CHAPTER ONE: INTRODUCTION TO RESEARCH

CHAPTER OBJECTIVES
After completing Chapter 1 you should be able to:

1. Describe what research is and how it is defined.

2. Distinguish between applied and basic research, giving examples, and discussing why they would fall
into one or the other of the two categories.

3. Explain why managers should know about research.

4. Discuss what managers should and should not do in order to interact most effectively with researchers.

5. Identify and fully discuss specific situations in which a manager would be better off using an internal
research team, and when an external research team would be more advisable, giving reasons for the
decisions

.6. Discuss what research means to you and describe how you, as manager, might apply the knowledge
gained about research.

7. Be aware of the role of ethics in business research.

WHAT IS RESEARCH?
Just close your eyes for a minute and utter the word research to yourself. What kinds of images does this
word conjure up for you? Do you visualize a lab with scientists at work with Bunsen burners and test tubes,
or an Einstein-like character writing dissertations on some complex subject, or someone collecting data
to study the impact of a newly introduced day-care system on the morale of employees? Most certainly,
all these images do represent different aspects of research. Research, a somewhat intimidating term for
some, IS SIMPLY THE PROCESS OF FINDING SOLUTIONS TO A PROBLEM AFTER A THOROUGH STUDY AND
ANALYSIS OF THE SITUATIONAL FACTORS. Managers in organizations constantly engage themselves in
studying and analyzing issues and hence are involved in some form of research activity as they make
decisions at the workplace. As is well known, sometimes managers make good decisions and the problem
gets solved, sometimes they make poor decisions and the problem persists, and on occasions they make
such colossal blunders that the organization gets stuck in the mire. The difference between making good
decisions and committing blunders lies in how managers go about the decision-making process. In other
words, good decision making fetches a ―yes‖ answer to the following questions: DO MANAGERS
IDENTIFY WHERE EXACTLY THE PROBLEM LIES, DO THEY CORRECTLY RECOGNIZE THE RELEVANT
FACTORS IN THE SITUATION NEEDING INVESTIGATION, DO THEY KNOW WHAT TYPES OF INFORMATION
ARE TO BE GATHERED AND HOW, DO THEY KNOW HOW TO MAKE USE OF THE INFORMATION SO
COLLECTED AND DRAW APPROPRIATE CONCLUSIONS TO MAKE THE RIGHT DECISIONS, AND FINALLY,

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DO THEY KNOW HOW TO IMPLEMENT THE RESULTS OF THIS PROCESS TO SOLVE THE PROBLEM? THIS IS
THE ESSENCE OF RESEARCH AND TO BE A SUCCESSFUL MANAGER IT IS IMPORTANT FOR YOU TO KNOW
HOW TO GO ABOUT MAKING THE RIGHT DECISIONS BY BEING KNOWLEDGEABLE ABOUT THE VARIOUS
STEPS INVOLVED IN FINDING SOLUTIONS TO PROBLEMATIC ISSUES.

Knowledge of research not only helps one to look at the available information in sophisticated and
creative ways in the fast-paced global environment that businesses face, but this knowledge also helps in
other ways. For example, you can interact more effectively with research consultants who work for you,
you can discriminate between good and bad studies published in professional journals, and if so desired,
you yourself can undertake research to solve problems. Moreover, knowledge in the business area is
exploding and there is an overwhelming maze of information available through the Internet, which has to
be sifted through to determine its reliability. Identifying the critical issues, gathering relevant information,
analyzing the data in ways that would help decision making, and implementing the right course of action,
are all facilitated by understanding business research. After all, decision making is merely a process of
choosing from among alternative solutions to resolve a problem and research helps to generate viable
alternatives for effective decision making. Business research can be described as a systematic and
organized effort to investigate a specific problem encountered in the work setting that needs a solution.

It comprises a series of steps designed and executed, with the goal of finding answers to the issues that
are of concern to the manager in the work environment. This means that the first step in research is to
know where the problem areas exist in the organization, and to identify as clearly and specifically as
possible the problems that need to be studied and resolved. Once the problem that needs attention is
clearly defined, then steps can be taken to gather information, analyze the data, and determine the factors
that are associated with the problem and solve it by taking the necessary corrective measures.
This entire process by which we attempt to solve problems is called research.

THUS, RESEARCH INVOLVES A SERIES OF WELL-THOUGHT-OUT AND CAREFULLY EXECUTED ACTIVITIES

THAT WILL ENABLE THE MANAGER TO KNOW HOW ORGANIZATIONAL PROBLEMS CAN BE SOLVED, OR
AT LEAST CONSIDERABLY MINIMIZED. RESEARCH THUS ENCOMPASSES THE PROCESSES OF INQUIRY,
INVESTIGATION, EXAMINATION, AND EXPERIMENTATION. THESE PROCESSES HAVE TO BE CARRIED OUT
SYSTEMATICALLY, DILIGENTLY, CRITICALLY, OBJECTIVELY, AND LOGICALLY. THE EXPECTED END RESULTS
WOULD BE THE DISCOVERY THAT WILL HELP THE MANAGER TO DEAL WITH THE PROBLEM SITUATION.

The difference between the manager who uses common sense alone to analyze and make a decision in a
given situation, and the investigator who uses a scientific method, is that the latter does a systematic
inquiry into the matter and proceeds to describe, explain, or predict phenomena based on data carefully
collected for the purpose.

Definition of Research
We can now define business research as an ORGANIZED, SYSTEMATIC, DATA-BASED, CRITICAL, OBJECTIVE,
SCIENTIFIC INQUIRY OR INVESTIGATION into a specific problem, undertaken with the purpose of finding
answers or solutions to it. In essence, research provides the needed information that guides managers to
make informed decisions to successfully deal with problems. The information provided could be the result

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of a careful analysis of data gathered firsthand or of data that are already available (in the company,
industry, archives, etc.). Data can be quantitative (as generally gathered through structured questions) or
qualitative (as generated from the broad answers to specific questions in interviews, or from responses
to open-ended questions in a questionnaire, or through observation, or from already available
information gathered from various sources).

Research and the Manager

A common experience of all organizations is that the managers thereof encounter
problems big and small on a daily basis, which they have to solve by making the
right decisions. In business, research is usually primarily conducted to resolve
problematic issues in, or interrelated among, the areas of accounting, finance,
management, and marketing. In Accounting, budget control systems, practices, and procedures
are frequently examined. Inventory costing methods, accelerated depreciation, time-series behavior of
quarterly earnings, transfer pricing, cash recovery rates, and taxation methods are some of the other areas
that are researched. In Finance, the operations of financial institutions, optimum financial ratios, mergers
and acquisitions, leveraged buyouts, interoperate financing, yields on mortgages, the behavior of the
stock exchange, and the like, become the focus of investigation. Management research could encompass
the study of employee attitudes and behaviors, human resources management, the impact of changing
demographics on management practices, production operations management, strategy formulation,
information systems, and the like. Marketing research could address issues pertaining to product image,
advertising, sales promotion, distribution, packaging, pricing, after-sales service, consumer preferences,
new product development, and other marketing aspects.

TYPES OF BUSINESS RESEARCH: APPLIED AND BASIC

Research can be undertaken for two different purposes. One is to solve a current problem faced by the
manager in the work setting, demanding a timely solution. For example, a particular product may not
be selling well and the manager might want to find the reasons for this in order to take corrective action.
Such research is called APPLIED RESEARCH. The other is to generate a body of knowledge by trying to
comprehend how certain problems that occur in organizations can be solved. This is called BASIC
RESEARCH. It is quite possible that some organizations may later on apply the knowledge gained by the
findings of such basic research to solve their own problems. For instance, a university professor may be
interested in investigating the factors that contribute to absenteeism as a matter of mere academic
interest. After gathering information on this topic from several institutions and analyzing the data, the
professor may identify factors such as inflexible work hours, inadequate training of employees, and low
morale as primarily influencing absenteeism. Later on, a manager who encounters absenteeism of
employees in his organization may use this information to determine if these factors are relevant to that
particular work setting.

Thus, research done with the intention of applying the results of the findings to solve specific problems
currently being experienced in the organization is called applied research. Research done chiefly to
enhance the understanding of certain problems that commonly occur in organizational settings, and

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seek methods of solving them, is called basic or fundamental research. It is also known as pure research.
The findings of such research contribute to the building of knowledge in the various functional areas of
business. Such knowledge generated is usually later applied in organizational settings for problem solving

The above is an instance of basic research, where knowledge was generated to understand a phenomenon
of interest to the researcher. Most research and development departments in various industries, as well
as many professors in colleges and universities, do basic or fundamental research, so that more
knowledge is generated in particular areas of interest to industries, organizations, and researchers.
Though the objective of engaging in basic research is primarily to equip oneself with additional
knowledge of certain phenomena and problems that occur in several organizations and industries with
a view to finding solutions, the knowledge generated from such research is often applied later for
solving organizational problems.

As stated, the primary purpose of conducting basic research is to generate more knowledge and
understanding of the phenomena of interest and to build theories based on the research results. Such
theories subsequently form the foundation of further studies of many aspects of the phenomena. This
process of building on existing knowledge is the genesis for theory building, particularly in the
management area.

Several examples of basic research can be provided. For instance, research into the causes and
consequences of global warming will offer many solutions to minimize the phenomenon, and lead to
further research concerning if and how global warming can be averted. Although research on global
warming might primarily be for the purpose of understanding the nuances of the phenomenon,
the findings will ultimately be applied and useful to, among others, the agricultural and building industries.

Many large companies also engage in basic research. For instance, General Electric Company generates
knowledge concerning the different applications of electrical energy, their motto being ―We bring good
things to life.‖ Computer companies in the Silicon Valley are constantly engaged in generating the
know-how to increase the usefulness of microcomputers in industry, which benefits managers and
technicians in all organizations. This, ultimately, results in increased sales of computers for them.
University professors engage in basic research in an effort to understand and generate more knowledge
about various aspects of businesses, such as how to improve the effectiveness of information systems,
integrate technology into the overall strategic objectives of an organization, assess the impact of logos,
increase the productivity of employees in service industries, monitor sexual harassment
incidents at the workplace, increase the effectiveness of small businesses, evaluate alternative inventory
valuation methods, change the institutional structure of the financial and capital markets, and the like.

These findings later become useful for application in business situations. As illustrated, the main
distinction between applied and basic business research is that the former is specifically aimed at solving
a currently experienced problem, whereas the latter has the broader objective of generating knowledge
and understanding of phenomena and problems that occur in various organizational settings. Despite this
distinction, both types of research follow the same steps of systematic inquiry to arrive at solutions to

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problems. As current or prospective practicing managers in organizations, you would be directly or
indirectly engaged in applied research. You would also be keeping abreast of new basic knowledge
generated by being in regular touch with the published research in the business journals related to your
sphere of work, some of which could very well be relevant and applicable to your own business
organization.

In sum, both applied and basic business research are scientific in nature, the main difference being that
the former is undertaken specifically to solve a current business problem whereas the latter is primarily
resorted to because of the importance of the subject to the researcher. A deeper understanding of the
phenomenon would be useful for its own sake as well as for application later, as needed. Both basic and
applied research have to be carried out in a scientific manner (discussed in the next chapter) so that the
findings or results generated by them can be relied upon to effectively solve the problem investigated. It
is, however, possible that some applied research could have a shorter time frame than some basic
research.

Managers with knowledge of research have an advantage over those without. Though you yourself may
not be doing any major research as a manager, you will have to understand, predict, and control events
that are dysfunctional to the organization. For example, a new product developed may not be ―taking
off, or a financial investment may not be ―paying off as anticipated. Such disturbing phenomena
have to be understood and explained. Unless this is done, it will not be possible to predict the future of
that product or the prospects of that investment, and how future catastrophic outcomes can be
controlled. A grasp of research methods will enable managers to understand, predict, and control their
environment.

A thought that may cross your mind is that, because you will probably be bringing in researchers to solve
problems instead of doing the research yourself, there is no need to bother to study about research. The
reasons become clear when one considers the consequences of failure to do so. With the ever-increasing
complexity of modern organizations, and the uncertainty of the environment they face, the management
of organizational systems has become one of constant trouble shooting in the workplace. It would help if
managers could sense,spot, and deal with problems before they get out of hand. Knowledge of research
and problem-solving processes helps managers to identify problem situations before they get out of
control. Although minor problems can be fixed by the manager, major problems would warrant the hiring
of outside researchers or consultants. The manager who is knowledgeable about research can interact
effectively with them. Knowledge about research processes, design, and interpretation of data also helps
managers to become discriminating recipients of the research findings presented, and to determine
whether or not the recommended solutions are appropriate for implementation.

Another reason why professional managers today need to know about research methods is that they will
become more discriminating while sifting through the information disseminated in business journals.
Some journal articles are more scientific and objective than others. Even among the scientific articles,
some are more appropriate for application or adaptation to particular organizations and situations than
others. This is a function of the sampling design, the types of organizations studied, and other factors
reported in the journal articles. Unless the manager is able to grasp fully what the published empirical

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research really conveys, she or he is likely to err in incorporating some of the suggestions such publications
offer. By the same token, managers can handle with success their own problems at considerable cost
savings by studying the results of ―good‖ (discussed in the next chapter) published research that has
addressed similar issues.

There are several other reasons why professional managers should be knowledgeable about research and
research methods in business. First, such knowledge sharpens the sensitivity of managers to the myriad
variables operating in a situation and reminds then frequently of the multi causality and multi finality of
phenomena, thus avoiding inappropriate, simplistic notions of one variable―causing‖ another. Second,
when managers understand the research reports about their organizations handed to them by
professionals, they will be equipped to take intelligent, educated, calculated risks with known probabilities
attached to the success or failure of their decisions. Research then becomes a useful decision-making tool
rather than a mass of incomprehensible statistical information.

Third, because managers become knowledgeable about scientific investigations, vested interests inside
or outside the organization will not prevail. For instance, an internal research group within the
organization will not be able to distort information or manipulate the findings to their advantage if
managers are aware of the biases that could creep into research and know how data are analyzed and
interpreted. As an example, an internal research team might state that a particular unit to which it is
partial (for whatever reason) has shown increased profits and hence should be allocated more resources
to buy sophisticated equipment to further enhance its effectiveness. However, the increased profit could
have been a one-time windfall phenomenon due to external environmental factors such as market
conditions, bearing no relation whatever to the unit‘s operating efficiency. Thus, awareness of the
different ways in which data could be camouflaged will help the manager to make the right decision.
Fourth, knowledge about research helps the manager to relate to and share pertinent information
with the researcher or consultant hired for problem solving.

IN SUM, BEING KNOWLEDGEABLE ABOUT RESEARCH AND RESEARCH METHODS HELPS PROFESSIONAL
MANAGERS TO:

1. Identify and effectively solve minor problems in the work setting.

2. Know how to discriminate good from bad research.
3. Appreciate and be constantly aware of the multiple influences and multiple
effects of factors impinging on a situation.
4. Take calculated risks in decision making, knowing full well the probabilities
associated with the different possible outcomes.
5. Prevent possible vested interests from exercising their influence in a situation.
6. Relate to hired researchers and consultants more effectively.
7. Combine experience with scientific knowledge while making decisions.

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