Types of Business ResearchWritten by William G. Zikmund, Barry J. Babin, Jon C. Carr, and Mitch Griffin in Business Research Methods. South-Western Cengage Learning. 2009.
Business research covers a wide range of phenomena. For managers, the purpose of research is to provide knowledge regarding the organization, the market, the economy, or another area of uncertainty.
I. Definition
Business research is the application of the scientific method in searching for the truth about business phenomena. These activities include defining business opportunities and problems, generating and evaluating alternative courses of action, and monitoring employee and organizational performance. Business research is more than conducting surveys.
This process includes idea and theory development, problem definition, searching for and collecting information, analyzing data, and communicating the findings and their implications. This definition suggests that business research information is not intuitive or haphazardly gathered.
Literally, research (re-search) means “to search again.” The term connotes patient study and scientific investigation wherein the researcher takes another, more careful look at the data to discover all that is known about the subject. Ultimately, all findings are tied back to the underlying theory.
The definition also emphasizes, through reference to the scientific method, that any information generated should be accurate and objective. The nineteenth-century American humorist Artemus Ward claimed, “It ain’t the things we don’t know that gets us in trouble. It’s the things we know that ain’t so.” In other words, research isn’t performed to support preconceived ideasbut to test them. The researcher must be personally detached and free of bias in attempting to find truth. If bias enters into the research process, the value of the research is considerably reduced.
Finally, this definition of business research is limited by one’s definition of business. Certainly, research regarding production, finance, marketing, and management in for-profit corporations like DuPont is business research. However, business research also includes efforts that assist nonprofit organizations such as the American Heart Association, the San Diego Zoo, the Boston Pops Orchestra, or a parochial school. Further, governmental agencies such as the Federal Emergency Management Agency (FEMA) and the Department of Homeland Security (DHS) perform many functions that are similar, if not identical, to those of for-profit business organizations. For instance, the Food and Drug Administration (FDA) is an important user of research, employing it to address the way people view and use various food and drugs. One such study commissioned and funded research to address the question of how consumers used the risk summaries that are included with all drugs sold in the United States.
II. Types of Business Research
Business research is undertaken to reduce uncertainty and focus decision making. In more ambiguous circumstances, management may be totally unaware of a business problem. Alternatively, someone may be scanning the environment for opportunities. For example, an entrepreneur may have a personal interest in softball and baseball. She is interested in converting her hobby into a profitable business venture and hits on the idea of establishing an indoor softball and baseball training facility and instructional center. However, the demand for such a business is unknown. Even if there is sufficient demand, she is not sure of the best location, actual services offered, desired hours of operation, and so forth. Some preliminary research is necessary to gain insights into the nature of such a situation. Without it, the situation may remain too ambiguous to make more than a seat-of-the-pants decision. In this situation, business research is almost certainly needed.
In other situations, researchers know exactly what their problems are and can design careful studies to test specific hypotheses. For example, an organization may face a problem regarding health care benefits for their employees. Awareness of this problem could be based on input from human resource managers, recruiters, and current employees. The problem could be contributing to difficulties in recruiting new employees. How should the organization’s executive team address this problem? They may devise a careful test exploring which of three different health plans are judged the most desirable. This type of research is problem-oriented and seems relatively unambiguous.
This process may culminate with researchers preparing a report suggesting the relative effect of each alternative plan on employee recruitment. The selection of a new health plan should follow relatively directly from the research.
Business research can be classified on the basis of either technique or purpose. Experiments, surveys, and observational studies are just a few common research techniques. Classifying research by its purpose, such as the situations described above, shows how the nature of a decision situation influences the research methodology. The following section introduces the three types of business research:
1. Exploratory
Exploratory research is conducted to clarify ambiguous situations or discover potential business opportunities. As the name implies, exploratory research is not intended to provide conclusive evidence from which to determine a particular course of action.
2. Descriptive
As the name implies, the major purpose of descriptive research is to describe characteristics of objects, people, groups, organizations, or environments. In other words, descriptive research tries to “paint a picture” of a given situation by addressing who, what, when, where, and how questions.
3. Causal
Causal research seeks to identify causeand-effect relationships. When something causes an effect, it means it brings it about or makes it happen. The effect is the outcome. Rain causes grass to get wet. Rain is the cause and wet grass is the effect.
III. Stages in the Research Process
Business research, like other forms of scientific inquiry, involves a sequence of highly interrelated activities. The stages of the research process overlap continuously, and it is clearly an oversimplification to state that every research project has exactly the same ordered sequence of activities. Nevertheless, business research often follows a general pattern. We offer the following research business stages:
1. Defining the research objectives
2. Planning a research design
3. Planning a sample
4. Collecting the data
5. Analyzing the data
6. Formulating the conclusions and preparing the report
