Research in Business. McGraw-Hill/Irwin Copyright 2008 by The McGraw-Hill Companies, Inc. All Rights Reserved.

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2 Research in Business McGraw-Hill/Irwin Business Research Methods, 10e Copyright 2008 by The McGraw-Hill Companies, Inc. All Rights Reserved.

3 Mental Challenge 1-3 A man and his son are involved in an automobile accident. The man is killed and the boy, seriously injured, is rushed to the hospital for surgery. But the surgeon takes one look at the boy and says, I am sorry, but I cannot operate on this boy. He is my son.

4 What is your decision? 1-4 A group of children were playing near two railway tracks, one still in use while the other disused. Only one child played on the disused track, the rest on the operational track. The train came, and you were just beside the track interchange. You could make the train change its course to the disused track and saved most of the kids. However, that would also mean the lone child playing by the disused track would be sacrificed. Or would you rather let the train go its way? Let's take a pause to think what kind of decision we could make...

5 1-5 The secret of success is to know something nobody else knows. Aristotle Onasis

6 Learning Objectives 1-6 Understand... What business research is and how it differs from business decision support systems and business intelligence systems. Trends affecting business research and the emerging hierarchy of business decision makers. The distinction between good business research and research that falls short of professional quality. The nature of the research process.

7 1-7 Business Research Defined A 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

8 1-8 Why Study Business Research? Business research provides information to guide business decisions

9 Research Should Reduce Risk 1-9 The primary purpose of research is to reduce the level of risk of a decision

10 What s Changing in Business that Influences Research 1-10 New Research Perspectives Information Overload Technological Connectivity Computing Power & Speed Battle for Analytical Talent Factors Government Intervention Shifting Global Economics Critical Scrutiny of Business

11 1-11 Interest in research methods Information Overload Quality and credibility of information Ubiquitous access to information Technological Connectivity Changes in work pattern Changes in relationships Geography is no longer a barrier Shifting global centers Rising Asia Demographic shifts Knowledge of suppliers, talent pools, business models, and infrastructures Research design that can accommodate different norms, values, technologies and languages

12 1-12 Interest in research methods Increasing scrutiny of big business IT makes easier for stakeholder participation Interconnection of suppliers, producers and customers More government intervention Protection of consumers, rules and regulations, laws Battle for analytical talents Mathematical model for complex decisions Need more knowledge workers Strong analytical skills

13 1-13 Interest in research methods Greater computing power and speed Lower cost for data collection (ICT) Better visualization tools Powerful computations More integration of data Real time access New perspectives on research methodologies Older tools replaced with newer ones More variety of decision making

14 Why research is important? 1-14 Collect more information before making a decision Conduct high quality research Understand research designs Evaluate and correct current management dilemma Make research a career

15 1-15 Information Sources Decision Support Systems Numerous elements of data organized for retrieval and use in business decision making Stored and retrieved via Intranets Extranets Business Intelligence Systems Ongoing information collection Focused on events, trends in micro and macro-environments

16 Sources of Business Intelligence 1-16

17 Hierarchy of Business Decision Makers 1-17 All research based Develop own method Visionaries Standardized Decision Makers Intuitive Decision Makers Access to the whole company Some research based Tested methods Limited access Experience based Decision supported by secondary data

18 Two Categories of Research 1-18 Applied Research Evaluate opportunities Improve a current situation Basic Research Solving theoretical problems No direct impact to actions, performance or policy decisions Applied Basic (Pure)

19 Four Types of Studies 1-19 Reporting Descriptive Explanatory Predictive

20 Reporting 1-20 You work for ClassicToys, a corporation that is considering the acquisition of a toy manufacturer. The senior vice president for development asks you to head a task force to investigate six companies that are potential candidates. You assemble a team composed of representatives from the relevant functional areas. Pertinent data are collected from public sources because of the sensitive nature of the project. You examine all of the following: company annual reports; articles in business journals; trade magazines, and newspapers; financial analysts assessments; and company advertisements. The team members then develop summary profiles of candidate firms based on the characteristics gleaned from the sources. The final report highlights the opportunities and problems that acquisition of the target firm would bring to all areas of the business.

21 Descriptive 1-21 You are the business manager for MedImage, a large group of physicians specializing in diagnostic imaging (MRI, nuclear, tomography, and ultrasound). A prominent health insurance organization has contacted you to promote a new cost-containment program. The doctors committee to which you will make a recommendation will have a narrow enrollment window for their decision. If they choose to join, they will agree to a reduced fee schedule in exchange for easier filing procedures, quicker reimbursement, and listing on a physicians referral network. If they decline, they will continue to deal with their patients and the insurance carrier in the current manner. You begin your investigation by mining data from patient files to learn how many are using this carrier, frequency of care visits, complexity of filings, and so on. You then consult insurance industry data to discover how many potential patients in your area use this care plan, or similar care plans with alternative insurance carriers, and the likelihood of a patient choosing or switching doctors to find one that subscribes to the proposed program. You attempt to confirm your data with information from professional and association journals. Based on this information, you develop a profile that details the number of patients, overhead, and potential revenue realized by choosing to join the plan.

22 Explanatory 1-22 MoreCoatings, a paint manufacturer is having trouble maintaining profits. The owner believes inventory management is a weak area of the company s operations. In this industry, many point colors, types of paint, and container sizes make it easy for a firm to accumulate large inventories and still be unable to fill customer orders. You look into the present warehousing and shipping operations and find excessive sales losses and delivery delays because of out-of-stock conditions. An informal poll of customers confirms your impression. You suspect the present inventory database and reporting system do not provide prompt, usable information needed for appropriate productions decisions. Based on this supposition, you familiarize yourself with the latest inventory management techniques. You ask the warehouse manager to take an inventory, and you review the incoming orders for the last year. In addition, the owner shows you the production runs of the last year and his method for assessing the need for a particular color or paint type. By modeling the last year of business using production, order, and inventory management techniques, you choose the method that provides the best theoretical profit. You run a pilot line using the new control methodology. After two months, the data show a much lower inventory and a higher order fulfillment rate. You recommend that the owner adopt the new inventory method.

23 York College 1-23 You work for the York College s Alumni association. It is eager to provide a strong stimuli to encourage increased donations and to induce older, nontraditional students to return to supplement enrollment. The president s office is considering a retirement community geared toward university alumni and asks your association to assess the attractiveness of the proposal from an alumni viewpoint. Your director asks you to divide the study into 4 phases.

24 Characteristics of Good Research 1-24 Clearly defined purpose Detailed research process Thoroughly planned design High ethical standards Limitations addressed Adequate analysis Unambiguous presentation Conclusions justified Credentials

25 Characteristics of Good Research Clearly Defined Purpose Must contain problem, decision to be made, scope, limitations and definition of key terms Ch 4 and 5 2. Detailed research process Each step must be detailed with the sources of data clearly explained Acquiring participants, sampling method and representativeness Or else the confidence related to the recommendations will be lower Ch 4, Appendix A

26 continued Thoroughly planned design Sampling and observations must be accurate and carefully designed Objective data instead of recollection Personal bias Ch 3,4,5, High Ethical standards Must make sure respondents do not experience physical or emotional pressure Ch 2, 20

27 1-27 continued 5. Limitations addressed There is no perfect research Ch 6, 14, 15, Adequate analysis Validity and reliability is checked Presentation in a way can be understood be the readers/users Ch 15-20

28 continued Unambiguous presentation Style of presentation, language and terms must be simple and concise Overgeneralization Ch Conclusions justified Conclusions must be based on evidence and not experience Ch 15-20

29 1-29 continued 9. Credentials Experience and credentials of the researcher plays a role Ch 20

30 1-30 Characteristics of Bad Research Fishing Trip Plagiarizing others work Falsifying data Presenting information which is not true Misleading respondents

31 When to do research? 1-31 Time Constraint Availability data Type of decision Cost vs benefit Is there enough time for research? Are Is the Is the Yes available Yes Yes value of Yes decision information the strategic Sufficient information or tactical? for making more than decision? the cost? Do the Business research No No No No Business research should not be undertaken

32 Limitations in doing research 1-32 Time constraint Availability of data Type of decision to be made Cost and Benefit Payback Improve quality Use of resources

33 What is Important in this Chapter? 1-33 Definition Why research is important? Benefits of research knowledge Characteristics of good and bad research When research is not feasible?