MKT 300 Research Methods for Business Mishari Alnahedh

LECTURE 1: Introduction to Scientific Research

Applied Business Research The Business Research Mishari Alnahedh Applied Business Research Research conducted to address a specific business decision for a specific firm or organization. Ex: should we increase R&D spending to increase innovative output and hence increase market share for our company? Ex: should McDonalds add Italian pasta dinners to its menu? Research told McDonald’s it should not. EX: should Procter & Gamble add a high-priced home teeth bleaching kit to its product line? Research showed Crest Whitestrips would sell well at a retail price of $44.

Basic Business Research The Business Research Mishari Alnahedh Basic Business Research Research conducted without a specific decision in mind that usually does not address the needs of a specific organization. It attempts to expand the limits of knowledge in general and is not aimed at solving a particular pragmatic problem. Ex: Is there a relationship between the business founder personality and the survival of the startup? Ex: is executive success correlated with high need for achievement? EX: are members of highly cohesive work groups more satisfied than members of less cohesive groups?

The Business Research Mishari Alnahedh “The secret of success is to know something nobody else knows. ” -Aristotle Onassis

The Business Research Mishari Alnahedh The Scientific Method

Determining When to Conduct Business Research The Business Research Mishari Alnahedh Determining When to Conduct Business Research Availability of Data Nature of the Decision Benefits vs. Costs Conducting Business Research Time Constraints Is sufficient time available before a managerial decision must be made? Is the infor- mation already on hand inadequate for making the decision? Is the decision of considerable strategic or tactical importance? Does the value of the research information exceed the cost of conducting research? Yes Yes Yes Yes No No No No Do Not Conduct Business Research

What Is a Theory ?

What is a Theory ? Mishari Alnahedh Theory “A formal, logical explanation of some events that include pre-directions of how things relate to one another.” “A coherent set of general propositions used as principles of explanation of the apparent relationships of certain observed phenomena.”

What is a Theory ? Mishari Alnahedh

What is a Theory ? Mishari Alnahedh “There is nothing so practical as a good theory.” - Kurt Lewin “Theories are nets cast to catch what we call “the world”: to rationalize, to explain, and to master it. We endeavour to make the mesh ever finer and finer.” - Karl R. Popper, The Logic of Scientific Discovery

Two Purposes of Theory Prediction Understanding What is a Theory ? Mishari Alnahedh Two Purposes of Theory Prediction Understanding

Scientific Method The Scientific Method Mishari Alnahedh Scientific Method The use of a set of prescribed procedures for establishing and connecting theoretical statements about events and for predicting events yet unknown.

Concept (or Construct) The Scientific Method Mishari Alnahedh Concept (or Construct) A generalized idea about a class of objects, attributes, occurrences, or processes that has been given a name. Building blocks that abstract reality Ex: “Leadership”, “productivity”, “morale”, “personality” Ex: “Gross national product”, “asset”, “inflation”, “innovation”

Scientific Business Researchers Operate at Two Levels: The Scientific Method Mishari Alnahedh Scientific Business Researchers Operate at Two Levels: 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 Concepts : concepts abstract reality Propositions: statements concerned with the relationships among concepts Empirical level: level of knowledge reflecting that which is verifiable by experience or observation variables hypotheses

Observation of objects The Scientific Method Mishari Alnahedh Theory building process of increasing abstraction Theories Propositions Increasingly more abstract Concepts Observation of objects and events (reality )

Concepts are abstraction of reality The Scientific Method Mishari Alnahedh Concepts are abstraction of reality CONCEPTS Abstract Level Empirical Level OBSERVATION OF OBJECTS AND EVENTS (REALITY)

Concepts are abstraction of reality The Scientific Method Mishari Alnahedh Concepts are abstraction of reality

A variable is anything that may assume different numerical values. The Scientific Method Mishari Alnahedh A proposition is a statement explaining the logical linkage among certain concepts by asserting a universal connection between concepts. A hypothesis is a proposition that is empirically testable. It is an empirical statement concerned with the relationship among variables. A variable is anything that may assume different numerical values. Operationalization: the process of identifying the actual measurement scales to assess the variables of interest.

A proposition A hypothesis The Scientific Method Mishari Alnahedh A proposition Treating our employees better will make them more loyal employees This is a logical link between managerial action and employee reaction But it is quite general and not really testable in its current form. A hypothesis H1: A website with a blue background will generate more sales than an otherwise identical website with a red background Can be supported or shown to be wrong through an empirical test. Now let’s convert our proposition into a testable hypothesis: H2: Increasing retirement benefits will reduce intention to leave the organization. Retirement benefits is a variable. Intention to leave the organization is another variable.

The Scientific Method Mishari Alnahedh

Deductive Reasoning Inductive Reasoning The Scientific Method Mishari Alnahedh Deductive Reasoning The logical process of deriving a conclusion from a known premise or something known to be true. - We know that all managers are human beings. - If we also know that John Smith is a manager, - then we can deduce that John Smith is a human being. Inductive Reasoning The logical process of establishing a general proposition on the basis of observation of particular facts. - All managers that have ever been seen are human beings; - Therefore, all managers are human beings

Inductive Research (specific to general) The Scientific Method Mishari Alnahedh Inductive Research (specific to general) Based on empirical evidence We can draw general conclusions from our empirical observations. This type of research is associated with qualitative type of research. Deductive Research (general to specific) Based on logic - Researcher builds or deducts hypotheses from existing literature which can be subject to empirical testing and thus can be accepted or rejected. - This type of research is associated with quantitative type of research. Involves the gathering of facts to confirm or disprove hypothesized relationship among variables that deducted from existing knowledge.

What Comes First: Theory or Data ? The Scientific Method Mishari Alnahedh What Comes First: Theory or Data ?

What Comes First: Theory or Data ? The Scientific Method Mishari Alnahedh What Comes First: Theory or Data ? It is usually assumed that theory should precede (lead) data, that is, observations. This impression is easily supported by the way the ‘research process’ is illustrated or research often takes place this way. A key step in this case is to construct theory with an adequate explanation then deal with data. When a researcher test a specific hypothesis, she/he can get unexpected finding. So if there does not exist the relevant theory, such finding can not be explained adequately.

The Scientific Method Mishari Alnahedh “If facts conflict with a theory, either the theory must be changed or the facts.” - Benedict Spinoza “Every genuine test of a theory is an attempt to falsify it, or to refine it.” - Karl R. Popper, The Logic of Scientific Discovery

The Scientific Method Mishari Alnahedh Research Never Stops