abdm4064 week 03 research process

The Research ProcessThe Research ProcessThe Research ProcessThe Research Process

ABDM4064 BUSINESS RESEARCHABDM4064 BUSINESS RESEARCH

byStephen Ong

Principal Lecturer (Specialist)Visiting Professor, Shenzhen University

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LEARNING OUTCOMESLEARNING OUTCOMESLEARNING OUTCOMESLEARNING OUTCOMES

1. Classify business research as either exploratory research, descriptive research, or causal research

2. List the major phases of the research process and the steps within each

3. Explain why proper “problem definition” is essential to useful business research

4. Know how to recognize problems

5. Translate managerial decision statements into relevant research objectives

6. Translate research objectives into research questions and/or research hypotheses

After studying this chapter, you should

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Types of Business ResearchTypes of Business Research

Business research can be classified on the basis of technique (e.g. experiments, surveys, or observation studies) or purpose.

Classifying research on the basis of its purpose, it can be broken into three categories: (1) exploratory, (2) descriptive, and (3) causal.

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Exploratory ResearchExploratory Research

It is conducted to clarify ambiguous situations or discover ideas that may be potential business opportunities.

It is not intended to provide conclusive evidence from which to determine a particular course of action.

It is not an end unto itself – usually it is conducted with the expectation that more research will be needed to provide more conclusive evidence.

It is particularly useful in new product development.

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Descriptive ResearchDescriptive Research It describes characteristics of objects, people,

groups, organizations or environments. It addresses who, what, when, where, and how

questions. It often helps describe market segments. It is conducted with a considerable understanding of

the situation being studied. Diagnostic analysis

Seeks to diagnose reasons for market outcomes and focuses specifically on the beliefs and feelings consumers have about and toward competing products.

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Descriptive Research (cont’d)Descriptive Research (cont’d)

Examples

The average Weight Watchers’ customer Is a female about 40 years old Has a household income of about $50,000 Has at least some college education Is trying to juggle children and a job

Characteristics of leaders Empathetic Resourceful Ability to delegate

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Causal ResearchCausal Research

It allows causal inferences to be made. It seeks to identify cause-and-effect relationships. When something causes an effect, it means it brings

it about or makes it happen; the effect is the outcome.

It usually follows exploratory and descriptive research and, therefore, the researchers are quite knowledgeable about the subject.

Causal Research (cont’d)Causal Research (cont’d) Causal research attempts to establish that when we

do one thing, another thing will follow – a causal inference is just such a conclusion.

A causal inference can only be supported when very specific causal evidence exists, and the three critical pieces of causal evidence are: Temporal Sequence – deals with the time

order of events; having an appropriate causal order of events means the cause must occur before the effect.

i.e. the cause must occur before the effect. E.g. chef changed, sales dropped after that

change.

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Concomitant Variation – occurs when two events “covary,” meaning they vary systematically and a when a change in the cause occurs, a change in the outcome also is observed.

Changes in income level will lead to changes in the spending.

Nonspurious Association – any covariation between a cause and an effect is true and not simply due to some other variable.

E.g. introduction of compulsory attendance in lecture leads to improved attendance in lecture.

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EXHIBIT 4.EXHIBIT 4.22 The Spurious Effect of Ice CreamThe Spurious Effect of Ice Cream

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Causal Research - Degrees of Causal Research - Degrees of CausalityCausality

Absolute Causality The cause is necessary and sufficient to

bring about the effect. E.g. rain - wet floor

Conditional Causality A cause is necessary but not sufficient to

bring about an effect. Rain – wet floor – broken leg

Contributory Causality A cause need be neither necessary nor

sufficient to bring about an effect. Weakest form of causality. Rain – wet floor – quarrel between couples

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Causal Research - ExperimentsCausal Research - Experiments

Experiment A carefully controlled study in which the researcher

manipulates a proposed cause and observes any corresponding change in the proposed effect.

Experimental variable Represents the proposed cause and is controlled

by the researcher by manipulating it. Manipulation

The researcher alters the level of the variable in specific increments.

Test-market An experiment that is conducted within actual

market conditions.

© 2010 South-Western/Cengage Learning. All rights reserved. May not

be scanned, copied or duplicated, or posted to a publically accessible

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EXHIBIT 4.EXHIBIT 4.33 Testing for Causes with an ExperimentTesting for Causes with an Experiment

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COMPLETELYCERTAIN

ABSOLUTEAMBIGUITY

CAUSAL ORDESCRIPTIVE

EXPLORATORY

Uncertainty Influences The Type Of Research

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Exploratory Research Descriptive Research Causal Research(Unaware of Problem) (Aware of Problem) (Problem Clearly Defined)

“Our sales are declining and “What kind of people are buying“ Will buyers purchase more of our we don’t know why.” our product? products in a new package? Who buys our competitor’s

product?” “Would people be interested “Which of two advertising in our new product idea?” “What features do buyers prefer campaigns is more effective?”

in our product?”

poss

ible

sit

uati

on

Degree of Problem Degree of Problem DefinitionDefinition

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EXHIBIT 4.EXHIBIT 4.44 Characteristics of Different Types of Business ResearchCharacteristics of Different Types of Business Research

Uncertainty Influences the Type of Research Conducted

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Stages in the Research Stages in the Research ProcessProcess

Process stages:1. Defining the research objectives2. Planning a research design3. Planning a sample4. Collecting the data5. Analyzing the data6. Formulating the conclusions and preparing

the report Forward linkage—earlier stages influence later stages. Backward linkage—later stages influence earlier stages.

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EXHIBIT 4.EXHIBIT 4.55 Stages of the Research ProcessStages of the Research Process

EXHIBIT 4.EXHIBIT 4.66

Flowchart Flowchart of the of the

Business Business Research Research ProcessProcess

Note: Diamond-shaped boxes indicate stages in the research process in which a choice of one or more techniques must be made. The dotted line indicates an alternative path that skips exploratory research.

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Stages in the Research Process Stages in the Research Process 1. Defining the Research Objectives1. Defining the Research Objectives

It is the beginning of the research process. Research objectives are the goals to be achieved by

conducting research. In consulting, the term deliverables is often used to describe

the objectives to a research client. In applied business research, the objectives cannot be listed

until there is an understanding of the decision situation, which must be shared between the actual decision maker and the lead researcher.

This understanding is often described as a problem statement. A research proposal is a document in which the problem is

stated. This is a process of discovery rather than confirmation.

Stages in the Research Process Stages in the Research Process 1. Defining the Research Objectives1. Defining the Research Objectives

Defining the research problemAn orderly definition of the research problem lends a sense of direction to the investigation.Properly defining a problem can be more difficult than solving it.Defining the decision situation must precede the research objectives.Best place to begin a research project is at the end; that is, knowing what is to be accomplished determines the research process.

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Stages in the Research ProcessStages in the Research Process1. Defining the Research Objectives1. Defining the Research Objectives

Exploratory ResearchExploratory Research can be used to help identify the decisions that need to be made.Once done, the researcher should know exactly which data to collect during formal phases of the project and how to conduct the project.Researchers can employ techniques from four basic categories to obtain insights and gain a clearer idea of the problem:

previous research, pilot studies, case studies, and experience surveys

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Exploratory Research Exploratory Research TechniquesTechniques

Previous Research Literature review

A directed search of published works, including periodicals and books, that discusses theory and presents empirical results that are relevant to the topic at hand.

Pilot Studies A small-scale research project that collects data from respondents

similar to those to be used in the full study. Pretest

A small-scale study in which the results are only preliminary and intended only to assist in design of a subsequent study.

Focus Group A small group discussion about some research topic led

by a moderator who guides discussion among the participants.


Stating Research Objectives After identifying and clarifying the problem, the

researcher must formally state the research objectives.

This statement delineates the type of research that is needed and what intelligence may result that would allow the decision maker to make informed choices.

Represents a contract of sorts that commits the researcher to producing the needed research.

Note: You can refer to Topic 1 for the example

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ExampleExampleResearch idea Research

QuestionsResearch Objectives

Using team briefing in orientation program

1. Why have organisations introduced team briefing?

1. To identify organisations’ objectives for team briefing.

2. Has team briefing been effective?

2. To describe the extent to which the effectiveness criteria for team briefing being met.

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Linking Decision Statements, Objectives, and Hypotheses Hypotheses should be logically derived

from and linked to the research objectives.

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EXHIBIT 4.EXHIBIT 4.77 Example Decision Statements, Research Objectives, and Example Decision Statements, Research Objectives, and Research HypothesesResearch Hypotheses

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Stages in the Research ProcessStages in the Research Process2. Planning the Research 2. Planning the Research DesignDesign

Research Design A master plan that specifies the methods

and procedures for collecting and analyzing the needed information.

Basic design techniques for descriptive and causal research:

Surveys Experiments Secondary data Observation

Stages in the Research ProcessStages in the Research Process2. Planning the Research Design2. Planning the Research Design Determination of which method should be chosen

depends on: objectives of the study available data sources urgency of the decision cost of obtaining data

Most common method is the survey.

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Selection of the Basic Selection of the Basic Research MethodResearch Method

Survey A research technique in which a sample is

interviewed in some form or the behavior of respondents is observed and described.

Telephone

Mail

Internet

In person

Selection of the Basic Research Selection of the Basic Research MethodMethod Observations

It can be mechanically recorded or observed by humans.

One advantage of the observation technique is that it records behaviour without relying on reports from respondents.

Several things of interest (i.e., attitudes, opinions, motivations) cannot be observed.

The “Best” Research Design There is no single best research design. Several alternatives can accomplish the stated

research objectives. Ability to select the most appropriate design

develops with experience.

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Stages in the Research ProcessStages in the Research Process3. 3. Planning a sample

Sampling

Involves any procedure that draws conclusions based on measurements of a portion of the population.

Sampling decisions

Who to sample?—target population What size should the sample be? How to select the sampling units?

Random sample Cluster-sample

Stages in the Research ProcessStages in the Research Process5. Gathering Data5. Gathering Data

This is the process of gathering or collecting information.

It may be gathered by human observers or interviewers or may be recorded by machines (e.g., scanner data).

An unobtrusive method is one in which the subjects do not have to be disturbed for data to be collected.

However the data are collected, it is important to minimize errors in the process.

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Stages in the Research ProcessStages in the Research Process5. Processing and Analyzing 5. Processing and Analyzing

DataData Editing Involves checking the data collection forms

for omissions, legibility, and consistency in classification.

Codes Rules for interpreting, categorizing,

recording, and transferring the data to the data storage media.

Data analysis The application of reasoning to understand

the data that have been gathered.

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Stages in the Research ProcessStages in the Research Process6. Drawing Conclusions and 6. Drawing Conclusions and

Preparing a ReportPreparing a Report Steps in communicating the research findings:

Interpreting the research results Describing the implications Drawing the appropriate conclusions for managerial

decisions

Reporting requirements Conclusions fulfill the deliverables promised in the

research proposal Consider the varying abilities of people to understand the

research results A clearly-written, understandable summary of the research

findings

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Good Decisions Start with a Good Decisions Start with a Good Problem DefinitionGood Problem Definition

Importance of Starting with a Good Problem Definition The chances that a research project will

prove useful are directly related to how well the research objectives correspond to the true business problem.

When the client fails to understand their situation, or when they insist on studying an irrelevant problem, the research is very likely to fail even if it is done properly.

Translating a business situation into something that can be researched begins by coming to a consensus on a decision statement or question.

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Good Decisions Start with a Good Decisions Start with a Good Problem DefinitionGood Problem Definition

Decision Statement A written expression of the key question(s)

that the research user wishes to answer.

Problem Definition The process of defining and developing a

decision statement and the steps involved in translating it into more precise research terminology, including a set of research objectives.

Problem ComplexityProblem Complexity Problem definition - this stage of the research process can

be the most complex. Factors influencing problem complexity include:

Situation Frequency – cyclical, routine problems are easier to define.

Dramatic changes – when sudden change in the business situation takes place, it can be easier to define the problem.

How Widespread are the Symptoms? – the more scattered any symptoms are, the more difficult it is to put them together into some coherent problem statement.

Symptom Ambiguity – the greater the ambiguity of the symptoms, the more difficult it is to define the problem.

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EXHIBIT 6.1EXHIBIT 6.1 Defining Problems Can Be DifficultDefining Problems Can Be Difficult

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The Problem-Definition ProcessThe Problem-Definition Process Problems Mean Gaps

A problem occurs when there is a difference between the current conditions and a more preferable set of conditions (i.e., a gap exists between the way things are now and the way that things could be better).

A gap can come about in a number of ways: 1. Business performance is worse than expected (e.g.,

sales, profits, margins are below targets set by management).

2. Actual business performance is less than possible business performance (note that realization of this gap first requires that management have some idea of what is possible).

3. Expected business performance is greater than possible business performance.

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EXHIBIT 6.2EXHIBIT 6.2 The Problem-Definition ProcessThe Problem-Definition Process

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The Problem-Definition ProcessThe Problem-Definition ProcessStep 1: Understand the Business Step 1: Understand the Business

DecisionDecision Situation Analysis

A situation analysis involves the gathering of background information to familiarize researchers and managers with the decision-making environment.

It often requires exploratory research. The situation analysis begins with an

interview between the researcher and management.

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The Problem-Definition ProcessThe Problem-Definition ProcessStep 1: Understand the Business Decision Step 1: Understand the Business Decision

(cont’d)(cont’d) Interview Process Researcher should be granted access to all

individuals who have specific knowledge or insight of the situation.

It is important that the researcher not blindly accept a convenient problem definition for expediency’s sake.

Helpful hints that can be useful in the interview process include:

1. Develop many alternative problem statements. 2. Think about potential solutions to the problem. 3. Make lists – use free association and interrogative techniques

(i.e., asking multiple what, where, who, when, why, and how questions).

4.Be open-minded.

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Identifying Symptoms Probing is an interview technique that tries to

draw deeper and more elaborate explanations from the discussion with key decision makers.

One of the most important questions to ask – “What has changed?” (i.e., customers, competitors, internal conditions of the company and in the external environment).

Then, the researcher should probe to identify potential causes of the change.

The Problem-Definition ProcessThe Problem-Definition ProcessStep 1: Understand the Business Decision Step 1: Understand the Business Decision (cont’d)(cont’d)

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EXHIBIT 6.3EXHIBIT 6.3 What Has Changed?What Has Changed?

The Problem-Definition ProcessThe Problem-Definition ProcessStep 2: Identify the relevant Step 2: Identify the relevant issues from the symptoms issues from the symptoms

The symptoms identified should be translated into a problem and then a decision statement.

Exhibit 6.4 illustrates how symptoms can be translated into a problem and then a decision statement.

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EXHIBIT 6.EXHIBIT 6.44 Symptoms Can Be ConfusingSymptoms Can Be Confusing

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The Problem-Definition ProcessThe Problem-Definition ProcessStep 3: Writing Managerial Decision Step 3: Writing Managerial Decision

Statements into Corresponding Statements into Corresponding Research ObjectivesResearch Objectives

Decision statements must be translated into research objectives. Once the decision statement is written,

the research essentially answers the question, “What information is needed to address this situation?”

Research objectives are the deliverables of the research project.

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EXHIBIT 6.EXHIBIT 6.55 Translating Decision StatementsTranslating Decision Statements

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The Problem-Definition ProcessThe Problem-Definition ProcessStep 4: Determine the Unit of AnalysisStep 4: Determine the Unit of Analysis

Unit of Analysis Unit of analysis indicates what or who should

provide the data and at what level of aggregation. Individuals (such as customers, employees, and owners)

Households (families, extended families, and so forth)

Organizations (businesses and business units)

Departments (sales, finance, and so forth)

Geographical areas

Objects (products, advertisements, and so forth).

Multi-level analysis studies variables measured at more than one unit of analysis.

The Problem-Definition ProcessThe Problem-Definition ProcessStep 5: Determine the Relevant Step 5: Determine the Relevant

VariableVariable What is a Variable?

A variable is anything that varies or changes from one instance to another.

It can exhibit differences in value, usually in magnitude or strength, or in direction.

Converse of a variable is a constant (i.e., something that does not change).

What is a Constant? Something that does not change; is not useful

in addressing research questions.

Types of VariablesTypes of Variables Continuous variable

Can take on a range of quantitative values.

E.g. Sales, profit, satisfaction

Categorical variable Indicates membership

in some group. Also called

classificatory variable. E.g. gender, customer

versus non-customers

Dependent variable, Y A process outcome or

a variable that is predicted and/or explained by other variables.

Independent variable, X A variable that is

expected to influence the dependent variable in some way.

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EXHIBIT 6.EXHIBIT 6.66 Example Business Decision Situations, Corresponding Research Hypotheses, and Variable Example Business Decision Situations, Corresponding Research Hypotheses, and Variable DescriptionsDescriptions

ExampleExample The motivation to become an franchise entr

epreneur

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ExampleExampleHypothesis: There is a positive relationship

between treatment of employees and employee loyalty

Dependent variable Employee Loyalty

Independent variable Treatment of employee

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The Problem-Definition ProcessThe Problem-Definition ProcessStep 6: Writing Research Step 6: Writing Research Objectives and QuestionsObjectives and Questions

Research Questions Express the research objectives in terms

of questions that can be addressed by research.

Help to develop well-formulated, specific hypotheses that can be empirically tested.

Help the researcher design a study that will produce useful results.

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Clarity in Research Clarity in Research Questions and HypothesesQuestions and Hypotheses

A research question is the researcher’s translation of the problem into a specific inquiry.

Asking specific research questions helps the researcher design a study that will produce useful results.

A formal hypothesis has considerable practical value in planning and designing research because it forces researchers to be clear about what they expect to find through the study, and it raises crucial questions about data required.

In cases of a “go/no go” decision, the research involves a managerial action standard that specifies a specific performance criterion upon which a decision can be based.

Objectives should be limited to a manageable number.

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EXHIBIT 6.EXHIBIT 6.77 Influence of Decision Statement of Marketing Problem on Research Influence of Decision Statement of Marketing Problem on Research Objectives and Research DesignsObjectives and Research Designs

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How Much Time Should Be How Much Time Should Be Spent on Problem Definition?Spent on Problem Definition? Budget constraints usually influence how much

effort is spent on problem definition.

The more important the decision faced by management, the more resources should be allocated toward problem definition.

The time taken to identify the correct problem is usually time well spent.

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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.

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Appendix : A Franchise Checklist - 4PAppendix : A Franchise Checklist - 4P

1.1. PProductroduct

2.2. PProfitabilityrofitability

3.3. PProcessrocess

4.4. PPeopleeople

1. Product/Service :1. Product/Service :

1.1. Positive reputationPositive reputation

2.2. Customer needCustomer need

3.3. Growing marketGrowing market

4.4. SafeSafe

5.5. Patented/guaranteedPatented/guaranteed

6.6. Self-interestSelf-interest

7.7. Identified with known personalityIdentified with known personality

8.8. Future needFuture need

9.9. Strongly desirableStrongly desirable

2. Process/ Business Format :2. Process/ Business Format :

MarketingMarketing PromotionPromotion Brand Brand

recognitionrecognition ManagementManagement TrainingTraining AccountingAccounting

Site selectionSite selection Headquarters Headquarters

controlcontrol Service/repairsService/repairs Financial supportFinancial support Number of Number of

franchiseesfranchisees AdvertisingAdvertising

3. Profitability3. Profitability

ProfitsProfits RevenuesRevenues Cost of goods soldCost of goods sold Labour costsLabour costs ExpensesExpenses Return on investmentReturn on investment Earnings claimEarnings claim Forecasted revenuesForecasted revenues Start-up costsStart-up costs

Franchising feeFranchising fee Royalty fee (%)Royalty fee (%) Advertising feeAdvertising fee Other feesOther fees Termination costsTermination costs Selling of franchise Selling of franchise

rightsrights Renewal rights & Renewal rights &

costscosts

4. People4. People

Franchisor ChairmanFranchisor Chairman Franchisor PresidentFranchisor President Franchisor Franchisor

operations executiveoperations executive Franchisor sales Franchisor sales

executiveexecutive Other principals or Other principals or

directorsdirectors Service departmentsService departments

Advertising & Advertising & promotionspromotions

Finance & Finance & accountingaccounting

Sales & marketingSales & marketing Site selectionSite selection Personnel & trainingPersonnel & training Manufacturing & Manufacturing &

operationsoperations Field supportField support