Chapter-1:

The role of Business

Research

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 Business Research Defined
Business research is the application of the
scientific method in searching for the truth about
business phenomena.
The process includes:
idea and theory development
problem definition
searching for and collecting information
analyzing data
communicating the findings and their implications

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 Business Research Defined
This definition suggests that business research
information is:
not intuitive or haphazardly gathered
accurate and objective
relevant to all aspects of the business
limited by ones definition of business
Not-for-profit organizations and governmental
agencies can use research in much the same
was as managers in for-profit organizations.

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 Applied and Basic Business Research
Applied business research
conducted to address a specific business decision for
a specific firm or organization.
Example:
Should McDonalds add Italian pasta dinners to its menu?
Which health insurance plan should a business provide for its
employees?

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 Applied and Basic Business Research
Basic business research (also called pure
research)
conducted without a specific decision in mind that
usually does not address the needs of a specific
organization.
Attempts to expand the limits of knowledge in general.
Not aimed at solving a pragmatic problem.

Example:
Do consumers experience cognitive dissonance in low-
involvement situations?
Does employee tenure with a company influence
productivity?

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 The Scientific Method
Scientific Method
The way researchers go about using knowledge and
evidence to reach objective conclusions about the
real world.
The analysis and interpretation of empirical evidence
(facts from observation or experimentation) to confirm
or disprove prior conceptions

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 EXHIBIT 1.1
1.1 A Summary of the Scientific Method

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 Managerial Value of Business Research

There are only a few business orientations:

Product-oriented
Production-oriented
Marketing-oriented

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 EXHIBIT 1.2 Business Orientations

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 Managerial Value of Business Research

The decision-making process associated with

the development and implementation of a
business strategy involves four interrelated
stages:
1. Identifying problems and opportunities
2. Diagnosing and assessing problems or
opportunities
3. Selecting and implementing a course of action
4. Evaluating the course of action

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 Evaluating the Course of Actions
Evaluation Research
The formal, objective measurement and appraisal of
the extent a given activity, project, or program has
achieved its objectives.
Performance Monitoring Research
Research that regularly, sometimes routinely,
provides feedback for evaluation and control of
business activity.

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 When is Business Research Needed?
The determination of the need for research
centers on:
1. Time constraints
2. The availability of data
3. The nature of the decision to be made
4. Benefits versus costs (the value of the research
information in relation to costs)
Will the payoff or rate of return be worth the investment?
Will the information improve the quality of the
managerial decision enough to warrant the expenditure?
Is the expenditure the best use of the available funds?

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 EXHIBIT 1.3 Determining When to Conduct Business Research

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 Business Research in the 21st Century
Communication Technologies
Always connectedtime, place, and distance are
irrelevant.
Decreases in information acquisition, storage, access,
and transmission costs.
Global Business Research
Business research is increasingly global.
Must understand the nature of particular markets.
Cross-validation
Verify that the empirical findings from one culture also exist
and behave similarly in another culture.

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 What Business Research Is Not

Business Research isnt information gathering:

Gathering information from resources such books or magazines isnt
business research.
No contribution to new knowledge.

Business Research isnt the transportation of facts:

Merely transporting facts from one resource to another doesnt
constitute business research.
No contribution to new knowledge although this might make existing
knowledge more accessible.

2016 Cengage Learning India Pvt. Ltd. All rights reserved.