Business

Research Methods

William G. Zikmund

Chapter 1:
The Role of Business Research
 Why We Do Research
• Research is essential for understanding phenomena that
need to be handled by individuals and organizations.

• Decisions on important issues cannot be made unless we

investigate the relevant information more deeply.

• Research can thus be considered a problem-solving

process for a specific problem under specific conditions.
Research versus Common Sense
A man and his son are involved in an
automobile accident. The man is killed and the
boy, seriously injured, is rushed to the hospital
for surgery. The surgeon takes one look at him
and says, ‘I am sorry, but I cannot operate on
this boy. He is my son.’
(Selltiz et al., 1976: 4)
 Research versus Common Sense
• The usefulness of research is often discussed,
especially when it comes to things that seem self-
explanatory and common sense.

• Common sense is sound and prudent judgment

based on a simple perception of the situation or
facts.

• Our common sense is influenced by our

background, education, and beliefs.
 Business Research Defined

Business research is defined as the

systematic and objective process of
generating information to aid in
making business decisions.
 Business Research
• Research information is neither intuitive nor
haphazardly gathered.

• Literally, research (re-search) -“search

again”

• It facilitates the managerial decision process

for all aspects of a business.
Business Research Types

Basic research

Applied research
 Basic Research
• Attempts to expand the limits of knowledge.

• Not directly involved in the solution to a

pragmatic problem.

• Basic research can be used to test the

validity of a general business theory.
 Basic Research Example
• Is executive success correlated with high need for
achievement?
• What is the effect of liquidity, profitability, sales
growth and dividend policy on the stock price?
• What is the impact of sales management practices
on in-role performance and job satisfaction of
sales personnel in Pakistan?
• What is the impact of social media influencer-
follower relationship on customer’s behavioral
intention?
 Basic Research Basic Research Example
Right from her days as a clerical employee in a bank, Sarah had observed that her
colleagues, though extremely knowledgeable about the nuances and intricacies of banking,
were expending very little effort to improve the efficiency and effectiveness of the bank in
the area of customer relations and service. They took on the minimum amount of work,
availed themselves of long tea and lunch breaks, and seemed unmotivated in their dealings
with the customers and the management. That they were highly knowledgeable about
banking policies and practices was clearly evident from their discussions as they processed
applications from customers. Sarah herself was very hardworking and enjoyed her work
with the customers. She always used to think what a huge waste it was for talented
employees to goof off rather than to work hard and enjoy their work. When she left the
bank and did the dissertation for her PhD, her topic of investigation was Job Involvement,
or the ego investment of people in their jobs. The conclusion of her investigation was that
the single most important contributory factor to job involvement is the fit or match
between the nature of the job and the personality predispositions of the people engaged in
performing it. For example, challenging jobs allowed employees with high capabilities to
get job‐involved, and people‐oriented employees got job involved with service activities.
Sarah then understood why the highly intelligent bank employees could not get
job‐involved or find job satisfaction in the routine jobs that rarely called for the use of their
abilities. Subsequently, when Sarah joined the Internal Research Team of a Fortune 500
company, she applied this knowledge to solve problems of motivation, job satisfaction, job
involvement, and the like, in the organization.
 Applied Research
• Conducted when a decision must be made
about a specific real-life problem

• Applied research is frequently conducted by

an in-house or a consultant team.
 Applied Research Examples
• Should McDonalds add Italian pasta dinners
to its menu?
• 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
 Applied Research Example
Globally, colas account for more than 50% of all sodas sold. The
challenge for the $187 billion soft drink industry is giving consumers in
developed markets the sugary taste they want without giving them the
mouthful of calories they don’t. Concerns about obesity and health have
led to nine years of falling U.S. soda consumption. The soda giants can’t
rely on existing diet versions of their namesake colas, as consumers are
shying away from the artificial sweeteners they contain. Critics have
blamed the ingredients – rightly or not – for everything from weight gain
to cancer. Diet Coke is losing U.S. sales at 7% a year, almost double the
rate of decline of American cola sales overall. So Coke and Pepsi are
turning to research to save their cola businesses, which take in about
two‐thirds of the industry’s U.S. sales. “If you can crack the perfect
sweetener, that would be huge,” says Howard Telford, an analyst at
researcher Euromonitor International
 Basic vs Applied Research
(Examples)
Basic Research Applied Research

• How does technological • What is the effect on

turbulence affect business Samsung’s Galaxy
performance? smartphone market share of
adding foldable phones and
extended battery life?
• What psychological factors • How would imposing
predict reduced turnover in reduced working hours
service occupations? rather than downsizing
affect employee morale at
Ford Motor Company?
 Scientific Method
The analysis and interpretation of
empirical evidence (facts from
observation or experimentation)
to confirm or disprove prior
conceptions.
Managerial Value of Business
Research
 The Decision-making Process
Associated with the Development
and Implementation of a Strategy

• Identifying problems or opportunities

• Diagnosis and assessment
• Selecting and implementing a course of
action
• Evaluating the course of action
 Determining When to Conduct
Business Research
Availability of Data Benefits vs. Costs
Time Constraints Nature of the Decision
Is the infor- Does the value
Is sufficient time Is the decision Yes Conduct
Yes mation already Yes Yes of the research
available before of considerable
a managerial
on hand
strategic
information Business
inadequate exceed the cost
decision
for making
or tactical
of conducting Research
must be made? importance?
the decision? research?

No No No No

Do Not Conduct Business Research

 Major Topics for Research in
Business
• General Business Conditions and Corporate
Research
• Financial and Accounting Research
• Management and Organizational Behavior
Research
• Sales and Marketing Research
• Information Systems Research
• Corporate Responsibility Research