METHODS IN

BUSINESS
RESEARCH
SESSION 2
Data: facts or recorded measure of certain phenomena
(things or events)
Information: data formatted (structured) to support decision
making or define relationship between two facts.
Business intelligence: subset of data and information that
actually has some explanatory power enabling effective
decisions to be made.
E
X
A
M
P
L
E
THEORY: A formal, logical explanation of some events that
includes predictions of how things relate to one another.
GOALS OF THEORY:
1. Understanding:
e.g. Older people wants regular stream of income.
people with unfulfilled basic needs are tend to get
motivated through money.
2. Predicting
e.g. investment theories.
theory of motivation
RESEARCH CONCEPTS,
CONSTRUCTS, PROPOSITIONS,
VARIABLES, AND HYPOTHESES
Research Concepts and Constructs
• Concept (or construct) is a generalized idea about a class of
objects that has been given a name; an abstraction of reality
that is the basic unit for theory development. E.g. In
organizational theory, leadership, productivity, and morale
are concepts
Ladder of abstraction
• Organization of concepts in sequence from the most
concrete and individual to the most general.
Abstract level
• In theory development, the level of knowledge expressing a
concept that exists only as an idea or a quality apart from an
object.
Empirical level
• Level of knowledge that is verifiable by experience or
observation
RESEARCH PROPOSITIONS AND
HYPOTHESES
Propositions
Statements explaining the logical linkage among certain
concepts by asserting a universal connection between
concepts.
Hypothesis
Formal statement of an unproven proposition that is
empirically testable.
Empirical testing
• Examining a research hypothesis against reality using
data.
Variables
• Anything that may assume different numerical values; the
empirical assessment of a concept.
Operationalizing
• The process of identifying the actual measurement scales
to assess the variables of interest.
THEORY BUILDING
Deductive reasoning The logical process of deriving a
conclusion about a specific instance based on a known
general premise or something known to be true.
For example, while you might occasionally have doubts, we know that all
business teachers are human beings. If we also know that Ms. Rafia
Ayub is a business teacher, then we can deduce that Ms. Rafia Ayub is a
human being.
Inductive reasoning The logical process of establishing a
general proposition on the basis of observation of particular
facts.
For Example, All business professors that have ever been seen are
human beings; therefore, all business professors are human beings.
CHAPTER 4 (ZIKMUND, BABIN, CARR & GRIFFIN)

BUSINESS RESEARCH
PROCESS:
AN OVERVIEW
DECISION MAKING
TYPES OF BUSINESS
RESEARCH
• Exploratory
• Descriptive
• Causal Vs Correlational
• Exploratory
• Conducted to clarify ambiguous situations or discover
ideas that may be potential business opportunities
• undertaken when not much is known about the situation at
hand, or no information is available on how similar
problems or research issues have been solved in the past.
• Exploratory research is particularly useful in new product
development
• Descriptive
• Describes characteristics of objects, people, groups,
organizations, or environments; tries to “paint a picture” of a
given situation.
• It is undertaken in order to ascertain and be able to describe
the characteristics of the variables of interest in a situation.
• It tries to “paint a picture” of a given situation by addressing
who, what, when, where, and how questions.
• For example, one might want to know and be able to describe
the characteristics of the organizations that have a certain
debt-to-equity ratio.
• The goal of a descriptive study, hence, is to offer to the
researcher a profile or to describe relevant aspects of the
phenomena of interest from an individual, organizational,
industry-oriented, or other perspective
CAUSAL VS CORRELATIONAL
STUDY
• Causal Study
• Allows causal inferences to be made; seeks to identify
cause and-effect relationships.
• The study in which the researcher wants to delineate the
cause of one or more problems
• Correlational Study
• When the researcher is interested in delineating the
important variables associated with the problem
A causal study question:
Does smoking cause cancer?
A correlational study question:
Are smoking and cancer related? OR
Are smoking, drinking, and chewing tobacco associated with
cancer? If so, which of these contributes most to the variance in
the dependent variable?
Example 1: Fears of an earthquake predicted recently in the New
Madrid fault zone were instrumental (i.e., causal) in an
unprecedented number of house owners in the Midwest region
taking out an earthquake insurance policy.

Example 2: Increases in interest rates and property taxes, the

recession, and the predicted earthquake considerably slowed
down the business of real estate agents in the Midwest
STAGES IN RESEARCH
PROCESS
1. Defining the research objectives
2. Planning a research design
3. Planning a sample
4. Collecting the data
5. Analyzing the data
6. Formulating the conclusions and preparing the report
THE HYPOTHETICO-DEDUCTIVE
METHOD
1. Observation
2. Preliminary information gathering
3. Theory formulation
4. Hypothesizing
5. Further scientific data collection
6. Data analysis
7. Deduction
 EXAMPLE: THE CIO DILEMMA
Observation: The Chief Information Officer (CIO) of a firm observes that the newly installed Management
Information System (MIS) is not being used by middle managers as much as was originally expected. The managers
often approach the CIO or some other “computer expert” for help, or worse still, make decisions without facts.
“There is surely a problem here,” the CIO exclaims.
Information: Gathering through Informal Interviews Talking to some of the middle-level managers, the CIO finds that
many of them have very little idea as to what MIS is all about, what kinds of information it could provide, and how to
access it and utilize the information.
Obtaining More Information through Literature Survey: The CIO immediately uses the Internet to explore further
information on the lack of use of MIS in organizations. The search indicates that many middle-level managers—
especially the old-timers—are not familiar with operating personal computers and experience “computer anxiety.”
Lack of knowledge about what MIS offers is also found to be another main reason why some managers do not use
it.
Formulating a Theory: Based on all this information, the CIO develops a theory incorporating all the relevant
factors contributing to the lack of access to the MIS by managers in the organization.
Hypothesizing: From such a theory, the CIO generates various hypotheses for testing, one among them being:
Knowledge of the usefulness of MIS would help managers to put it to greater use.
Data Collection: The CIO then develops a short questionnaire on the various factors theorized to influence the use
of the MIS by managers, such as the extent of knowledge of what MIS is, what kinds of information MIS provides,
how to gain access to the information, and the level of comfort felt by managers in using computers in general, and
finally, how often managers have used the MIS in the preceding 3 months.
Data Analysis: The CIO then analyzes the data obtained through the questionnaire to see what factors prevent the
managers from using the system.
Deduction: Based on the results, the manager deduces or concludes that managers do not use MIS owing to
certain factors. These deductions help the CIO to take necessary action to rectify the situation, which might include,
among other things, organizing seminars for training managers on the use of computers, and MIS and its
usefulness.
SESSION 3
SHOULD RESEARCH BE DONE IN-
HOUSE OR BY AN OUTSIDE AGENCY?
• Outside Agency: An independent research firm contracted by
the company that actually will benefit from the research.
• In-house Research: Research performed by employees of the
company that will benefit from the research
• Small firms → fewer than 100 employees
• Mid-sized firms → between 100 and 500 employees
• Large firms → over 500 employees
SOURCES OF CONFLICT BETWEEN
SENIOR MANAGEMENT AND
RESEARCH
• Research that implies criticism
• Money
• Time
• Intuitive decision making
• Future decisions based on past experience
CHAPTER 6

PROBLEM DEFINITION:
THE FOUNDATION OF
BUSINESS RESEARCH
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.
Defining Problems Can Be Difficult
THE PROBLEM-DEFINITION
PROCESS STEPS
1. Understand the business situation—identify key
symptoms OR Situation Analysis
2. Identify key problem(s) from symptoms
3. Write managerial decision statement and corresponding
research objectives
4. Determine the unit of analysis
5. Determine the relevant variables
6. Write research questions and/or research hypotheses
Translating
Decision
Statements
Variable: Anything that varies or changes from one instance to
another; can exhibit differences in value, usually in magnitude or
strength, or in direction
TYPES OF VARIABLES
• Continuous variable A variable that can take on a range of
values that correspond to some quantitative amount. E.g.
Consumer attitude toward different airlines
• Categorical variable A variable that indicates membership in
some group. E.g. people can be categorized as either male or
female. M and F , or 0 and 1. Classificatory variable Another
term for a categorical variable because it classifies units into
categories.
ACTIVITY FROM
PREVIOUS SESSION
Managerial Research Research Variables
Decision Question(s) Hypotheses
Retail grocer - Is there - Delivery -
Types of employee
considering sufficient personnel can be
(delivery, cashier, etc.)
Web-based demand? paid less than
- Sales volume: amount
delivery service
- How much cashiers and
based on a test trial in
should delivery achieve the same
one geographic market
personnel be job satisfaction.
(i.e., Phoenix/
paid? - Web customers
Scottsdale).
- Will delivery express lower
- Hourly wages and
service (new intentions to visit
satisfaction with pay.
retail form) store than other
- Retail form: [whether they
cannibalize customers.
shopped (1) in store or
current (2) via the Web
business? (delivery)].
- Intentions to visit store
the percentage likelihood
that
Required: Identify categorical and continuous variables. a survey
Also respondent
highlight
would visit the store
dependent and independent variables
within the next 7 days.
SOLUTION
Dependent variable: A process outcome or a variable that is
predicted and/or explained by other variables.
Independent variable: A variable that is expected to influence
the dependent variable in some way

For example, average customer loyalty may be a dependent

variable that is influenced or predicted by an independent variable
such as perceptions of restaurant food quality, service quality, and
customer satisfaction.
EXAMPLES OF WELL-DEfiNED
RESEARCH QUESTIONS
1. To what extent do the structure of the organization and type of
information systems installed account for the variance in the
perceived effectiveness of managerial decision making?
2. To what extent has the new advertising campaign been successful
in creating the high-quality, customer-centered corporate image
that it was intended to produce?
3. How has the new packaging affected the sales of the product?
4. Has the new advertising message resulted in enhanced recall?
5. How do price and quality rate on consumers’ evaluation of
products?
6. Is the effect of participative budgeting on performance moderated
by control systems?
PRACTICE QUESTION:
Below is the gist of an article from Business Week. After
reading it, (a) identify the broad problem area, (b) define the
problem, and (c) explain how you would proceed further.

While Chrysler’s minivans, pickups, and sport utility vehicles

take a big share of the truck market, its cars trail behind those
of GM, Ford, Honda, and Toyota. Quality problems include,
among other things, water leaks and defective parts.
 THE PROBLEM STATEMENT IS….
a. The broad problem is that the Chrysler cars are
lagging behind in market share.
b. Problem statement: How can the market share
of Chrysler cars be improved?
c. It is best to interview the users of GM, Ford,
Honda, and Toyota car users and obtain from them their
reactions – both positive and negative - to the cars they
use and why they prefer them. Similar reactions from
the users of Chrysler cars should also be gathered.
One should proceed further based on the analysis of
these responses.
PRACTICE QUESTION:
What is the problem statement in the following situation?

Employee Loyalty
Companies benefit through employee loyalty. Crude downsizing in
organizations during the recession crushed the loyalty of millions.
The economic benefits of loyalty embrace lower recruitment and
training costs, higher productivity of workers, customer satisfaction,
and the boost to morale of fresh recruits. In order that these
benefits are not lost, some companies while downsizing try various
gimmicks. Flex leave, for instance, is one. This helps employees
receive 20% of their salary, plus employer provided benefits, while
they take a 6 to 12 month sabbatical, with a call option on their
services. Others try alternatives like more communication, hand
holding, and the like.