1. 1 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. CREATIVE DECISION MAKING AND RESEARCH Chapter 3 1.Describe the role of research in business decision making. 2.Present a creative and analytical decision-making process. 3.Discuss the importance of writing actionable research questions. 4.Suggest techniques for being more creative. 5.Understand concepts related to evaluating alternatives and choice.

2. 2 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Research and Decision-Making Go Together  C-A-B PROCESS Creative-Analytical-Business Decision-Making Process Research Questions Creativity Evaluation & Choice Implementation Researc h Feedback

3. 3 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. How much research?  Routine decisions require little research.  Unfamiliar decisions with high risk require much research. Little Research Much Research Nature of Decision

4. 4 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Research has value two ways! Provides a more informed answer to the current question. Increases the knowledge of personnel so that more informed decisions can be made in general.

5. 5 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. DECISION MAKING PROCESS Business decision-making = selecting from among alternative courses of action – each likely to have a different outcome. 1. Opportunity = a situation where a potentially advantageous outcome is possible. 2. Crisis management = a decision- making situation that occurs with little notice and has great potential for negative implications.

6. 6 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. IDENTIFYING DECISION-MAKING SITUATIONS CrisisPure Opportunity Immediate Response Needed Unplanned Tactical Preprogrammed Solution Usually Used Response Can Be Timed (Long-Run Orientation) Plan can be developed Strategic Novel Solution Often Desired DSSMIS

7. 7 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. BUSINESS DECISION MAKING PROCESS  Decision maker identifies issues and/or problems.  Available information is screened.  Decision maker and researcher translate issues/problems into researchable questions.  Knowledge is acquired through research.  Decisions are made to reach a more desirable future situation.

8. 8 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. BARRIERS TO EFFECTIVE PROBLEM IDENTIFICATION AND ACTIONABLE RESEARCH QUESTIONS: Incorrect Assumptions Functional Fixedness Expedience Communication Difficulties “The” Solution Unclear Goals Developing better vision.

9. 9 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Functional Fixedness Once one learns an effective rule or action, increased familiarity with the process makes it difficult to see other ways of doing the same thing, even if they are simpler and better. That is, it creates tunnel vision.

10. 10 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. BEATING FUNCTIONAL FIXEDNESS Interrogatories. What ___? Why ___? When___? Where ___? Who ___? How ___? Invite Multiple Solutions. Identify WAYS not a WAY! ?

11. 11 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. EFFECTIVE COMMUNICATIONS... are essential because multiple people are usually involved in the decision making process. Effective communications make effective research questions more likely!

12. 12 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. INVITING MULTIPLE SOLUTIONS Too often we tend to work on the most obvious question, or the first one posed. Considering a larger number of potential questions and solutions leads to better research, better answers, and improved decision making.

13. 13 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. ISSUES OR SYMPTOMS? Issues are the things that if altered will close the gap between the actual and the desired situation. Symptoms are signals that some change is needed to avoid further problems or to take advantage of an opportunity. Effective communication insures that research and decision making are directed toward issues and not symptoms!

14. 14 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. ISSUES, SYMPTOMS, RESEARCH QUESTIONS SymptomPotential IssuesDecision IssuesResearch Questions Stock-outs are reduced from last year Shelf space reduction has lowered retail inventories? Should we increase slotting allowances in an effort to gain more shelf space? What is the relationship between shelf space and retail sales? Churn-rate is highest in the market Service provider unfriendly? Should we change service management procedures? Is service provider friendliness related to churn rate? Labor costs are higher than the competition’s Employee sick days are too high? Should we create flex- time? Do flexible schedules create increased labor efficiency (lower labor costs)?

15. 15 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. CREATIVITY... involves combining and synthesizing information into novel ideas.... is a divergent thinking exercise.... means developing many possible alternatives, not just one.

16. 16 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. BARRIERS TO CREATIVITY Functional Fixedness. Group Think. Emotional Inhibition. Expediency.

17. 17 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. BUSINESS PEOPLE LACK CREATIVITY Quantity creates quality. Defer judgment. Craziness should be encouraged. Get away from the situation. Run with your ideas. Thus, their decision making lacks creativity too. So, tips for adding creativity....

18. 18 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. HEURISTIC IDEATION TECHNIQUE... is a very effective way of combining lists and forced combinations to develop large numbers of ideas in a very short period of time.

19. 19 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Heuristic Ideation Matrix [HIT] What/How:FriedBoiledRawBakedColdMWToastedFrozenGrilledw/Fruit Bread12345678910 Cereal11121314151617181920 Pancakes21222324252627282930 Muffins31323334353637383940 Scones41424344454647484950 Bagels51525354555657585960 Eggs61626364656667686970 Bacon71727374757677787980 Ham81828384858687888990 Yogurt919293949596979899100 What do people eat for breakfast? How can food be cooked? Identify possible new breakfast foods.

20. 20 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. EVALUATION AND CHOICE The best decision makers avoid any evaluation until a large set of alternatives has been developed. The goal of evaluation and choice is to narrow down the alternative courses of action to those most likely to produce a good outcome. Preliminary screening is used to reduce large numbers of alternatives to a more manageable number.

21. 21 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. EVALUATIVE CRITERIA... characteristics used to judge the merits of alternatives. Good alternatives generally have high levels of some or all of the following: 1.Advantageousness. 2.Trialability. 3.Observability. 4.Consistency. 5.Simplicity.

22. 22 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. FIELD TESTS Test Market – an experiment evaluating a new product or promotion under real market conditions. Pilot Test – small scale implementation of an idea being considered.

23. 23 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. IMPLEMENTATION Critical to success. good idea + poor implementation = poor result. Often a problem unto itself. C-A-B used again.

24. 24 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. MONITORING Assessing the extent to which a decision is accomplishing its stated objective. MIS and DSS useful again. Requires feedback. Creates learning instead of failing.

25. 25 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. SUMMARY 1.Described the role of research in helping make effective business decisions. 2.Presented a C-A-B process. 3.Discussed importance of actionable research questions. 4.Identified approaches for better problem definition. 5.Suggested ways to enhance creativity. 6.Discussed concepts related to evaluation and choice of alternative decisions.