research is the way of thinking, examining Research is the way of thinking, examining

critically the various aspects of your critically the various aspects of your profession, understanding and formulating profession, understanding and formulating guiding principles that govern a particular guiding principles that govern a particular procedure and developing and testing new procedure and developing and testing new theories for the enhancement of your theories for the enhancement of your profession. It is a habit of questioning about profession. It is a habit of questioning about what you do and empirical examination to what you do and empirical examination to find answers, with a view to instituting find answers, with a view to instituting appropriate changes for a more effective appropriate changes for a more effective professional services.professional services.

Business research is defined as the systematic and objective process of generating information for solving a problem or finding solution to a complex issue (aid in making business decisions).

Business Research DefinedBusiness Research Defined

Business ResearchBusiness Research Literally, research (re-search) -“search Literally, research (re-search) -“search

again” again” Business research must be objectiveBusiness research must be objective Detached and impersonal rather than Detached and impersonal rather than

biasedbiased It facilitates the managerial decision It facilitates the managerial decision

process for all aspects of a business.process for all aspects of a business.

Objectives of Business Objectives of Business ResearchResearch

To extends knowledgeTo extends knowledge To discovered new informationTo discovered new information Theory buildingTheory building To verify and test existing facts and theoryTo verify and test existing facts and theory To analysis inter-relationships between To analysis inter-relationships between

variablesvariables Aims to find solution to current problemAims to find solution to current problem In total, to make more effective professional In total, to make more effective professional

services services

Types/Classifications of Types/Classifications of ResearchResearch

The research can be classified from The research can be classified from three perspectives:three perspectives: ApplicationApplication

Basic or pure and applied researchBasic or pure and applied research ObjectivesObjectives

Exploratory, Descriptive, or explanatory Exploratory, Descriptive, or explanatory (causal, hypothesis testing)(causal, hypothesis testing)

Type of informationType of information Qualitative and quantitative Qualitative and quantitative

Figure 1.1 Basic and applied researchSources: Authors’ experience; Easterby-Smith et al. (2008), Hedrick et al. (1993)

Types of Research Types of Research (Basic)(Basic)

Basic ResearchBasic Research Generating scientific knowledge for future use Generating scientific knowledge for future use

(Common use). It also known as pure or (Common use). It also known as pure or fundamental research. Basic research is fundamental research. Basic research is undertaken for the sake of knowledge without any undertaken for the sake of knowledge without any intention to apply it in practice. It is undertaken intention to apply it in practice. It is undertaken out of intellectual curiosity. It may lead to out of intellectual curiosity. It may lead to discovery of new theory or refinement of an discovery of new theory or refinement of an existing theory. The findings or basic research existing theory. The findings or basic research enrich the storehouse of knowledge that can be enrich the storehouse of knowledge that can be drawn upon in future to formulate significant drawn upon in future to formulate significant practical research.practical research.

Types of Research Types of Research (Applied)(Applied)

Applied Research:Applied Research: Applied research is carried on to find Applied research is carried on to find

solution to a real life problem oriented and solution to a real life problem oriented and action directed. It seeks an immediate and action directed. It seeks an immediate and practical results. However, it may practical results. However, it may indirectly contribute to the development of indirectly contribute to the development of theoretical knowledge by leading to a theoretical knowledge by leading to a discovery of new facts or testing of a discovery of new facts or testing of a theory or to conceptual clarity.theory or to conceptual clarity.

Basic ResearchBasic Research Attempts to expand the limits of Attempts to expand the limits of

knowledge.knowledge. Not directly involved in the solution to Not directly involved in the solution to

a practical problem.a practical problem.

Basic Research ExampleBasic Research Example

Is executive success correlated with Is executive success correlated with high need for achievement?high need for achievement?

Coupons versus rebates as demand Coupons versus rebates as demand stimulation tacticsstimulation tactics

Compensation Systems and Labour Compensation Systems and Labour ProductivityProductivity

Factors determining share pricesFactors determining share prices

Applied ResearchApplied Research

Conducted when a decision must be Conducted when a decision must be made about a specific real-life problemmade about a specific real-life problem

Applied Research ExamplesApplied Research Examples

Should McDonalds add Should McDonalds add Italian pasta dinners to its Italian pasta dinners to its menu?menu? Business research told Business research told

McDonald’s it should not?McDonald’s it should not? Should Procter & Gamble add Should Procter & Gamble add

a high-priced home teeth a high-priced home teeth bleaching kit to its product bleaching kit to its product line?line? Research showed Crest White Research showed Crest White

strips would sell well at a retail strips would sell well at a retail price of RM44price of RM44

Basic Differences Between Basic Differences Between Basic and Applied ResearchBasic and Applied Research

Applied ResearchApplied Research ““what is the problem” is what is the problem” is

an important step in an important step in resolving that problem.resolving that problem.

What problems to What problems to analysis may be outside analysis may be outside the individual researcher the individual researcher domaindomain

Researcher role is Researcher role is examine analytically and examine analytically and a course of action a course of action recommendedrecommended

Basic ResearchBasic Research Problem based on the Problem based on the

researcher interest to researcher interest to explain and explain and understanding of the understanding of the subjectsubject

Selection of the problem Selection of the problem is totally the choice of is totally the choice of the researcherthe researcher

Some value judgment Some value judgment may be made, action is may be made, action is not recommendednot recommended

Exploratory ResearchExploratory Research

It is undertaken to find out ‘It is undertaken to find out ‘what is what is happeninghappening, to seek insights, to ask , to seek insights, to ask question and to assess phenomena in question and to assess phenomena in a new light. It is useful if you wish to a new light. It is useful if you wish to clarify your understanding of a clarify your understanding of a problem. This is carried out to problem. This is carried out to investigate the possibilities of investigate the possibilities of undertaking a particular research undertaking a particular research study.study.

Descriptive ResearchDescriptive Research

Attempts to Attempts to describe systematically describe systematically a a situation, problem, phenomenon, situation, problem, phenomenon, progamme or provide information progamme or provide information about living conditions, or describes about living conditions, or describes attitudes towards an issue.attitudes towards an issue.

Correlation ResearchCorrelation Research

Discover the relationship/ association / Discover the relationship/ association / interdependenceinterdependence between two or more between two or more variables or situations. variables or situations.

Explanatory ResearchExplanatory Research

Study and explain the Study and explain the exact exact relationshiprelationship between two or more between two or more variables.variables.

Research and BusinessResearch and Business

Primary objective is to provide Primary objective is to provide information that improves the decision-information that improves the decision-making process of an organization.making process of an organization.

These information reduce managerial These information reduce managerial uncertainty in each stages of uncertainty in each stages of development and implementation of a development and implementation of a strategy.strategy.

Business Managers and Business Managers and ResearchResearch

Nestlé's Regional Revamp.Nestlé's Regional Revamp. Debt-restructuring exercise helps Debt-restructuring exercise helps

put water-meter Manufacturer back put water-meter Manufacturer back on its feet.on its feet.

Inproser Bhd claims its product Inproser Bhd claims its product can help poultry farmers slash can help poultry farmers slash cost.cost.

““Celcom – TM Touch Merges”.Celcom – TM Touch Merges”.

The Decision-making Process The Decision-making Process Associated with the Development Associated with the Development and Implementation of a Strategyand Implementation of a Strategy

Identifying problems and opportunitiesIdentifying problems and opportunities Diagnosis and assessmentDiagnosis and assessment Selecting and implementing a course of Selecting and implementing a course of

actionaction Evaluating the course of actionEvaluating the course of action

Determining When to Conduct Determining When to Conduct Business ResearchBusiness Research

Time constraintsTime constraints Availability of dataAvailability of data Nature of the decisionNature of the decision Benefits versus costsBenefits versus costs

Is sufficient time available before

a managerial decision

must be made?

Is the infor-mation already

on handinadequate for making

the decision?

Is the decision of considerable

strategicor tactical

importance?

Does the value of the research

informationexceed the cost of conducting

research?

ConductingBusinessResearch

Do Not Conduct Business Research

Time ConstraintsAvailability of

Data Nature of the DecisionBenefits vs. Costs

Yes YesYesYes

No No No No

Determining When to Conduct Determining When to Conduct Business ResearchBusiness Research

Value versus CostsValue versus Costs Potential Value of a Business Potential Value of a Business

Research Effort Should Exceed Its Research Effort Should Exceed Its Estimated CostsEstimated Costs

Value

•Decreased uncertainty•Increased likelihood of a correct decision•Improved business performance and resulting higher profits

Costs•Research expenditures•Delay of business decision and possible disclosure of information to rivals•Possible erroneous research results

Value Should Exceed Value Should Exceed Estimated CostsEstimated Costs

Why should a Manager Know Why should a Manager Know Research?Research?

Facilitate good decision makingFacilitate good decision making Become discriminating about research Become discriminating about research

findingsfindings Issues of inside versus outside Issues of inside versus outside

researcherresearcher To share relevant information with To share relevant information with

researcherresearcher Understand complex issues, variables, Understand complex issues, variables,

calculate risk, probabilities, etc.calculate risk, probabilities, etc.

Internal ResearcherInternal Researcher Advantages:Advantages:

Better acceptance from the staffBetter acceptance from the staff Knowledge about the organizationKnowledge about the organization Would be integral part of implementation and Would be integral part of implementation and

evaluation of the research recommendationsevaluation of the research recommendations

Limitations:Limitations: Less fresh ideasLess fresh ideas Power PoliticsPower Politics May not be valued as experts by staffMay not be valued as experts by staff

External ResearcherExternal Researcher Advantages:Advantages:

Divergent and convergent thinkingDivergent and convergent thinking Experience from several situationsExperience from several situations Better technical trainingBetter technical trainingLimitations:Limitations:

Time to understand the organizational systemTime to understand the organizational systemCooperation from the staffs is not easyCooperation from the staffs is not easy

Leakage of business secretesLeakage of business secretesNot available for evaluation after implementationNot available for evaluation after implementationcostcost

Approach to Business Approach to Business ResearchResearch

Scientific ResearchScientific Research Characteristics of Scientific ResearchCharacteristics of Scientific Research Process of Scientific ReasoningProcess of Scientific Reasoning Hypothetico-deductive MethodHypothetico-deductive Method

Case StudyCase Study Action ResearchAction Research

Characteristics of Scientific Characteristics of Scientific ResearchResearch

Purposive Purposive RigorRigor TestabilityTestability ReplicabilityReplicability Precision and ConfidencePrecision and Confidence ObjectivityObjectivity ParsimonyParsimony

Scientific Approach and Scientific Approach and Business ResearchBusiness Research

It is not always possible to conduct It is not always possible to conduct investigation 100 percent scientific in business investigation 100 percent scientific in business research. Unlike the physical sciences, the research. Unlike the physical sciences, the results obtained will not be exact and error free, results obtained will not be exact and error free, since most of the business research deals with since most of the business research deals with human behavior. It is very difficult to measure human behavior. It is very difficult to measure and collect of subjective information like, and collect of subjective information like, feelings, emotions, attitudes and etc. Hence, it feelings, emotions, attitudes and etc. Hence, it may not possible for comparability, consistency may not possible for comparability, consistency and wide generalizability in most of the and wide generalizability in most of the business research.business research.

Logical Reasoning ProcessLogical Reasoning Process

InductionInduction The inductive method consists of studying The inductive method consists of studying

several individual cases and drawing a several individual cases and drawing a generalization. It involves two process – generalization. It involves two process – observation and generalization. Conclusions from observation and generalization. Conclusions from induction are tentative inferences and they are induction are tentative inferences and they are subject to further conformation based on more subject to further conformation based on more evidence.evidence.

DeductionDeduction Deduction is reasoning process of applying a Deduction is reasoning process of applying a

general accepted principle to a specific individual general accepted principle to a specific individual case falling under the general principle.case falling under the general principle.

InductionInduction

Form of reasoning – bottom upForm of reasoning – bottom up

ObservationsMeasures

Identifying Patterns

Tentative Hypothesis or

proposition

Theory

Induction MethodInduction Method

Example: “Advertising Expenditure Example: “Advertising Expenditure and Sales”and Sales” Observe the facts, collect relevant Observe the facts, collect relevant

data, then look for the pattern or data, then look for the pattern or summarize the observation and summarize the observation and finally tentative conclusions.finally tentative conclusions.

When followed: When new facts are When followed: When new facts are studied, new truth are uncovered. studied, new truth are uncovered.

DeductionDeduction

Top down reasoningTop down reasoning

Theory

HypothesisTo test

Observations to address the hypothesis

Test the hypothesis with specific data

Confirm/or disconfirm the original hypothesis

Deductive MethodDeductive Method

Reasoning form the general to the particularReasoning form the general to the particular

Like: All Men are mortalLike: All Men are mortal

““A” is a manA” is a man

Conclusion: “A” is mortalConclusion: “A” is mortal

Example: “Advertising Expenditure and Sales”Example: “Advertising Expenditure and Sales”

Hypothesis: “There is a positive relationship Hypothesis: “There is a positive relationship between expenditure on advertising and sales between expenditure on advertising and sales revenue”revenue”

Make ObservationMake Observation

Accept or reject hypothesis.Accept or reject hypothesis.

Hypothetico-deductive Hypothetico-deductive MethodMethod

The method of starting with a The method of starting with a theoretical framework, formulating theoretical framework, formulating hypotheses and logically deducing hypotheses and logically deducing from the results of the study is known from the results of the study is known as the hypothetico-deductive method. as the hypothetico-deductive method. This method is much popular in This method is much popular in business research. This method business research. This method involves seven important steps.involves seven important steps.

Process in Hypothetico-Process in Hypothetico-deductive Methoddeductive Method

ObservationObservation Preliminary information gatheringPreliminary information gathering Theory formulationTheory formulation HypothesizingHypothesizing Data collectionData collection Data AnalysisData Analysis DeductionDeduction

Case StudyCase Study It examine complex factors involved in a given It examine complex factors involved in a given

situation so as to identify causal factors operating situation so as to identify causal factors operating in it. A case study aims at studying everything in it. A case study aims at studying everything about something rather than something about about something rather than something about everything, as in the case of a statistical method everything, as in the case of a statistical method or quantitative analysis. In quantitative analysis, or quantitative analysis. In quantitative analysis, ‘individual’ disappears and in the case of case ‘individual’ disappears and in the case of case study ‘individual’ representing the wholeness.study ‘individual’ representing the wholeness.

Example: A Study of Labour Participation in Management in a Example: A Study of Labour Participation in Management in a particular Enterpriseparticular Enterprise A Study of life-style of Working Women.A Study of life-style of Working Women.

Suitability: This flexible method provide much information Suitability: This flexible method provide much information about the unit of analysis. However, it has limited use in about the unit of analysis. However, it has limited use in business research due to its limited generalization and business research due to its limited generalization and it is a time consuming method of research.it is a time consuming method of research.

Action ResearchAction Research It is a type of evaluation study. It is a It is a type of evaluation study. It is a

concurrent evaluation study of an action concurrent evaluation study of an action programme launched to solve a problem or programme launched to solve a problem or to improve an existing situation. It consists to improve an existing situation. It consists of a number of phases, like, base-line survey, of a number of phases, like, base-line survey, systematic action and assessment. It is a systematic action and assessment. It is a concurrent evaluation study of an action concurrent evaluation study of an action programme launched for solving a programme launched for solving a problem/for improving an existing situation.problem/for improving an existing situation.

Figure 1.2 The research processSource: © Mark Saunders, Philip Lewis and Adrian Thornhill 2011

1 - 46Figure 1.1 A simple concept map showing representation of competitive advantageSource: Institute for Manufacturing (www.ifm.eng.cam.ac.uk/csp/news/05april/4.html)

1 - 47Figure 1.2 Grand, middle-range and substantive theoriesSource: Saunders et al. (2009), developed from Creswell (2008)

1 - 48

Video Study Video Study

““Supersize Me” or Supersize Me” or ““Why is America so FAT?”Why is America so FAT?”

2 - 49

How Creative Are You?How Creative Are You? HundredHundred

Chun HundredChun Hundred

Chun HundredChun Hundred

Chun HundredChun Hundred

Chun HundredChun Hundred

OO

RR

H EH E

S WS W

S S

Umph Umph UmphUmph Umph Umph

Of the SpiritOf the Spirit Grace.Grace.

StandStand

II S MediaS Media

2 1111 STO CK2 1111 STO CK THEBLUEFACETHEBLUEFACE IntensityIntensity

S H E E TS H E E T

ObjectionObjection

RuledRuled W E B W E B Roll RollRoll Roll

Roy RoyRoy Roy Tomb of 210,NTomb of 210,N

Scholar

2 - 50

Brainstorming GuidelinesBrainstorming Guidelines

Keep the group small – “Two pizza rule.”Keep the group small – “Two pizza rule.” Make the group as diverse as possible.Make the group as diverse as possible. Emphasize that company rank is Emphasize that company rank is

irrelevant.irrelevant. Have a well-defined problem, but don’t Have a well-defined problem, but don’t

reveal it ahead of time.reveal it ahead of time. Limit the session to 40 to 60 minutes.Limit the session to 40 to 60 minutes. Take a field trip.Take a field trip. Appoint a recorder.Appoint a recorder.

2 - 51

Brainstorming GuidelinesBrainstorming Guidelines

Use a seating pattern that encourages Use a seating pattern that encourages interaction.interaction.

Throw logic out the window.Throw logic out the window. Encourage Encourage allall ideas from the team. ideas from the team. Shoot for Shoot for quantityquantity of ideas over of ideas over qualityquality of of

ideas. ideas. ForbidForbid criticism. criticism. Encourage idea “hitch-hiking.” Encourage idea “hitch-hiking.” Dare to imagine the unreasonable. Dare to imagine the unreasonable.

1 - 52

Further ReadingFurther Reading

ZIKMUND, W.G., BABIN, B.J., CARR, J.C. AND GRIFFIN, M. (2010) BUSINESS RESEARCH METHODS, 8TH EDN, SOUTH-WESTERN

SAUNDERS, M., LEWIS, P. AND THORNHILL, A. (2012) RESEARCH METHODS FOR BUSINESS STUDENTS, 6TH EDN, PRENTICE HALL.

SAUNDERS, M. AND LEWIS, P. (2012) DOING RESEARCH IN BUSINESS & MANAGEMENT, FT PRENTICE HALL.

2 - 53

How Creative Are You? How Creative Are You? ANSWERSANSWERS

Fortune 500Fortune 500 Scattered Scattered ShowersShowers

Triumph of the Triumph of the SpiritSpirit

Grace PeriodGrace Period

Rhodes ScholarRhodes Scholar I UnderstandI Understand Spring BreakSpring Break Media BiasMedia Bias

Two for One Two for One Stock SplitStock Split

Blue in the FaceBlue in the Face High IntensityHigh Intensity SpreadsheetSpreadsheet

Objection Objection OverruledOverruled

Web Links Web Links Rolls RoyceRolls Royce Tomb of Tomb of TutankhamenTutankhamen