Business Research Methods: Introduction and Scientific Foundations
Introduction to Business Research and the Scientific Method
Curiosity or inquisitiveness is considered an inherent feature of human nature. To satisfy this curiosity, individuals find ways to solve problems and develop new styles of understanding. In common parlance, research refers to a search for knowledge. However, there is a distinct difference between general knowledge searches and academic research; research is defined as a scientific and systematic search for pertinent information on a specific topic. It involves a systematic investigation designed to develop or contribute to generalizable knowledge.
The Oxford English Dictionary defines research as the systematic investigation into and study of materials and sources in order to establish facts and reach new conclusions. It is further described as a studious inquiry or examination, particularly investigation or experimentation aimed at the discovery and interpretation of facts, the revision of accepted theories or laws in light of new facts, or the practical application of such new or revised theories. In a scientific context, research is an approach to answering questions, solving problems, or generating new knowledge through the systematic and orderly collection, organization, and analysis of information, with the goal of making that research useful in decision-making.
Knowledge acquisition can occur through reasoning or intuition, but most importantly, it is gained through the use of appropriate methods. The scientific method is a standardized set of techniques for building scientific knowledge. It encompasses procedures for making valid observations, interpreting results, and generalizing those results. This process involves the analysis and interpretation of empirical evidence—facts derived from observation or experimentation—to confirm or disprove prior conceptions. Science itself is defined as the methodological and systematic approach to the acquisition of new knowledge, characterized by its reliance on tools and procedures evolved since the 13th century to understand phenomena.
Characteristics and Elements of the Scientific Method
The essence of the scientific method is grounded in objectivity, systematic analysis, and the logical interpretation of results. Its core elements include the empirical approach, observations, questions, hypotheses, experiments, analysis, conclusion, and replication. The process typically begins with prior knowledge and observations, leading to the formulation of hypotheses. These hypotheses undergo testing through observation or experimentation, resulting in a conclusion that forms new knowledge.
There are eight primary characteristics of the scientific method:
Aim/Purpose: Research is guided by a conceptual framework, model, or theory that generates specific questions to be asked or answered.
Rigor: This involves rigorous reasoning based on the interactions among theories, methods, and findings.
Testability: This refers to the analysis of performance parameters against design parameters.
Reliability: This characteristic ensures that the same relationship stands repeatedly under the same design parameters.
Accuracy and Confidence: Accuracy is defined as the closeness of findings to reality. Confidence is the probability that estimations are correct. Generally, accuracy improves as confidence increases.
Objectivity: Conclusions drawn from the analysis of data must be based on facts and logic rather than subjective bias.
Generalizability: This is the degree to which study results can be applied to a broader context. Results are generalizable when findings apply to most contexts and most people most of the time.
Thrift (Cost-effectiveness): Research should seek simplicity in explaining phenomena. This involves straightforward facts, critical assumptions, and the minimization of dependent variables.
Objectives and Significance of Research
Research is carried out with definite objectives and a concern for information and facts. The primary objectives include:
Gaining familiarity with a phenomenon or achieving new insights into it (Exploratory or Formulative research studies).
Portraying accurately the characteristics of a particular individual, situation, or group (Descriptive research studies).
Determining the frequency with which something occurs or its association with something else (Diagnostic research studies).
Testing a hypothesis of a causal relationship between variables (Hypothesis-testing research studies).
In terms of significance, research inculcates scientific and inductive thinking, helping to develop logical habits of organization. It provides the basis for nearly all government policies within an economic system and helps solve operational and planning problems in business and industry. For social scientists, it is crucial for studying social relationships and seeking answers to social problems. Good research follows the standards of the scientific method, which requires a clearly defined purpose, detailed processes, thoroughly planned designs, frankly revealed limitations, and high ethical standards.
Research Method vs. Research Methodology
Research Methodology is defined as the science of studying how research is done scientifically. It describes the various steps adopted by a researcher in studying a problem, along with the logic behind those steps. It represents the entire strategy used to achieve an objective and find correct procedures for solutions.
In contrast, Research Methods refer to the specific tools, techniques, or processes used in performing research operations. This includes tools for the selection and construction of research techniques, such as experiments, tests, and surveys. While a method is concerned with the discovery of solutions to a research problem, methodology is the science of understanding how that performance is methodically executed.
Specific differences include:
Meaning: Methods are techniques for selection, collection, and analysis of data. Methodology signifies the way to efficiently solve research problems.
Nature: Methods involve behavior and instruments. Methodology is the science of the performance.
Scope: Methods involve carrying out the specific test. Methodology involves studying the techniques utilized to perform those tests.
Basic and Applied Research
Research can be placed on a continuum between basic and applied research. Basic research (also known as pure or fundamental research) is conducted mainly to expand the limits of knowledge. It is driven by a scientist's curiosity and is not directly involved in solving pragmatic problems. Examples include studies on the evolution of social systems, the discovery of graphene, or theories of gravity.
Applied research is conducted to provide information necessary to solve a specific real-life problem or to make decisions regarding particular courses of action. It usually yields obvious benefits or uses, such as the development of the Polio vaccine, the creation of the Tata Nano, or strategies for encountering Monga (seasonal deprivation) in Northern Bangladesh.
In a business context, basic research might ask, "Is executive success correlated with a high need for achievement?" whereas applied research would ask, "Should McDonald's add Italian pasta dinners to its menu?" Basic research explores if consumers experience cognitive dissonance in low-involvement situations, while applied research tests if a product priced at will sell better than at .
Defining and Applying Business Research
Business research is the systematic and objective process of gathering, recording, and analyzing data to aid in making business decisions. Zikmund et al. (2010) define it as the application of the scientific method in searching for the truth about business phenomena. This includes defining opportunities/problems, generating ideas, monitoring performance, and understanding business processes.
The building blocks of research are structured as follows:
Data: Measurements of phenomena (e.g., sales statistics of a department store).
Information: The determination of relationships among data to facilitate understanding (e.g., past and predicted future sales trends).
Knowledge: A blend of information, experience, and insights that provides a framework for evaluation.
Fields of Business Research Application
Business research methods are applied across various functional areas:
General Business Conditions: Forecasting (short- and long-range), industry trends, global environments, inflation, and warehouse location.
Management and Organizational Behavior: Total Quality Management (TQM), morale, job satisfaction, leadership style, productivity, absenteeism, and turnover.
Financial and Accounting Research: Forecasts of interest rates, stock/bond predictions, capital formation, risk-return trade-offs, and Capital Asset Pricing Models (CAPM).
Sales and Marketing Research: Market potential, market share, segmentation, buyer behavior, customer satisfaction, and website visitation rates.
Information Systems: Knowledge needs assessment, database analysis, data mining, Enterprise Resource Planning (ERP), and Customer Relationship Management (CRM) systems.
Corporate Responsibility: Ecological impact, legal constraints on advertising, and ethics regarding sex, age, or racial discrimination.
Case Studies in Business Research
The Jelly Belly brand used customer research to grow its official flavor count to fifty and beyond. Through the "Jelly Belly Dream Bean Contest," consumers submitted ideas to win prizes. Survey research also suggested consumer interest in sports performance, leading to "Sport Beans" containing electrolytes, carbohydrates, and vitamins.
DuPont, with employees worldwide, has conducted four work/life needs assessment surveys since 1985. The research identified that as the workforce aged, childcare needs diminished while elder care needs emerged. The study showed that support from management improved results and reduced employee stress.
The Value of Research for Managers
Business research reduces uncertainty and improves decision-making quality. It is employed in four stages:
- Identification of problems and opportunities.
- Diagnosis and Assessment: Gaining insight into underlying reasons and causes. If multiple opportunities exist, research helps set priorities.
- Selection and Implementation: Determining the best course of action from alternatives, often utilizing forecasting tools.
- Evaluating the Course of Action: Determining if activities were properly implemented and achieved intended goals. This includes Evaluation Research and Performance-monitoring research. Examples include checking railway passenger satisfaction or identifying efficiency trends in the retail sector.
Decision Criteria for Conducting Research
Managers must weigh the value of research against its costs. Value includes decreased uncertainty, higher likelihood of correct decisions, and better reputation or profits. Costs include the literal research costs, delays in decision-making, possible disclosure of information to rivals, and the possibility of error.
Research should be undertaken only if:
- Sufficient time is available before a decision must be made.
- Information already on hand is inadequate.
- The decision is of significant strategic or tactical importance.
- The value of the information exceeds the cost of conducting the research.