Chapter 1 Research in Business

Learning Objectives 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.

Why Study Business Research? Business research provides information to guide business decisions Business research plays an important role in an environment that emphasizes measurement. Return on investment (ROI) is the calculation of the financial return for all business expenditures and it is emphasized more now than ever before. Business research expenditures are increasingly scrutinized for their contribution to ROMI.

Research Should Help Respond to Change “Enterprises have long recognized the need to better sense and respond to business change. What’s different today is that ubiquitous access to information and real-time communications have fostered an ‘always on’ business culture where decision making has become a ‘just-in-time process.’” Business Performance Management Forum

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 Business research is a systematic inquiry that provides information to guide business decisions. The definition, as expanded by that used by the American Marketing Association, is provided in the slide. Ask students to offer examples of types of decision-making situations that could be addressed using business research.

Research Should Reduce Risk The primary purpose of research is to reduce the level of risk of a marketing decision Use this ad to talk about the different types of risk that organizations face. Students usually have no difficulty identifying financial/economic risk, but must stretch to identify other types of risks. Some of these include social risks (preserving their reputation), physical risk (represented by dangers to living things: product recalls in pet food and human food, pharmaceuticals, etc. provide examples.), environmental risk (preserving the organization’s relationship with their physical environment), technological risk (falling behind—or having the opportunity to leap ahead—of their competition).

Business Planning Drives Business Research Organizational Mission Business Goals Business Strategies Business Tactics An organization’s mission drives its business goals, strategies, and tactics and, consequently, its need for business decision support systems and business intelligence. Students need to understand the differences in these concepts to fully understand what drives a manager to seek solutions through research.

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 When elements of data are organized for retrieval, they collectively constitute a business decision support system (DSS). This data is often shared over an intranet or an extranet. An intranet is a private network that is contained within an enterprise and is not available to the public at large. It may consist of many interlinked local area networks. It typically includes connections through one or more computers to the Internet. The main purpose of an intranet is to share company information and computing resources among internal audiences. An extranet is a private network that uses the Internet protocols and the public telecommunication system to share an organization’s information, data, or operations with external suppliers, vendors, or customers. An extranet can be viewed as the external portion of a company’s intranet. A business intelligence system (BIS) is designed to provide ongoing information about events and trends in the technological, economic, political and legal, demographic, cultural, social, and competitive areas.

Sources of Business Intelligence Government/ Regulatory Competitive Economic Demographic Business Intelligence Exhibit 1-1 Exhibit 1-1 shows some sources of business intelligence. Sources of government information include speeches by elected officials, recordings of public proceedings, press releases, and agency websites. Sources of competitive information include presentations at conferences, literature searches, press releases, syndicated industry studies, web sites, clipping services, and business research. Sources of economic information include literature searches and government reports. Sources of cultural and social information include syndicated studies, public opinion organizations, business research, and government reports. Sources of technological information include patent filings, web sites, syndicated industry studies, presentations at conferences, literature searches, and clipping services. Sources of demographic information include syndicated studies, government reports, and business research. Remind your students that they have an extensive list of business sources on the CD that accompanied their textbook. It’s a valued resource that will be useful if you assign projects within your course structure. Technological Cultural/ Social

Information Value Chain Data collection/ transmission Data management Characteristics Decision support systems Data interpretation Computers and telecommunications lowered the costs of data collection. Data management is now possible and necessary given the quantity of raw data. Models reflect the behavior of individuals, households, and industries. A DSS integrates data management techniques, models, and analytical tools to support decision making. Data must be more than timely and standardized; it must be meaningful. These are all characteristics of the information value chain. Models

The Business Research Process Exhibit 1-4 Exhibit 1-4 introduces the research process model used throughout the text and the PowerPoint slides. Instructors are encourage to give it a brief overview here, as a more detailed look is offered in chapter 4, and individual stages are discussed in subsequent chapters.

Characteristics of Good Research Clearly defined purpose Detailed research process Thoroughly planned design High ethical standards Limitations addressed Adequate analysis Unambiguous presentation Conclusions justified Credentials Exhibit 1-5 presents the characteristics of good business research and also explains what managers should look for in research done by others. You might wish to discuss the concepts here, before you discuss who actually conducts research…or you might want to discuss who conducts research first, followed by this slide to summarize.

Two Categories of Research Applied Basic (Pure) Applied research applies research to discovering solutions for immediate problems or opportunities. Basic (or pure) research aims to solve perplexing questions or obtain new knowledge of an experimental or theoretical nature that has little direct or immediate impact on action, performance, or policy decisions.

Four Types of Studies Reporting Descriptive Explanatory Predictive Reporting studies provide a summation of data, often recasting data to achieve a deeper understanding or to generate statistics for comparison. A descriptive study tries to discover answers to the questions who, what, when, where, and, sometimes, how. An explanatory study attempts to explain the reasons for the phenomenon that the descriptive study only observed A predictive study attempts to predict when and in what situations an event will occur. Studies may also be described as applied research or basic research.

Key Terms Applied research Business intelligence system (BIS) Business research Control Decision support system Descriptive studies Explanatory Studies Management dilemma Predictive studies Pure research Reporting studies Return on Investment (ROI) Scientific method Strategy Tactics