Research Methodology Chapter 1. Definition of Research Search for facts – answer to questions and solutions to problems. It is a purposive and organized.

Research Methodology

Chapter 1

Definition of Research

• “Search for facts – answer to questions and solutions to problems. It is a purposive and organized inquiry”.

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).

Definition of Business Research

Business Research

• Literally, research (re-search) -“search again”

• Business research must be objective• Detached and impersonal rather than

biased• It facilitates the managerial decision

process for all aspects of a business.

Objectives of Business Research

• To extends knowledge• To discovered new information• Theory building• To verify and test existing facts and theory• To analysis inter-relationships between

variables• Aims to find solution to current problems

Types of Research

• Basic Research

–Generating scientific knowledge for future use (Common use).

• Applied Research

–Undertaken to solve existing problem.

Basic Research

• Attempts to expand the limits of knowledge.

• Not directly involved in the solution to a practical problem.

Basic Research Example

• Is executive success correlated with high need for achievement?

• Coupons versus rebates as demand stimulation tactics

• Compensation Systems and Labour Productivity

• Factors determining share prices

Applied Research

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

Applied Research Examples

• Should McDonalds add Italian pasta dinners to its menu?– Business research told McDonald’s it

should not?• Should Procter & Gamble add a high-

priced home teeth bleaching kit to its product line?– Research showed Crest White strips

would sell well at a retail price of RM44

Basic Differences Between Basic and Applied Research• Applied Research

– “what is the problem” is an important step in resolving that problem.

– What problems to analysis may be outside the individual researcher domain

– Researcher role is examine analytically and a course of action recommended

• Basic Research– Problem based on the

researcher interest to expand understanding of the subject

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

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

Research and Business

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

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

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

• Identifying problems and opportunities

• Diagnosis and assessment

• Selecting and implementing a course of action

• Evaluating the course of action

Identifying Problem

• Research may be used as scanning activity to provide information about what is occurring within the organization or in the business environment.

• Example: Analysis the Business Environment– Privatization and globalization in the

developing countries– Fast economic growth in developing countries– It all leads to demand for Car

Diagnosis and Assessment

• Managers need to gain insight about the underlying factors causing the situation. They should know what happened, why and how.

• Example: Diagnosis the Demand– What is the expected growth of demand for car– What is the purchasing power of the people in

the developing country– Consumers taste and preference– Competition in the market segment

Selection and Implementation

• Research helps to obtain specific information that will aid in evaluating the alternatives and in selecting the best course of action.

• Example:– Cost effective model to satisfy the consumers

in the developing country– Place of production or export– Choose a place where potential consumers are

more.

Evaluation Research

• Evaluation research is the formal, objective measurement and appraisal of the extent to which a given activity, project, or program has achieved its objectives.

• Example:

–Performance analysis

Determining When to Conduct Business Research

• Time constraints

• Availability of data

• Nature of the decision

• Benefits 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 Constraints

Availability of Data

Nature of the

Decision

Benefits vs. Costs

Yes YesYesYes

No No No No

Determining When to Conduct Business Research

Value versus Costs

• Potential Value of a Business Research Effort Should Exceed Its Estimated 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 Estimated Costs

Why should a Manager Know Research?

• Facilitate good decision making• Become discriminating about research

findings• Issues of inside versus outside researcher• To share relevant information with

researcher• Understand complex issues, variables,

calculate risk, probabilities, etc.

Internal Researcher• Advantages:– Better acceptance from the staff– Knowledge about the organization– Would be integral part of implementation and

evaluation of the research recommendations

• Limitations:– Less fresh ideas– Power Politics– May not be valued as experts by staff

External Researcher• Advantages:– Experience from several situations– Better technical training

Limitations:

Time to understand the organizational system

Cooperation from the staffs is not easy

Not available for evaluation after implementation

cost