Business

Research Methods
William G. Zikmund

Chapter 1:
The Role of Business Research

How This Course Will Be Conducted

Comprehensive introduction to Research Methodology (Business Research
Methods)
Knowledge acquisition and application of subject matter to real-life situations
Course literature (see the must read section)
Use of multimedia visual aids (MS PowerPoint slides)

Reference to case studies when desirable

Encouragement of questions, comments and constructive criticism from course
participants
Analytical and critical thinking, inquisitiveness as well as common sense from
course participants also expected

The DOs and DONTs Catalogue for Course Participants

listen attentively
be considerate and amenable

be inquisitive, analytical and critical

in your approach to learning

research methodology
mention if you do not understand
something and seek clarification
read the prescribed course
literature. It is the basic
requirement for comprehending
research methodology and
succeeding in this course
start reading from the beginning
of the course and not towards the
end!
3

be late to class.
distract the attention of other
course participants
use mobile phones or send SMS
messages in the class
feel afraid to bring up any relevant
point for discussion
hesitate to visit me at my office,
individually or as a group, if you
have a course-related problem and
seek counseling in this regard

Fundamental Course Objectives

To acquaint course participants with all salient aspects of research methodology in accordance with
the current body of scientific literature on this challenging, interesting and indepensible area of
management science

To show that the subject of research methodology has matured into a substantive body of
knowledge, an indepth understanding of which is crucial for ensuring the success of commercial or
non-commercial organizations

To show and encourage the course participants that the theoretical knowledge acquired in this
course can - with the appropriate context-related modifications - be applied to numerous real-life
situations in business, public-sector and non-profit enterprises

To stimulate interest in the business research field as a prospective career field

Demands on Course Participants

The essence of knowledge is having it to apply it - Confucius
Acquisition and careful application of knowledge
Analytical and critical thinking, innovation, inquisitiveness
Holistic perspective

Quizzes &
Sessionals

(proof that the course participant is familar with the essentials

of research methodology)

Project Work

(each course participant is expected to show that he or she

is able to apply the research skills learned in this course)

Examination

(case study in which each course participant is expected to

demonstrate his or her indepth understanding of research
methodology and apply the knowledge acquired in the course to a
real-life situation)

Important Information for Course Participants (1)

You MUST read the course literature from the beginning of the semester.

Relying on the PowerPoint slides is NOT sufficient! The purpose of these slides is
to provide you with a broad and general introduction to research methodology.
Kindly note that the slides are intended as a supplement to, and NOT
as a substitute for the prescribed course literature
The prescribed course literature will be used as a reference for the quizzes,

sessionals and final examination. Failure to read and understand the course
literature could mean that a course participant will fail the course! An automatic
passing grade in this course is NOT guaranteed, rather, a course participants
marks will reflect his or her effort and performance in the subject

Important Information for Course Participants

(2)

The project work to be undertaken in this course will be chosen by the course

instructor and must be undertaken by the course participant according to

the project guidelines which will be distributed in paper form seperately. It is
essential that primary data is collected, analysed, evaluated and recorded
by the course participant in his or her project report. Plagiarism will NOT
be tolerated! If caught, zero marks will be given
The course lectures, discussions etc. will be conducted exclusively in

english! The use of Urdu language in this course is strongly discouraged

Specific questions on the subject of research methodology may be asked

from candidates in the Viva oral examination at the end of their MBA
programme. Failure to answer these questions will definitely result in a
deduction of examination marks
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Course Highlights
Introduction to research

Primary and Secondary Data

Analyzing primary and

secondary data (quantitative
techniques)

Communicating Research
Results

Undertaking Research Project by

the course participants

methodology

Research Terminology and the

Scientific Method

Designing and implementing a

research project

Ethics in Research
Types of Research

Measurements in Research

Use of Multimedia Visual Aids in this

Course
All MS PowerPoint course presentation slides, the

course outline, quizzes, the two sessionals and final

examination (after completion) supporting
eDocument files and the course participants project
reports will be uploaded to the yahoo webgroup CIIT
Research Methodology, from where they will be
accessible via Internet to all course participants and
any other scholars or persons in Pakistan or overseas
who are interested in this CIIT Research
Methodology course
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What is Business Research?

Business Research may be defined as the
systematic and objective process of gathering,
recording and analyzing data for aid in
making business decisions (Zikmund, Business
Research Methods, 2002, p. 6)
Systematicness and Objectivity are its

distinguishing features of Business Research,

which is important tool for managers and
decision-makers in corporate and noncorporate organizations

10

When is Business Research Used?

Typically, business research methods are used in
situations of uncertainty, that is, when decisionmakers face two or more courses of action and
seek to select the best possible alternative under
the circumstances. Business Research is hence
aimed at improving the quality of decisionmaking which, in turn, benefits the organization
and helps ensure its continuity and efficiency

11

Business Research
Research information is neither intuitive nor

haphazardly gathered.
Literally, research (re-search) -search again
Business research must be objective
Detached and impersonal rather than biased
It facilitates the managerial decision process for
all aspects of a business.

Information
Reduces

Uncertainty

I dont know
if we
should
offer on-site
child care?

Typical Users of Business Research

Methods
Businesses and Corporations
Public-Sector Agencies
Consulting Firms
Research Institutes
Non-Governmental Organizations
Non-Profit Organizations
Independent Researchers and Consultants
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It aint the things we dont know that gets us in

trouble. Its the things we know that aint so.
Artemus Ward

Common Business Research Methods &

Techniques
Surveys
Interviews
Observation
Experiments
Archival and Historical Data
Qualitative Analysis
Quantitative Analysis

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Fields Where Business Research is Often Used

(1) General Business Conditions and Financial and Accounting Research
Corporate Research

Short- & Long-Range Forecasting,

Business and Industry Trends
Global Environments
Inflation and Pricing
Plant and Warehouse Location
Acquisitions
Management and Organizational
Behaviour Research

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Total Quality Management

Morale and Job Satisfaction
Leadership Style
Employee Productivity
Organizational Effectiveness
Structural ssues
Absenteeism and turnover
Organizational Climate

Forecasts of financial interest rate

trends,
Stock,bond and commodity value
predictions
capital formation alternatives
mergers and acquisitions
risk-return trade-offs
portfolio analysis
impact of taxes
research on financial institutions
expected rate of return
capital asset pricing models
credit risk
cost analysis

Fields Where Business Research is Often Used

(2) Sales and Marketing Research
Information Systems Research

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Market Potentials
Market Share
Market segmentation
Market characteristics
Sales Analysis
Establishment of sales quotas
Distribution channels
New product concepts
Test markets
Advertising research
Buyer behaviour
Customer satisfaction
Website visitation rates

Knowledge and information needs

assessment
Computer information system use and
evaluation
Technical suppot satisfaction
Database analysis
Data mining
Enterprise resource planning systems
Customer relationship management
systems
Corporate Responsibility Research

Ecological Impact
Legal Constraints on advertising and
promotion
Sex, age and racial discrimination /
worker equity
Social values and ethics

Selected Examples of Real-Life Situations in

Which Business Research Methods are Used
A firm wants to produce and market a new product but first wants to

ascertain if there is a potential consumer demand for this product in markets

x,y and z
a multinational firm wants to establish a production facility in another

country after determining its technical and economic feasibility

A government agency wants to ascertain the satisfaction level of its

employees, the causes for any possible discontent, and propose a scheme for
enhancing this level
A financial institution wants to invest in commodities and commissions a

study to determine the past trends and forecast future returns in a portfolio
of commodities
The CEO of a firm wants to undertake a SWOT-Analysis as part of his plan to

redefine his organizations priorities

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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 Example

Is executive success correlated with high need for

achievement?
Are members of highly cohesive work groups
more satisfied than members of less cohesive
work groups?
Do consumers experience cognitive dissonance in
low-involvement situations?

"The secret of success is to know something nobody

else knows. "
Aristotle Onassis

Applied Research
Conducted when a decision must be made about a

specific real-life problem

Applied Research Examples

Should McDonalds add Italian pasta dinners to its

menu?
Business research told McDonalds it should not?
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

Basic and Applied Research

Basic Research aims to expand the frontiers of science and knowledge
by verifying or disproving the acceptability of a given theory or
attempting to discover more about a certain concept (non-specificity)
Example: How does motivation affect employee performance?

Applied Research focusses on a real-life problem or situation with a

view to helping reach a decision how to deal with it (Specificity)
Example: Should Corporation X adopt a paperless office environment?

26

Science and the Scientific Method

Science has been defined as the methodological and
systematic approach to acquisition of new knowledge
(Geoffrey Marcyzk, David DeMatteo, David Festinger, Essentials of
Research Design and Methodology, John Wiley & Sons, 2005, p. 4)

The scientific method, which has evolved since the 13th

century, concerns the set of tools, techniques and
procedures used by basic and applied researchers to
analyze and understand phenomena and prove or
disprove prior conceptions

27

The Essence of the Scientific Method

Characteristics of the Scientific Method

Basic
Research
Applied
Research
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Scientific
Method

Objectivity
Systematic Analysis
Logical Interpretation of Results

General Laws

Information or
Ideas for alternative
Courses of action

Elements of the
Scientific Method

Empirical Approach
Observations
Questions
Hypotheses
Experiments
Analysis
Conclusion
Replication

Scientific Method
The analysis and interpretation of empirical

evidence (facts from observation or

experimentation) to confirm or disprove prior
conceptions.

The Decision-making Process

Associated with the Development
and Implementation of a Strategy
Identifying problems and opportunities
Diagnosis and assessment
Selecting and implementing a course of action
Evaluating the course of action

Evaluation Research
Evaluation research is the formal, objective

measurement and appraisal of the extent to which

a given activity, project, or program has achieved
its objectives.

Performance-monitoring Research
Research that regularly provides feedback for

evaluation and control

Indicates things are or are not going as planned
Research may be required to explain why
something went wrong

Total Quality Management (TQM)

A business philosophy that embodies the belief

that the management process must focus on

integrating customer-driven quality throughout
the organization.

TQM
Stresses continuous improvement of product

quality and service.

Managers improve durability and enhance
features as the product ages.
Managers strive to improve delivery and other
services to keep their companies competitive

The Value of Business Research for Managers (1)

Reduction of uncertainty and improvement in

the quality of decision-making with several
consequent advantages (e.g. strategic,
operational) and benefits for organizations
Business Research Methods can be employed in
each of the following four stages:
(1) Identification of problems and/or opportunities

Useful for strategy planning, analysis of internal and

external organizational environment

35

The Value of Business Research for Managers

(2)
(2) Diagnosing and Assessment of problems and/or
opportunities
Its purpose is to gain insight into the underlying
reasons and causes for the situation. If there is a
problem, it asks what happened and why? If there is
an opportunity, it seeks to explore, clarify and refine
the nature of the opportunity and, in the case of
multiple opportunities, seeks to set priorities
(3) Selection and Implementation of Courses of Action
After alternative courses of action have been
determined, selection of the best possible course.
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The Value of Business Research for Managers

(3)
An important consideration is the quality of
forecasting which is an essential tool of research
(4) Evaluating the Course of Action
Business Research Methods are used after a course
of action has been implemented in order to
determine whether activities have been properly
implemented and have accomplished what they
intended to do
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The Value of Business Research for Managers

(4) Evaluation Research It is the formal objective

measurement and evaluation of the extent which an

activity, project or programme has achieved its goal, and
the factors which influence performance (e.g. audits). It
is also the formal objective measurement and evaluation
of the extent to which on-going activities, projects or
programmes are meeting their goals (performancemonitoring research)

Examples of performance-monitoring research:

(1) Are railway passengers satisfied with the level of

service the railway company is providing? If not, then

research may need to be undertaken to ascertain the
reasons for customer dissatisfaction and propose
corrective measures

38

The Value of Business Research for Managers

(5)
(2) What are the trends in retail and wholesale sector?

Can research suggest new ways to improve efficiency

in purchase transactions?

39

When to Conduct Business Research

Time
Constraints
Is sufficient
time
available
before
a managerial
decision
must be made?

No

Availability
of Data

Nature of the
Decision

Is the
Is
Yes
Yes
information
the decision
already
of
on hand
considerable
inadequate
strategic
for making
or tactical
the decision?
importance?

No

No

Do Not Conduct Business Research

Benefits
vs. Costs
Yes

Does the
Value of the
research
information
exceed the
cost
of conducting
research?

No

Yes

Conduct
Business
Research

Value versus Costs

Potential Value of a Business Research Effort

Should Exceed Its Estimated Costs

Value Should Exceed Estimated Costs

Value
Decreased certainty
Increased likelihood of a
correct decision
Improved business
performance and resulting
higher profits
Higher Profits
Better Reputation

COST

Costs

Research expenditures
Delay of business decision
Possible disclosure of
information to rivals
Possible erroneous
research results

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

Cross-functional Teams
Cross-functional teams are composed of

individuals from various organizational

departments such as engineering, production,
finance, and marketing who share a common
purpose.

The Building Blocks of Research

KNOWLEDGE

INFORMATION

DATA

45

Blend of information, experience and in-sights

That provides a framework that can be
thoughtfully evaluated when assessing new
information or evaluating relevant situations
Determination of relationship amongst data
with a view to facilitating understanding of the
phenomena, their relationships and decision-making
(e.g. past and predicted future sales trends)
Measurements of phenomena
(e.g. sales statistics of a department store)

Demands on Data & Information

Relevance to the problem or situation at hand
Must be available in a timely manner to the right person (manager or

decision-maker)
Completeness
Accuracy

Accessibility
Affordability
Integrateability into a broader global information or decision-support

system

46

Business Research in the International

Context

47

Business Research is being increasingly applied in an

international context in the wake of globalization and
the consequent freedom of movement of the resources
of labour, capital and information of businesses and
corporations:
Overseas market potential & Market knowledge is
essential
Joint ventures and relocating production lines
overseas
Framework considerations for investment and trade
(e.g. culture, legal environment, security, physical
infrastructure, availability and quality of human
resources, logistics, political stability, trade and
investment incentives)
A.C. Nielsen - more that 67% international business

Global Business Research

General information about country - economic

conditions and political climate

Cultural and consumer factors
Market and competitive conditions - demand
estimation

The Internet
Is Transforming Society
Time is collapsing.

Distance is no longer an obstacle.

Crossing oceans is only a mouse click away.
People are connected 24 hours a day, seven days a

week.
"Instantaneous" has a new meaning.

Internet Research
Seeking facts and figures about an issue

Surveys on Web sites

Global Information Support Systems

A Global Information System may be defined as an
organized collection of computer hardware,
communication equipment, software, data, and
personnel designed to capture, store, update, manipulate,
analyze, and immediately display information about
worldwide business activities
A Global Information System is a tool for providing past,
current and projected information on internal operations
and external activity. It organizes and integrates data
from production, operations, marketing, finance,
accounting and other business functions
(Zikmund, p. 22)
51

Decision-Support System
A computer-based system that helps decision makers

confront problems through direct interaction with

databases and analytical software programs

The purpose of a decision support system is to store

data and transform them into organized information

that is easily accessible to decision-makers

Decision-Support Systems are integrated in Global

Information Systems. They are aimed usually for

assisting managers and decision-makers in specific
organizational business units (e.g. divisions,
departments and functional areas) by providing
organized and adaptable information

52

Databases & Software

Databases are collections of raw data which have been

arranged in a logical manner and which can be stored and

processed electronically

Software are programmes that allow complex operations

to be undertaken on data and which give information for

managers and decision-makers

Data Warehousing & Data Mining

53

Data and Information Sources for Business

Researchers (1)
Internal Records

Example: Data about costs, shipments, inventory, sales, and other aspects of
regular operations which are collected from various functional areas of an
organization
Proprietary Business Research

Example: New data and information from projects which are undertaken ad
hoc to study specific company problems
Business intelligence Systems

Example: Information about nonrecurring developments in the external

business environment stemming from a network of sources and regular
procedures
54

Data and Information Sources for Business

Researchers (2)
On-Line Databases

Examples: PROQUEST, INFOTRAC, DIALOG, LEXIS-NEXIS, Dow Jones

News Retrieval Services, CompuStat
Internet

Examples: World Wide Web search engines (Google, Yahoo, Altavista, Lycos,
Excite etc.)
All Other Sources

Examples: Research Institutions, Libraries, Books, Journals, Periodicals,

Newspapers, Chambers of Commerce and Industry

55

Business Research in the 21st

Century
Increased globalization

Growth of the Internet and other information

technologies

Data and Information Sources for Business

Researchers (Pakistan)
Federal and provincial ministries of commerce, industries and production
Federal, provincial and city Chambers of Commerce and Industry
State Bank of Pakistan, Pakistan Banking Council, local and foreign banking

institutions
Stock Exchanges

National Investment Board

Export Promotion Bureau
Manufacturers, Traders and Exporters Associations
Research Institutes (e.g. Pakistan Institute of Development Economics)

Newspapers and Magazines (e.g. Business Recorder, Pakistan and Gulf

Economist)
Business and Trade Directories
Internet (e.g.: www.forexpk.com)
57

Business Recorder
(www.brecorder.com)

58