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The Role of Business Research

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif University

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif UniversityDecision Making

Intuition

Experience

Research

AuthorityFour Sources of Information

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif UniversityWhat managers do?Make several decisions

Solve problems

What would help you to make right decisions?

Will it be your experience on the job?

Or hunch?

Or you just hope for good luck?

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif UniversityBusiness Research DefinedA process of determining, acquiring, analyzing, synthesizing, and disseminating relevant business data, information, and insights to decision makers in ways that mobilize the organization to take appropriate business actions that, in turn, maximize business performance

Business Research may be defined as the systematic and objective process of gathering, recording and analyzing data for aid in making business decisions

(Zikmund, Business Research Methods, 2002, p. 6)It is a process of finding solutions to a problem after a thorough study and analysis to the situational factors

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif UniversityExamples of Business ProblemsSystematicness and Objectivity are its distinguishing features of Business Research, which is important tool for managers and decision-makers in corporate and non-corporate organizations

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif UniversityExamples of Business ProblemsSubjective information is one person's opinion. In a newspaper, the editorial section is the place for subjectivity. It can be based on fact, but it is one person's interpretation of that fact. In this way, subjective information is also analytical. Objective information reviews many points of view. It is intended to be unbiased. News reporters are supposed to be objective and report the facts of an event. Encyclopedias and other reference materials provide objective information.

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif UniversityExamples of Business ProblemsSubjective or Objective99% of U.S households have at least one TV set.

It is clear that even though many people are poor, television is more important than anything else..

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif UniversityWhen is Business Research Used?Typically, business research methods are used in situations of uncertainty, that is, when decision-makers face two or more courses of action and seek to select the best possible alternative under the circumstances.

Business Research is hence aimed at improving the quality of decision-making which, in turn, benefits the organization and helps ensure its continuity and efficiency

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif UniversityTypical Users of Business Research MethodsBusinesses and Corporations

Public-Sector Agencies

Consulting Firms

Research Institutes

Non-Governmental Organizations

Non-Profit Organizations

Independent Researchers and Consultants

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif UniversityCommon Business Research Methods & TechniquesSurveys

Interviews

Observation

Experiments

Archival and Historical Data

Qualitative Analysis

Quantitative Analysis

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif UniversityFields Where Business Research is Often Used (2)

General Business Conditions andCorporate ResearchShort- & Long-Range Forecasting.Business and Industry TrendsGlobal Environments Inflation and Pricing Plant and Warehouse Location Acquisitions

Management and OrganizationalBehavior Research

Total Quality ManagementMorale and Job SatisfactionLeadership StyleEmployee ProductivityOrganizational EffectivenessStructural IssuesAbsenteeism and turnoverOrganizational ClimateFinancial and Accounting Research

Forecasts of financial interest rate trends, Stock, bond and commodity value predictions capital formation alternativesmergers and acquisitions risk-return trade-offs portfolio analysis impact of taxes research on financial institutions expected rate of return capital asset pricing models credit risk cost analysis

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif UniversityFields Where Business Research is Often Used (1)

Sales and Marketing Research

Market PotentialsMarket ShareMarket segmentationMarket characteristicsSales AnalysisEstablishment of sales quotasDistribution channelsNew product conceptsTest marketsAdvertising researchBuyer behaviourCustomer satisfactionWebsite visitation rates

Information Systems Research

Knowledge and information needs assessmentComputer information system use and evaluationTechnical suppot satisfactionDatabase analysisData miningEnterprise resource planning systemsCustomer relationship management systems

Corporate Responsibility Research

Ecological ImpactLegal Constraints on advertising and promotionSex, age and racial discrimination / worker equitySocial values and ethics

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif UniversitySelected Examples of Real-Life Situations in Which Business Research Methods are UsedA firm wants to produce and market a new product but first wants to ascertain if there is a potential consumer demand for this product in markets x,y and z

A multinational firm wants to establish a production facility in another country after determining its technical and economic feasibility

A government agency wants to ascertain the satisfaction level of its employees, the causes for any possible discontent, and propose a scheme for enhancing this level

A financial institution wants to invest in commodities and commissions a study to determine the past trends and forecast future returns in a portfolio of commodities

The CEO of a firm wants to undertake a SWOT-Analysis as part of his plan to redefine his organizations priorities

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif UniversityBusiness ResearchResearch information is neither intuitive nor haphazardly gathered.

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.Research should be an aid to managerial decision rather than substitute.

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif UniversityBusiness ResearchMain motivation is to expand mans knowledge or understanding about a phenomenon, not to create or invent something or to solve a practical problem There are usually no commercial applications in mind Examples: How was the earth created? Why some roses are red and some are pink?How did the universe begin?

What are protons, neutrons, and electrons composed of?

Basic research

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif UniversityBusiness ResearchApplied ResearchMain motivation is to solve a practical problem, develop a new product or process, or improve an existing product or process, and not just to acquire knowledge for knowledges sake.

There are usually a commercial applications in mind

Examples:

How can we develop more energy efficient dyeing processes?

How can we avoid catalytic damage of cotton fabric during bleaching?

Treat or cure a specific disease

Improve the energy efficiency of homes, offices, or modes of transportation

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif UniversityScience and the Scientific MethodScience has been defined as the methodological and systematic approach to acquisition of new knowledge (Geoffrey Marcyzk, David DeMatteo, David Festinger, Essentials of Research Design and Methodology, John Wiley & Sons, 2005, p. 4)

The analysis and interpretation of empirical evidence (facts from observation or experimentation) to confirm or disprove prior conceptions.

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif UniversityScience and the Scientific MethodBasic ResearchApplied Research

Scientific MethodsInformation or Ideas for alternatives courses of actionGeneral Laws

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif UniversityThe Value of Business Research for Managers (1)Reduction of uncertainty and improvement in the quality of decision-making with several consequent advantages (e.g. strategic, operational) and benefits for organizations

Business Research Methods can be employed in each of the following four stages:

Identification of problems and/or opportunities useful for strategy planning, analysis of internal and external organizational environment.

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif UniversityThe Value of Business Research for Managers (2)Diagnosing and Assessment of problems and/or opportunities

Its purpose is to gain insight into the underlying reasons and causes for the situation. If there is a problem, it asks what happened and why? If there is an opportunity, it seeks to explore, clarify and refine the nature of the opportunity and, in the case of multiple opportunities, seeks to set prioritiesSelection and Implementation of Courses of Action

After alternative courses of action have been determined, selection of the best possible course. An important consideration is the quality of forecasting which is an essential tool of research

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif UniversityThe Value of Business Research for Managers (3)Evaluating the Course of Action

Business Research Methods are used after a course of action has been implemented in order to determine whether activities have been properly implemented and have accomplished what they intended to do

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif UniversityThe Value of Business Research for Managers (3)Evaluation Research It is the formal objective measurement and evaluation of the extent which an activity, project or programme has achieved its goal, and the factors which influence performance (e.g. audits). It is also the formal objective measurement and evaluation of the extent to which on-going activities, projects or programmes are meeting their goals (performance-monitoring research)

Performance-Monitoring ResearchResearch that regularly provides feedback for evaluation and control of business activity

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif UniversityThe Value of Business Research for Managers (3)Examples of performance-monitoring research:

Are railway passengers satisfied with the level of service the railway company is providing? If not, then research may need to be undertaken to ascertain the reasons for customer dissatisfaction and propose corrective measures.

What are the trends in retail and wholesale sector?

Can research suggest new ways to improve efficiency in purchase transactions?

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif UniversityWhen Should Business Research be Undertaken?

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif UniversityValue and Costs of Undertaking Business Research

VALUEDecreased Uncertainty

Higher Likelihood of Correct Decisions

Better Business performance

Higher Profits

Better Reputation

costResearch Costs

Delay in Making Business Decisions

Disclosure of Information to Rivals

Possibility of Error

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif UniversityCross-functional TeamsCross-functional teams are composed of individuals from various organizational departments such as engineering, production, finance, and marketing who share a common purpose.

Rahim Bux Soomro Assistant Professor Department of Business Administration, Shah Abdul Latif UniversityThe Internet Is Transforming SocietyTime is collapsing.

Distance is no longer an obstacle.

Crossing oceans is only a mouse click away.

People are connected 24 hours a day, seven days a week.

"Instantaneous" has a new meaning.

Seeking facts and figures about an issue

Surveys on Web sites

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