Business Research Process

Study Notes on Business Research Process by Waqas Tariq

Topic: Business Research Process And Its implementation:-

What is Business Research?

“Business Research is a systematic inquiry that provides information. More specifically, it is a process of planning, acquiring, analyzing, and disseminating relevant date, information, and insights to decision makers in ways that mobilize the organization to act in ways that maximize business performance”.

In general, business research refers to any type of researching done when starting or running any kind of business. For example, starting any type of business requires research into the target customer and the competition to create a business plan. Conducting business market research in existing businesses is helpful in keeping in touch with consumer demand. Small business research begins with researching an idea and a name and continues with research based on customer demand and other businesses offering similar products or services. All business research is done to learn information that could make the company more successful.

Business research methods vary depending on the size of the company and the type of information needed. For instance, customer research may involve finding out both a customer’s feelings about and experiences using a product or service. The methods used to gauge customer satisfaction may be questionnaires, interviews or seminars. Researching public data can provide businesses with statistics on financial and educational information in regards to customer demographics and product usage, such as the hours of television viewed per week by people in a certain geographic area. Business research used for advertising purposes is common because marketing dollars must be carefully spent to increase sales and brand recognition from ads.

Other than business market research and advertising research, researching is done to provide information for investors. Business people aren't likely to invest in a company or organization without adequate research and statistics to show them that their investment is likely to pay off. Large or small business research can also help a company analyse its strengths and weaknesses by learning what customers are looking for in terms of products or services the business is offering. Then a company can use the business research information to adjust itself to better serve customers, gain over the competition and have a better chance of staying in business.

Most industries have trade journals that include research reports and statistics that relate to a certain type of business. International information is especially important to businesses that have ties with other countries and need to understand more about the cultures and demographics of other nations. For example, International Business Research is a publication of the Canadian Center of Science and Education and includes business essays and academic editorials from businesspeople from different parts of the world such as Australia, India and Malaysia.

Business Research Process:-

Research steps are often begun out of sequence, some are carried out simultaneously, and some may be omitted. Despite these variations, a sequence is useful for developing a project and for keeping the project orderly as it unfolds. Exhibit 4-1 model the sequence of the research process. The research process begins when a management dilemma triggers the need for a decision. For MindWriter, this is the growing number of complaints about service. In other situations, a controversy arises, a major commitment of resources is called for, or conditions in the environment signal the need for a decision. Such events cause managers to: Reconsider their purposes or objectives. Define a problem for solution. Develop strategies for solutions they have identified. The origin, selection, statement, exploration, and refinement of the management question is the most critical part of the research process (illustrated in Exhibit 4-1). Regardless of the type of research, a thorough understanding of the original question is fundamental to success.

The research process goes through a six-stage process.

Stage 1: Clarifying the Research Question:-

The management-research question hierarchy process of sequential question formulation leads a manager or researcher from management dilemma to investigative questions. The process begins with the management dilemma—the problem or opportunity that requires a business decision. The management dilemma is usually a symptom of an actual problem, such as: Rising costs, the discovery of an expensive chemical compound that would increase the efficacy of a drug, increasing tenant move-outs from an apartment complex, declining sales, a larger number of product defects during the manufacture of an automobile and an increasing number of letters and phone complaints about post purchase service

The management dilemma can also be triggered by an early signal of an opportunity or growing evidence that a fad may be gaining staying power. Identifying management dilemmas is rarely difficult. Choosing one dilemma on which to focus may be difficult. Choosing incorrectly may result in a waste of time and resources. Experienced managers claim that practice makes perfect in this area. New managers may wish to develop several management-research question hierarchies, each starting with a different management dilemma. Subsequent stages of the hierarchy take the marketer and his or her research collaborator through various brainstorming and exploratory research exercises to define the following: Management question—the management dilemma restated in question format. Research question(s)—the hypothesis that best states the objective of the research; the question(s) that focuses the researcher’s attention.

Investigative questions—questions the researcher must answer to satisfactorily answer the research question; what the marketer feels he or she needs to know to arrive at a conclusion about the management dilemma. Management questions—the questions asked of the participants or the observations that must be recorded. The definition of the management question sets the research task.

Stage 2: Proposing Research.

Exhibit 4-3 summarizes the research proposal process. Once the research question is defined, the manager must propose research in order to allocate resources to the project. A guide might be that (a) project planning, (b) data gathering, and (c) analysis, interpretation, and reporting each share about equally in the budget. Without budgetary approval, many research efforts are rejected for lack of resources. Types of budgets in organizations where research is purchased and cost containment is crucial include: Rule-of-thumb budgeting—taking a fixed percentage of some criterion. Departmental or functional-area budgeting—allocates a portion of total expenditures in the unit to research activities. Task budgeting—selects specific research projects to support on an ad hoc basis. There is a great deal of interplay between budgeting and value assessment in any management decision to conduct research. In profit-making concerns, business managers are increasingly faced with proving that the research they initiate or purchase meets return-on-investment (ROI) objectives. Conceptually, the value of business research is not difficult to determine. Whether research is conducted by for-profit or not-for-profit organizations, the value of the research decision with research—however it is measured—must exceed the value of the decision without research.

Ex Post Facto Evaluation: If there is any measurement of the value of research, it is usually an after-the-fact event. While the post-research effort at cost-benefit comes too late to guide a current research decision, such analysis may sharpen the manager’s ability to make judgments about future research proposals.

Prior or Interim Evaluation: Some research projects are sufficiently unique that managerial experience provides little aid in evaluating the research proposal.

Option Analysis: Managers can conduct a formal analysis with each alternative research project judged in terms of estimated costs and associated benefits and with managerial judgment playing a major role. The critical task is to quantify the benefits from the research. Estimates of benefits are crude and largely reflect an orderly way to estimate outcomes under uncertain conditions.

Decision Theory: When there are alternatives from which to choose, a rational way to approach the decision is to try to assess the outcomes of each action. Consider two possible actions (alternatives) as A1 and A2. The manager chooses the action that affords the best outcome—the action choice that meets or exceeds whatever criteria are established for judging alternatives. Each criterion is a combination of a decision rule (criterion for judging the attractiveness of two or more alternatives when using a decision variable) and a decision variable (a quantifiable characteristic, attribute, or outcome on which a choice decision will be made). The alternative selected (A1 and A2) depends on the decision variable chosen and the decision rule used. The evaluation of alternatives requires that: Each alternative is explicitly stated. A decision variable is defined by an outcome that may be measured. A decision rule is determined by which outcomes may be compared.

The Research Proposal: A written proposal is often required when a study is being suggested. This is especially true if an outside research supplier will be contracted to conduct the research. A research proposal may be oral.

Stage 3: Designing the Research Project.

Research Design: The research design is the blueprint for fulfilling objectives and providing the insight to answer management’s dilemma. The field of business research offers a large variety of methods, techniques, procedures, and protocols. The numerous alternatives and combinations spawned by the abundance of tools may be used to construct alternative perspectives on the same problem.

Sampling Design: Another step in planning the research project is to identify the target population (those people, events, or records that have the desired information and can answer the measurement questions) and then determine whether a sample or a census is desired. Who and how many people will be interviewed? What events will be observed, and how? Which, and how many, records will be inspected? A census is a count of all elements in a population. A sample is a group of cases, participants, events, or records constituting a portion of the target population, carefully selected to represent that population. Probability sampling (every person within the target population get a nonzero chance of selection) and non probability sampling may be used to construct the sample.

Pilot testing: The last step in a research design is often a pilot test. To condense the project time frame, this step can be skipped. A pilot test is conducted to detect weaknesses in research methodology and the data collection instrument, as well as provide proxy data for selection of a probability sample. The pilot test should approximate the anticipated actual research situation (test) as closely as possible. A pilot test may have from 25 to 100 subjects and these subjects do not have to be statistically selected. Pilot testing has saved countless survey studies from disaster by using the suggestions of the participants to identify and change confusing, awkward, or offensive questions and techniques.

Stage 4: Data Collection and Preparation.

 The gathering of data includes a variety of data gathering alternatives. Questionnaires, standardized tests, and observational forms (called checklists) are among the devices used to record raw data. What are data? Data can be the facts presented to the researcher from the study’s environment. Data can be characterized by their abstractness, verifiability, elusiveness, and closeness to phenomenon. Data, as abstractions, are more metaphorical than real. Data are processed by our senses. Capturing data is elusive. Data reflect their truthfulness by closeness to the phenomena. Secondary data are data originally collected to address a problem other than the one which requires the manager’s attention at the moment. Primary data are data the researcher collects to address the specific problem at hand—the research question. Data are the information collected from participants, by observation, or from secondary sources. Data are edited to ensure consistency across respondents and to locate omissions. In the case of a survey, editing reduces errors in the recording, improves legibility, and clarifies unclear and inappropriate responses. Coding is used to reduce the responses to a more manageable system for processing and storage.

Stage 5: Data Analysis and Interpretation.

 Managers need information and insights, not raw data, to make appropriate business decisions. Researchers generate information and insights by analyzing data after its collection. Data analysis is the editing, reducing, summarizing, looking for patterns, and applying statistical techniques to data. Increasingly, managers are asking research specialists to make recommendations based on their interpretation of the data.

Stage 6: Reporting the Results.

 As the business research process draws to a close it is necessary to prepare a report and transmit the findings, insights, and recommendations to the manager for the intended purpose of decision making. The researcher adjusts the style and organization of the report according to the target audience, the occasion, and the purpose of the research. The report should be manager-friendly and avoid technical jargon. Reports should be developed from the manager’s or information user’s perspective. The researcher must accurately assess the manager’s needs throughout the research process and incorporate this understanding into the final product, the research report. To avoid having the research report shelved with no action taken, the researcher should strive for: Insightful adaptation of the information to the client’s needs and careful choice of words in crafting interpretations, conclusions, and recommendations.

When research is contracted to an outside supplier, managers and researchers increasingly collaborate to develop appropriate reporting of project results and information. At a minimum, a research report should contain: 1) An executive summary consisting of a synopsis of the problem, findings, and recommendations 2) An overview of the research: the problem’s background, a summary of exploratory findings drawn from secondary data sources, the actual research design and procedures, and conclusions. 3) A section on implementation strategies for the recommendations. 4) A technical appendix with all the materials necessary to replicate the project.

Research Process Issues can exist.

Studies can wander off target or be less effective than they should be for a multitude of reasons.

The Favored-Technique Syndrome:

Some researchers are method-bound; they recast the management question so that it is amenable to their favorite methodology. Persons knowledgeable about, and skilled in, some techniques, but not others, are often blinded by their special competencies. The manager sponsoring the research is responsible for spotting an inappropriate technique-driven research proposal. Since the advent of total quality management (TQM), many standardized customer satisfaction questionnaires have been developed. Managers must not let researchers steamroll them into use of an instrument, even if it was successful for another client.

Company Database Strip-Mining:

Managers may mistakenly believe that a pool of information or a database reduces (or eliminates) the need for further research. Managers frequently hear from superiors, “We should use the information we already have before collecting more.” Having a massive amount of information is not the same as having knowledge. Each field in a database was created for a specific reason, which may or may not be compatible with the management question facing the organization.

Un-researchable Questions:

Not all management questions are researchable, and not all research questions are answerable. To be researchable, a question must be one for which observable or other data collection can provide the answer. Many questions cannot be answered on the basis of information alone.

Questions of value and policy often factor into management decisions. Additional considerations, such as “fairness to workers” or “management’s right to manage” may be important to the decision. Questions of value can often be transformed into questions of fact. Even if a question can be answered by facts alone, it might not be researchable because currently accepted and tested procedures or techniques are inadequate.

Ill-Defined Management Problems:

Some problems are so complex, value-laden, and bound by constraints that they are intractable to traditional forms of analysis. Ill-defined research questions may have too many interrelate facets to be measured accurately. Methods may not presently exist to handle questions of this type. Even if such methods were invented, they might not produce the data necessary to solve such problems. Novice researchers should avoid ill-defined problems.

Politically Motivated Research:

A manager’s motivation for seeking research may not always be obvious. Hidden agendas may include: Presence of research may help win approval for pet idea and Authorizing research is a measure of personal protection for decision maker. In these situations, it may be harder to win the manager’s support for an appropriate research design.