BUSINESS RESEARCH METHODS

By: Yonas H. (Assistant Professor)

CHAPTER 1:
INTRODUCTION TO
BUSINESS RESEARCH
METHODS
1–1
LEARNING
LEARNING OUTCOMES
OUTCOMES
After studying this chapter, you should be able to:
1. Understand the meaning, objectives and significance
of business research
2. Characteristics of good research
3. Know when business research should and should not
be conducted
4. Appreciate the way technology and internationalization
are changing business research
5. Types of research and the research process
7. Preparation of Research Proposal
8. Case studies relating to the chapter (Articles)

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Business Research Defined
• Research is composed of two words: ‘re’ and
‘search’, which means to search again, or to
search for new facts or to modify older ones in
any branch of knowledge.

• Business research is systematic and rational

investigation to obtain valuable information that
influences the decision of a manger.
• Business research is the application of the
scientific method in searching for the truth about
business phenomena
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 Business Research Defined Cont’d…
• Business research is systematic and rational
investigation to obtain valuable information that
influences the decision of a manger
• ‘Systematic’ suggests research is based on
logical relationships and not just beliefs. • This
requires an explanation of the methods used to
collect the data, • Requires argument as to why
the results obtained are meaningful, and •
explains any limitations that are associated with
them.

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Business Research Defined Cont’d…
• Specifically, business research is a systematic
inquiry that provides information to guide
business decisions.

• Example: Marketing research

• Research starts with a problem, collects data or

facts, analyzes them critically, and reaches
decisions based on the actual evidence.

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 Concepts of research in modern
•settings
Avenue of quest, inquisition or investigation;
• Specific or well defined domain;
• A well laid hypothesis;
• Research is directed towards the solution of a
problem
• It emphasizes the development of
generalization, principles or theories that will be
helpful in predicting future occurrences
• Capable of being based upon observable data;
• Scientific techniques of collecting and analysis
of data; and
• Logical interpretation of results. 1–6
Reasons why we study research
(Objectives of a research)?
• Research methods enable us to solve problems
and meet challenges of a fast-paced decision
making environment,
• To explore new knowledge, describe, diagnose
a phenomena
• To capture valuable information
• To improve current techniques and increase the
overall benefit of the organization
• To evaluate research works (as an expert)

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Characteristics of A Good Research
1. Purpose Clearly Defined: – the problem
involved or the decision to be made – should
be clearly defined and sharply delineated in
terms as unambiguous as possible.
2. Research Process Detailed: Research
reports should reveal the sources of data and
the means by which they were obtained.
3. Research Design Thoroughly Planned:
-When a sampling of the population is
involved, the report should include evidence
concerning the degree of representativeness
of the sample. 1–8
Characteristics of A Good Research
cont’d…
-Experiments should have satisfactory controls.
4. High Ethical Standards Applied: A research
design that includes safeguards against causing
mental or physical harm to participants, invasion
or privacy, loss of dignity and makes data
integrity a first priority, should be highly valued
and avoid plagiarism.
5.Limitations Frankly Revealed: The researcher
should report, with complete frankness, flaws in
procedural design and estimate their effect on
the findings.
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Characteristics of A Good Research
Cont’d…
6. Adequate Analysis For Decision Maker’s
Needs:
- Analysis of the data should be sufficiently
adequate to reveal its significance and the
methods of analysis used should be appropriate.
- The validity and reliability of data should be
checked carefully,
7. Findings Presented Unambiguously:
- Presentation of data should be comprehensive,
easily understood by the decision maker, and
organized so that the decision maker can readily
locate critical findings 1–10
Characteristics of A Good Research
Cont’d…
8. Conclusions Justified:
- Conclusions should be confined to those
justified by the data of the research and limited
to those for which the data provide an adequate
basis.
- Drawing conclusions from a study of a limited
population and applying them universally is
undesirable

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What research is not?
• Research should never be treated as a piece of
compilation work.
• Reading a number of books and compiling their
material is yet another book; not research.

In this sense, it should be known that collecting

already existing information or data is not
research, since it adds nothing new to what has
already been known.

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Business Research in the 21st Century
• Communication Technologies
 Always “connected”—time, place, and distance are
irrelevant.
 Decreases in information acquisition, storage, access,
and transmission costs.
• Global Business Research
 Business research is increasingly global.
 Must understand the nature of particular markets.
 Cross-validation
 Verify that the empirical findings from one culture also exist
and behave similarly in another culture.

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Managerial Value of Business
Research
• it reduces uncertainty by providing information
• information facilitates decision making
• determining the nature of situations
• identifying the existence of problems or opportunities
present in the organization
• If there is a problem they need to specify what happened
and why?
• If an opportunity exists they may need to explore, clarify,
and refine the nature of the opportunity.
• Obtain specific information to help evaluate the various
alternatives,
• Selecting the best course of action based on certain
performance criteria
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Managerial Value of Business
Research Cont’d..
• There are only a few business orientations :
 Product-oriented
 Production-oriented
 Marketing-oriented

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EXHIBIT 1.2 Business Orientations and focus of research domain

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Application of Business Research
• For Business Companies

• Not-for-profit organizations and governmental

agencies can use research in much the same
ways as managers in for-profit organizations.

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When is Business Research Needed?
• The determination of the need for research
centers on:
1. Time constraints
2. The availability of data
3. The nature of the decision to be made
4. Benefits versus costs (the value of the research
information in relation to costs)
 Will the payoff or rate of return be worth the investment?
 Will the information improve the quality of the
managerial decision enough to warrant the
expenditure?
 Is the expenditure the best use of the available funds?

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EXHIBIT 1.3 Determining When to Conduct Business Research

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Types of Research
Research can be classified on the basis of the
following:
I. On the basis of the outcome of the research

II.On the basis of the purpose (The reason why a research

is conducted)

III.On the basis of the environment in which the research is

carried out

IV.On the basis of the process (Data used) of research

V.On the basis of the time required to complete the research
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 Types of Research:
I. On the basis of the outcome of the
research
A. Basic business research (also called pure
research or fundamental research)
 conducted without a specific decision in mind that
usually does not address the needs of a specific
organization.
 It is usually conducted to develop theories, principles, and
laws that are found in different subjects (areas) and helps to
extend the limitation of knowledge.
 Example:
 Do consumers experience cognitive dissonance in low-
involvement situations?
 Does employee tenure with a company influence
productivity?

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 Types of Research:
I. On the basis of the outcome of the research
Cont’d…
B. Applied business research
 conducted to address a specific business decision for a
specific firm or organization.
 Applied research may be directed at the testing of theoretical
constructs
 Example:
 Should CPU College go for postgraduate program in
Engineering?
 Which health insurance plan should a business provide for its
employees?
 Both basic and applied research use the scientific
method

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Types of Research:
I. On the basis of the outcome of the
research cont’d…
• Scientific Method

 The way researchers go about using knowledge and

evidence to reach objective conclusions about the
real world.

 The analysis and interpretation of empirical evidence

(facts from observation or experimentation) to confirm
or disprove prior conceptions

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EXHIBIT 1.1 A Summary of the Scientific Method

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Hypothesis
• A statement that can be refuted by empirical
data
• An unproven proposition
• A possible solution to a problem
• Guess
 Types of Research:
II. On the basis of the purpose (The reason why a
research is conducted)

A.Exploratory research (Pilot survey):

it is also called preliminary research.
aims at discovering, identifying and formulating
a research problem and hypothesis.
 appropriate when there are few or no studies
that can be referred.
Eg. Application of Online marketing in Ethiopia.

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 Types of Research:
II. On the basis of the purpose (The
reason why a research is conducted)
Cont’d..
B. Descriptive research:
 main purpose is description of the state of
nature or affairs, as it exists at present.
 the researcher has no control over the
variables; he/she can only report what has
happened or what is happening.
Eg. Assessment of Customer satisfaction in
Commercial Bank of Ethiopia
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 Types of Research:
II. On the basis of the purpose (The
reason why a research is conducted)
C. Analytical (explanatory) research:
 Not only describes, but also it analyzes and explains
why and how it happened or is happening.
The information used can be either qualitative or
quantitative.
You may begin to ask “why” things are the way they are.
 Uses facts or information already available for critical
evaluation.
Example: How can we expand the range of our services?

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 Types of Research:
II. On the basis of the purpose (The reason why a
research is conducted) Cont’d..
D. Predictive research:
 goes beyond explaining why and how things
happened.
 It predicts (forecasts) probability of happening
similar situation in other places.
 It tries to explain about probability of happening
similar things in the future.
Eg. What type of packaging will improve sales of
our products?

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Types of Research:
III. On the basis of the environment in
which the research is carried out
A) Field research:
• carried out in the field.
• Such research is common in social science,
agricultural science, history and archeology.
B) Laboratory research:
• carried out in the laboratory.
• These are commonly experimental researches
common in medical science, agriculture and in
general in natural sciences.
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Types of Research:
IV. On the basis of the process (Data
used) of research
A) Qualitative research:
• applicable for phenomenon that cannot be
expressed in terms of quantity.
• is designed to find out how people feel or what
they think about a particular subject or
institution.
• Likert scale type (quantifying qualitative issues?)
We can quantify when there is a need:
Eg. Strongly disagree (1) to Strongly agree (5)
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Types of Research:
III. On the basis of the process (Data
used) of research Cont’d…
b) Quantitative research:
• is concerned with quantitative phenomenon.
• It is based on the measurement of quantity or
amount.

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 Types of Research:
V. On the basis of the time required to
complete the research, research can
be: research:
A) Cross-sectional (One –time)
 it is a research limited to a single time period. Eg. Most
of your MBA thesis research is cross-sectional type!

B) Longitudinal research:
 Such research is also called on-going research.
 It is a research carried out over several time periods.
E g. Studying human behavior at different ages

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Business Research Process

• The process includes:

 Defining the problem
 searching for and collecting information
 analyzing data
 communicating the findings and their
implications

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Business Research Process
 Research Process
• Cyclical process - conclusions generate new
ideas
• Stages can overlap chronologically
• Stages are functionally interrelated
– Forward linkages
– Backward linkages
Problem Discovery Problem Selection of
and Definition discovery Sampling
technique
Sampling

Selection of
exploratory research
technique Probability Non-probability

Secondary
Experience Pilot Case Collection of
(historical) Data
survey study study data
data Gathering
(fieldwork)

Data
Editing and
Problem definition Processing
coding
(statement of and
Analysis data
research objectives)

Data
Selection of processing
Research Design basic research
method Conclusions
Interpretation
and Report
of
findings
Experiment Survey
Secondary
Laboratory Field Interview Questionnaire Observation
Data Study
Report
 Problem Discovery And Definition
• First step
• Problem, opportunity, or monitor operations
• Discovery before definition
• Problem means management problem
“The formulation of the problem is
often more essential than its
solution”

Albert Einstein
 Experience Case
Secondary Pilot Study
Survey
(historical) Study
Data

Exploratory
Research
 Research Design
• Master plan
• Framework for action
• Specifies methods and procedures
 Types of Research Methods
• Surveys
• Experiments
• Secondary data
• Observation
 Selecting a Sample

Sample: subset SAMPLE

of a larger population.

POPULATION
 Sampling
• Who is to be sampled?
• How large a sample?
• How will sample units be selected?
Data Gathering Stage
Data Processing and Analysis
 Conclusions And Report Writing
• Effective communication of the research
findings
Problem definition
 Defining Problem Results in Clear Cut
Research Objectives
Symptom Detection

Analysis of
the Situation
Exploratory
Research
(Optional)
Problem Definition

Statement of
Research Objectives
 The Process of
Problem Definition
Ascertain the Determine unit
decision maker’s of analysis
objectives

Understand Determine
background of relevant
the problem variables

Isolate/identify State research

the problem, not questions and
the symptoms objectives
 The Iceberg Principle
• The principle indicating that the dangerous
part of many business problems is neither
visible to nor understood by managers.
 Understand the Background of the
Problem
• Exercising judgment
• Situation analysis - The informal gathering of
background information to familiarize
researchers or managers with the decision
area.

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Isolate and Identify the Problems, Not
the Symptoms
• Symptoms can be confusing

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 Determine the Unit of Analysis
• Individuals, households, organizations, etc.
• In many studies, the family rather than the
individual is the appropriate unit of analysis.

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 Determine the Relevant Variable
• Variable
– is anything that may assume different numerical
values

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 Types of Variables
• Dependent versus Independent
State the research questions and
research objectives

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If you do not know where you are going,
any road will take you there.
Research Proposal