TYPES OF BUSINESS RESEARCH AND THE RESEARCH PROCESS

OBJECTIVE
After reading this lesson the learners will be able to Differentiate between research and
business research Understand the types of business research Know the process of research
Differentiate between research project vs. research program Identify the problems of
researchers in India
INTRODUCTION
Recently the business process outsourcing (BPO) has attracted the attention of concerned
governments, researchers, economists and planners. India has been judged as a best destination
for BPO. This has raised many issues: In what ways, BPO is beneficial to Indian economy? How
can we sustain the benefits of BPO? What are the critical success factors in it? What are the
characteristics of BPO companies. A scientific research study can provide answer to the above
questions. This lesson describes how managers make decisions about planning research
strategies and research process.
TYPES OF BUSINESS RESEARCH
Business research produces information to reduce uncertainty. It helps focus decision making. In
a number of situations business researchers will know exactly what their business problems are
and design studies to test specific hypotheses. For example, a soft drink company introducing a
new clear cola might want to know whether a gold or silver label would make the packaging
more effective. This problem is fully defined and an experiment may be designed to answer the
business question with little preliminary investigation. In other, more ambiguous circumstances
management may be totally unaware of a business problem. For example, a plant manager may
notice when employee turnover increases dramatically, but be totally ignorant of the reason for
the increase. Some exploratory research may be necessary to gain insights into the nature of such
a problem.
Because of the variety of research activity, it will be helpful to categorize the types of business
research. Business research can be classified on the basis of either technique or function.
Experiments, surveys, and observational studies are just a few common research techniques.
Classifying them on the basis of purpose or function allows us to understand how the nature of
the problem influences the choice of research method.
Exploratory studies
Exploratory studies are conducted to clarify ambiguous problems. Management may have
discovered general problems, but research is needed to gain better understanding of the
dimensions of the problems. Management needs information to help analyze a situation, but
conclusive evidence to determine a particular course of action is not the purpose of exploratory
research. Usually, exploratory research is conducted with the expectation that subsequent
research will be required to provide conclusive evidence. It is a serious mistake to rush into
detailed surveys before less expensive and more readily available sources of information have
been exhausted.
In an organization considering a program to help employees with child-care needs, for example,
exploratory research with a small number of employees who have children might determine that
many of them are from families in which both parents work and that these employees have
positive reactions to the possibility of an on-site child-care program. In such a case exploratory
research helps to crystallize a problem and identify information needs for future research.



TYPES OF BUSINESS RESEARCH
Exploratory Research (Ambiguous Problem Descriptive Research (Aware of Problem)
Causal Research (Clearly Defined Problem)
Possible situation
Absenteeism is increasing and we dont know why.
What kind of people favour trade protectionism?
Which of two training programs is more effective?
Would people be interested in our new-product idea?
Did last years product recall have an impact on our companys stock price?
Can I predict the value of energy stocks if I know the current dividends and growth rates of
dividends?
What task conditions influence the leadership process in our organization? Has the average
merger rate for savings and loans increased in the past decade?
Will buyers purchase more of our product in a new package?
Note: The degree of uncertainty about the research problem determines the research
methodology.
Exhibit 2.1 illustrates that exploratory research is conducted during the early stages of decision
making when the decision situation is ambiguous and management is very uncertain about the
nature of the problem. When management is aware of the problem but not completely
knowledgeable about the situation, descriptive research is usually conducted. Causal studies
require sharply defined problems, even though uncertainty about future outcomes exists.
STAGES IN THE RESEARCH PROCESS
As previously noted, business research can take many forms, but systematic inquiry is a common
thread. Systematic inquiry requires careful planning in an orderly investigation. Business
research, like other forms of scientific inquiry, is a sequence of highly interrelated activities. The
stages in the research process overlap continuously, and it is somewhat of an oversimplification
to state that every research project follows a neat and ordered sequence of activities.
Nevertheless, business research often follows a generalized pattern. The stages are shown in


PROBLEM FORMULATION AND THE RESEARCH PROPOSAL
OBJECTIVES
After going through this lesson, you should be able to : discuss the nature of decision makers
objectives and the role they play in defining the research problem; understand that proper problem
definition is essential for effective business research; explain the Iceberg principle;

understand that identifying key variables is important; discuss the influence of the statement of the
business problem on the specific research objectives; state research problems in clear and precise
research objectives; explain the purpose of the research proposal; and outline a research proposal.
INTRODUCTION
You know that a decision makers degree of uncertainty influences decisions about the type of research
that will be conducted. This lesson elaborates on the conditions under which decision making occurs and
the process managers use to clearly define business problems and opportunities.
Remember that managers may be completely certain about situations they face. For example, a retail
store may have been recording and analyzing optical scanner data for years and know exactly what
information its optical scanners need to record every day. Routine research techniques regularly
investigate routine problems that have already been defined.
At the other extreme, a manager or researcher may describe a decision-making situation as absolute
ambiguity. The nature of the problem to be solved is unclear. The objectives are vague and the
alternatives are difficult to define. This is by far the most difficult decision situation.
Most decision-making situations fall somewhere between these two extremes. Managers often grasp
the general nature of the objectives they wish to achieve, but some uncertainty remains about the
nature of the problem. They often need more information about important details.
Their information is incomplete. They need to clear up ambiguity or uncertainty before making a formal
statement of the business problem.
IMPORTANCE OF PROPER PROBLEM DEFINITION
The formal quantitative research process should not begin until the problem has been clearly defined.
Properly and completely defining a business problem is easier said than done. When a problem or
opportunity is discovered, managers may have only vague insights about a complex situation. For
example, morale may be declining at a West Coast television studio, and management does not know
the reason. If quantitative research is conducted before learning exactly what issues are important, false
conclusions may be drawn from the investigation. The right answer to the wrong question may be
absolutely worthless. A decision made on the basis of a solution to the wrong problem may actually be
harmful.
Consider what happened when Coca-Cola made the decision to change its Coke formula. The companys
managers decided to investigate the ultimate consumers reactions to the taste of reformulated Coke
and nothing more. (The company carried out a series of taste tests in shopping malls. No take-home
taste tests were conducted.) In retrospect we know about the consumer protests associated with
dropping the original formula of Coke, and we are aware that there was a larger problem. Cokes
business research was too narrow in scope and the problem was not adequately defined. Coca-Cola
tested one thing and one thing only. The business research failed to identify consumers emotional
attachment and loyalty to the brand as a problem for investigation. There is a lesson to be learned from
the Coca-Cola mistake: Do not ignore investigating the emotional aspects of human behavior.
Just because a problem has been discovered or an opportunity has been recognized does not mean that
the problem has been defined. A problem definition indicates a specific managerial decision area that
will be clarified by answering some research questions.
SOURCES OF PROBLEMS
You may be asking yourself, So where do I find one of those numerous significant problems that need
research? While there are several major sources of problems, the most meaningful ones are generally
those derived from theory. Many of us will casually comment that we have a theory about something,
meaning that we have a hunch or belief about something. As Kerlinger (1973) states, A theory is a set
of interrelated constructs (concepts), definitions, and propositions that represent a systematic view of
phenomena by specifying relations among variables, with the purpose of explaining and predicting
phenomena.
There are many relevant theories in management, such as theories of motivation and leadership, from
which problems can be drawn. The fact that a theory is a theory and not a body of facts means that it
contains generalizations and hypothesized principles that must be subjected to rigorous scientific
investigation. Problems derived from a theoretical problem area are not only preferable in terms of
contribution to true scientific progress in management, they also facilitate the formulation of
hypotheses based on a sound rationale; these hypotheses in turn facilitate ultimate interpretation of
study results. The results of a study based on a theoretical problem contribute to their related theory by
confirming or disconfirming some aspect of the theory and also by suggesting additional studies that
need to be done.
To be perfectly honest, however, the selection of a problem based on theory may be too complicated
for many beginning researchers. There are a great number of problems that need research that are not
theoretical in nature. An obvious source of such problems is the researchers personal experiences.
Many management students who are beginning researchers come from the ranks of the employed. It is
hard to imagine an employee who has never had a idea concerning a better way to do something (a way
to increase efficiency or improve morale) or been a participant in a program or consumer of a product
whose effectiveness was untested. Thus practical experience may be a source of researchable problems.
This is not to say that an idea based on these experiences will never lead to a theoretical problem, it is
just more likely that the problem will result in an applied research study that may be easier for the
beginning researcher to manage.
As mentioned previously, the literature is also a good source of problems. In addition to overviews and
summaries, which are more helpful in narrowing down a problem area, specific studies often indicate
next-step studies that need to be conducted. The suggested next step may involve a logical extension of
the described study or simply replication of the study in a different setting in order to establish the
generalizability of its findings. It is generally not a good idea, however, simply to replicate a study as it
was originally conducted; there is much to be learned from developing and executing your own study.
Replication of certain studies, however, is highly desirable, especially those whose results conflict with
previous research or do not support some aspect of an established theory.
CHARACTERISTICS OF RESEARCH PROBLEMS
A research problem by definition involves an issue in need of investigation. So, a basic characteristic of a
research problem is that it is researchable. A researchable problem is first one that can be investigated
through the collection and analysis of data. Some problems dealing with philosophical or ethical issues
are not researchable. Research can assess how people feel or what they think about some of these
issues, but research cannot resolve them. Whether or not there is reward and punishment in the
hereafter may be an important problem to many people, but it is not researchable; there is no way to
resolve it through the collection and analysis of data. Similarly, in management there are a number of
issues that make great topics for debates (such as Should drug testing be implemented for all
employees?) but are not researchable problems when stated in that way.
A second major characteristic of a good problem is that it has theoretical or practical significance. Of
course the most significant problems are those derived from theory; even if the problem is not
theoretical, however, its solution should contribute in some way to improvement of the management
process. If the typical reaction to your problem is, Who cares? it probably is not of sufficient
significance to warrant a study!
A third major characteristic of a good problem is that it is a good problem for you. The fact that you
have chosen a problem of interest to you, in an area in which you have expertise is not sufficient. It must
be a problem that you can adequately investigate given: (a) your current level of research skill, (b)
available resources, and (c) time and other restrictions. As a beginning researcher, you have access to
one or more faculty members in addition to your instructor who can help you to assess the feasibility of
your proposed study.
THE PROCESS OF PROBLEM FORMULATION
Defining a research problem involves several interrelated steps.
They are: 1. Ascertain the decision makers objective. 2. Understand the background of the problem. 3.
Isolate and identify the problem rather than its symptoms. 4. Determine the unit of analysis. 5.
Determine the relevant variables. 6. State the research questions (hypotheses) and research objectives.
Ascertain the decision makers objectives
As a staff person. the research investigator must attempt to satisfy the objectives of the line manager
who requested the project. Management theorists suggest the decision maker should express his or her
goals to the researcher in measurable terms. Relying on the expectation that a decision maker will
follow this recommendation is, unfortunately, somewhat optimistic:
Despite a popular misconception to the contrary, objectives are seldom clearly articulated and given to
the researcher. The decision maker seldom formulates his objectives accurately. He is likely to state his
objectives in the form of platitudes which have no operational significance. Consequently, objectives
usually have to be extracted by the researcher. In so doing, the researcher may well be performing his
most useful service to the decision maker.
Researchers who must conduct investigations when the line manager wants the information yesterday
do not usually get a great deal of assistance when management is asked, What are your objectives for
this study? Nevertheless, both parties should attempt to have a clear understanding of the purpose for
undertaking the research.
One effective technique for uncovering elusive research objectives consists of presenting the manager
with each possible solution to a problem and asking whether he or she would follow that course of
action. If the decision maker says no, further questioning to determine why the course of action is
inappropriate usually will help formulate objectives.
Often exploratory research can illuminate the nature of the opportunity or problem and help managers
clarify their objectives and decisions.
Iceberg principle: Why do so many business research problems begin without clear objectives or
adequate problem definitions? Managers are logical people, and it seems logical that definition of the
problem is the starting point for any enterprise. Frequently researchers and managers cannot discover
the actual problem because they lack sufficiently detailed information; the iceberg principle serves as a
useful analogy. A sailor on the open sea notices only a small part of an iceberg, Only 10 percent of it is
above the surface of the water, and 90 percent is submerged. The dangerous part of many business
problems, like the submerged portion of the iceberg, is neither visible to nor understood by managers. If
the submerged portions of the problem are committed from the problem definition (and subsequently
from the research design), the decisions based on the research may be less than optimal. The example
of the new Coke is a case in point. Omission of important information or a faulty assumption about the
situation can be extremely costly.
Understanding the background of the problem
Although no textbook outline exists for identifying the business problem, the iceberg principle illustrates
that understanding the background of a problem is vital. Often experienced managers know a great deal
about a situation, and can provide the researchers with considerable background information about
previous events and why those event happened. In situations in which the decision makers objectives
are clear, the problem may be diagnosed exclusively by exercising managerial judgment. In other
situations in which information about what has happened previously is inadequate or if managers have
trouble identifying the problem, a situation analysis is the logical first step in defining the problem. A
situation analysis involves a preliminary investigation or informal gathering of background information
to familiarize researchers or managers with the decision area. Gaining an awareness of organizational or
environmental conditions and an appreciation of the situation often requires exploratory research.