Chapter 01:

The Role of Business Research

 The Nature of Business Research
• Research provides knowledge regarding
organization, the market, the economy, or
another area of uncertainty.
• A financial manager may ask,
– “Will the environment for long-term financing be
better two years from now?”
• A personnel manager may ask,
– “What kind of training is necessary for production
employees?” or
– “What is the reason for the company’s high employee
turnover?”
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 Business Research Defined
• The application of the scientific method in
searching for the truth about business
phenomena.
• These activities include
– defining business opportunities and problems,
– generating and evaluating ideas,
– monitoring performance, and
– understanding the business process.

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 Business Research
• Research information is neither intuitive nor
haphazardly gathered.
– Literally, research (re-search) -“search again”
• Business research have to be objective
• Detached and impersonal rather than
biased
• It facilitates the managerial decision process
for all aspects of a business.
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 Criteria of Good Research
• The purpose of the research should be
clearly defined.
• The research procedure used should be
described in sufficient detail to permit
another researcher to repeat the research
for further advancement, keeping the
continuity of what has already been
attained.

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 Criteria … Contd.
• The procedural design of the research should be
carefully planned to yield results that areas
objective as possible.
• The researcher should report with complete
frankness, flaws in procedural design and estimate
their effects upon the findings.
• The analysis of data should be sufficiently
adequate to reveal its significance and the
methods of analysis used should be appropriate.

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 Criteria … Contd.
• The validity and reliability of the data should be
checked carefully.
• Conclusions should be confined to those justified
by the data of the research and limited to those
for which the data provide an adequate basis.
• Greater confidence in research is warranted if
the researcher is experienced, has a good
reputation in research and is a person of
integrity.

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 Business Research Types
• Basic or Pure Research:
— Research conducted without a specific decision in mind
that usually does not address the needs of a specific
organization.
— It attempts to expand the limits of knowledge in general
and is not aimed at solving a particular pragmatic problem.
— For example: Employee motivation
• Applied Research
— Research conducted to address a specific business
decision for a specific firm or organization.
— For example: How employees of BB react to non-monetary
benefits?
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 Scientific Method
• The way researchers go about using knowledge and evidence
to reach objective conclusions about the real world.

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Managerial Value of Business Research

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 The Decision-making Process
The decision-making process associated
with the development and implementation
of a business strategy involves four
interrelated stages:
– Identifying problems and opportunities
• Dividend history of a stock
– Diagnosis and assessment
– Selecting and implementing a course of action
– Evaluating the course of action

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 Evaluating the course of action
• Evaluation Research
– It is the formal, objective measurement and
appraisal of the extent to which a given
activity, project, or program has achieved its
objectives.
– In addition to business organizations,
nonprofit organizations and governmental
agencies frequently conduct evaluation
research.
– For example: “Kbikha”

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 Evaluating… Contd.
• Performance-monitoring Research:
– Research that regularly provides feedback for
evaluation and control
– Indicates things are or are not going as
planned
– Research may be required to explain why
something “went wrong”
– For example: Performance of Nationalized
Commercial Banks of Bangladesh

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 Determining When to Conduct
Business Research
• Time constraints
• Availability of data:
– If the data cannot be obtained, or it cannot be obtained in a
timely fashion, this particular research project should not be
conducted.
– For example, many African nations have never conducted a
population census.
• Nature of the decision:
– A routine tactical decision that does not require a substantial
investment may not seem to warrant a substantial expenditure
for research.
– For example, a computer company must update its operator’s
instruction manual when it makes minor product modifications.
• Benefits versus costs
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Determining When to Conduct
Business Research

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 Value Should Exceed
Estimated Costs
Costs
Value • Research
expenditures
• Decreased certainty • Delay of business
• Increased likelihood
decision and
of a correct decision
possible disclosure
• Improved business
of information to
performance and
rivals
resulting higher • Possible erroneous
profits
research results

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 Global Business Research
• Increased globalization
• Growth of the Internet and other
information technologies
– General information about country - economic
conditions and political climate
– Cultural and consumer factors
– Market and competitive conditions - demand
estimation
• Cross-validation
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End of Chapter 01

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