Research in Business

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RESEARCH IN BUSINESS

In the competitive global economy of the twenty-first century, managers are challenged to make tough business decisions, such as how to keep an annual growth rate of 20 percent, how to increase employee productivity, how to improve product quality, how to cut down costs, and how to reduce the employee turnover rate. To make such decisions correctly, managers need research, which is a systematic inquiry that provides scientific findings and conclusions to guide business decisions.

CRITERIA OF GOOD BUSINESS RESEARCH

Good business research is a scientific approach that meets the following criteria:

The problem of the research should be explicitly stated.
The need for the research should be well justified.
The purpose of the research should be clearly defined.
The research method should be selected according to the nature of the problem and designed scientifically to ensure a valid and reliable outcome.
The research procedures should be described in sufficient detail to permit other researchers to replicate the research.
The limitations of the research design and procedures should be reported.
The analysis and interpretation of data should generate findings that reveal the evidence of scientific measurements.
The research conclusions should be drawn based on the findings, and the recommendations should be based on the conclusions.

BUSINESS RESEARCH METHODS

Business research methods refer to the ways researchers gather the evidence needed to make the right decisions. Common business research methods include case studies, the Delphi method, experiments, surveys, and content analysis.

Case Studies

Case studies examine a single, salient business situation or organization by collecting key facts and analyzing them in light of business functions, theories, and best practices. The goal is to generate possible solutions to problems experienced in that particular situation or organization. The case study begins with an explicit problem statement. Based on the problem statement, researchers decide what data need to be collected for analysis. For example, a company case study usually needs to collect both quantitative (e.g., financial and sales figures) and qualitative (e.g., management memos and reports) data to perform the following analyses:

Industry analysis to understand its growth, market structure, and competition
Product/service analysis to evaluate the company's market share, product/service portfolio, marketing strategies, and competitive advantage
Financial analysis to assess the company's profitability, liquidity, leverage, performance, and growth potential
Management analysis to examine the top-management strategies, short- and long-term objectives, organizational structure, and decision styles

These functional analyses enable researchers to identify the company's s trengths, w eaknesses, o pportunities, and t hreats (SWOT). Based on the SWOT analysis, researchers can develop alternative solutions, recommendations, and implementation plans.

The Delphi Method

The Delphi method is a qualitative approach through which a panel of experts is queried repeatedly about possible developments of a particular product/service, technology, workforce, or business strategy in varied scenarios. After the first round of inquiries, the experts review the responses of their peer panelists, revise their own if needed, and then start the second round of inquiries. In most cases, through three to four rounds, the experts' assessments converge toward a set of conclusions that form the basis for solutions to the problem(s). This method is effective for predicting uncertain future business environments and developments, especially when quantitative forecasting based on past trends is not reliable.

Experiments

Experiments are designed to test the cause- and-effect relationships that researchers suspect exist in a business environment. There are two categories of experiments: laboratory and field. A laboratory experiment takes place in an artificial setting created by researchers—such as testing a new drug on mice or testing automobile safety in collisions using dummies. By contrast, a field experiment takes place in a natural setting, such as testing the effect of implementing a total-quality-management system on product quality and employee productivity in a company.

Whether in a lab or in the field, researchers exercise high control when they are able to manipulate independent variables, assign subjects randomly to control and experiment groups, and control extraneous variables. For example, a company wants to know whether newspaper coupons for its product affect sales. The company randomly selects ten communities from the fifty communities having daily newspapers within its sales region and then randomly assigns them to control and experiment groups, with each having five communities. On Tuesday, the control group receives a newspaper advertisement for the company's product without a coupon, while the experiment group gets the same advertisement with a coupon for a 15 percent discount. Sales figures from the two groups are totaled on the following Saturday (the coupon's expiration date). Through a statistical analysis of the sales figures, the experiment shows whether or not the coupon has significantly affected the sales.

Surveys

Survey research is a method of systematically questioning a sample of respondents representing a specific population regarding their beliefs, attitudes, and behaviors. This method is useful for collecting information about a population that is too large for every member to be studied. To ensure the generalizability of the findings, researchers design a survey by taking the following steps:

defining the population of the study
determining the sample size that is large enough to represent the population yet small enough to be economical
selecting a sampling method that ensures that each member in the population has an equal chance to be selected
determining whether a questionnaire or structured interview is more appropriate for gathering information
developing effective questions by using clear, simple language, nonleading or non-multifaceted questions, mutually exclusive choices, and group categories for sensitive information such as age, salary, and morals

For a questionnaire survey, researchers first decide whether mail, e-mail, or online is the appropriate medium for ensuring a high response rate. Second, researchers need to send a persuasive cover letter with the questionnaire to persuade readers to complete and return the questionnaire. If the first mailing (or e-mailing) generates a low response rate, a follow-up mailing is necessary to remind nonrespondents to complete and return the questionnaire.

For an interview survey, researchers first decide whether a telephone or face-to-face interview is more appropriate. Interviewers must be trained before conducting interviews. The interviewer begins by making the interviewee feel comfortable and important by giving a friendly greeting, explaining the purpose of the interview and the importance of the interviewee's participation, and asking if tape recording is permitted. During the interview, the interviewer should always use an interview guide of predeveloped questions and follow-ups for each interviewee. At the end, the interviewer should express appreciation to each interviewee for participating.

Content Analysis

Content analysis is a method for making inferences by systematically and objectively identifying characteristics of messages embedded in the texts and the causal relationships of message contests and outcomes. This method is widely used in the research of business and managerial communications, negotiations, and Web-based e-business. Content analysis employs a systematic procedure of selecting texts, developing content categories, and coding and analyzing data. Using computers to store and analyze data, researchers are able to conduct large-scaled content analysis with massive amounts of data without much difficulty.

BUSINESS RESEARCH PROCESS

To conduct business research effectively, researchers follow a general research process of five phases and must understand their interrelationships (see Figure 1).

Conceptualization engages researchers in identifying a problem or topic worth studying, reviewing relevant literature to justify the need for the research, defining the purpose of the research, and phrasing the problem in writing as research questions or hypotheses, which set the scope of the research.

Research design requires that researchers transform the research concepts into operational, or measurable, terms by completing these activities: First, select an appropriate research method as discussed in the previous section. Second, determine the population of the study, its sample size, and sampling method. Third, develop an instrument for measuring the existence, characteristics, size, quantity, and quality of the research variables with proper scales.

Research procedures in most studies consist of two common activities: reaching subjects and collecting data. For instance, an experiment reaches subjects by putting them in either control or experiment groups for collecting data, whereas a survey reaches subjects by mailing them questionnaires or telephoning them for collecting data. In addition, researchers need to indicate any limitations in the research design or procedures.

Data analysis requires researchers to sort out nonusable data such as incomplete questionnaires or dropouts in an experiment, code and edit data to meet the computer requirements, and analyze data quantitatively or qualitatively or in combination, thereby transforming data into information, or findings, for interpretation.

Research conclusion includes discussing the significance of the findings such as whether the hypotheses have been accepted or rejected or the research questions have been answered; addressing the theoretical, practical, or pedagogical implications; and recommending future research directions.

ETHICS IN BUSINESS RESEARCH

Business research demands ethical behavior. When research involves human subjects, researchers should first successfully complete an ethics workshop from the U.S. Department of Health and Human Services and then submit for approval a research proposal that ensures ethical compliance with their organization's institutional review boards. When research involves corporate internal documents, researchers should protect owners' rights to privacy and confidentiality.

see also Forecasting in Business ; Marketing Research