Importance of Business Research for Effective Decision-Making - Coursework Example

Business Research and Managerial Decisions Business environments are dynamic and markets evolve continuously at a fast pace. A success of a business will depend largely upon being able to understand and react to the business environment. This process will include having a high awareness level of the industry and its drivers, the competitors, customer needs and so forth. This is only possible with proper insight to the business environment and having in-depth understanding of the market being catered to and the industry within which the organization operates. Within the framework of business research, market research takes up the primary position. “In order to produce value and satisfaction for customers, companies need information at almost every turn”(Armstrong and Kotler, 2000). As such, it is an established reality that market research and market information are critical aspects of a successful business operation. Market research can yield valuable information pertaining to many aspects the market and consumers including the level of competition present in the market; the size of the market; the segmentation patterns; the current distribution mechanisms, consumer’s key benefit expectations as well as the attitudes and beliefs of the potential customers. Use of Secondary Data in Research Process Some of these areas maybe researched using sources that are already available to the firm. Internet sources, published market research, government and other institutional data as well as company’s own primary data can provide market information that can be utilized in developing competitive business strategies. This type of market research is known as secondary research and is relatively cheap and easy to carry out. At the same time however, data gathered in this way has to be treated with caution, as it may be outdated as well as irrelevant. For example, in order to assess the size of the potential market, a company can take the number of households as key indices. Import data can also be accessed via Customs publications. Use of Primary Data in the Research Process When looking at more qualitative information for gaining an insight in to the market, consumer preferences, buying patterns and price sensitivity, the source of the data becomes the potential customers as well as end users. Data collected in this way (for the sole use of the generator) is known as primary research (Jewell 2002). Such data is critical in designing a product offer that meets the consumer needs effectively in terms of style, features and price. Importance of Business Research for Effective Decision-making When considering the place that marketing research gets in the process of marketing decision-making, it is evident that informed decisions cannot be made unless up to date and relevant information is available. Research component thus becomes a critical aspect of an effective marketing information system. An example of how a company uses business research in its strategizing and decision making can be assed to note how research is of critical importance to organizational competitiveness. A company can combine primary and secondary data and use demographic and economic data about the whole market, in order to anticipate demand and thereby forecast future sales trends. Here, the market research provides the base figures for business forecasting through extrapolation and trend analysis techniques. Researching on the distribution channels that can be used to bring the product to the customers, the firm could analyze the existing retail channels of the competitors. This would then enable new channels to be established, widening the product presence and increasing sales volumes. Importance of Systematic Research Process In order to benefit from business research, it is important that the company conduct the research in a systematic manner than resorting to ad hoc activities which will lack in meeting objectives of a business research. Hence an inquiry in to different steps involved in a systematic business research process is warranted. Understanding the strengths and weaknesses of each stage is also important in designing and implementing a successful business research. The first stage of the research process involves Problem Identification and Research Proposal Development. Based on the decisions taken and consensus reached in this stage, the subsequent stage of Research Design will establish fundamental elements of the research such as the type of research to be used, the type of data gathering needed, contact method to be chosen etc. The third stage of Instrument and sample design includes the development of questionnaires for surveys or if interviews are the chosen mode, the interview plan. The type of sampling to be used should also be established at this stage. The next stage involves the collection of data which then should be processed, analyzed and presented to the relevant users of the information to aid in the decision making process. Merits and Issues at Each Stage of the Process When a research is being conducted, there are numerous merits and issues which will be encountered as one progress through the different stages of the research process. It is important that these merits are exploited while issues are surmounted in order to maximize the effectiveness of the research being conducted. Problem Identification & Research Proposal Development In conducting an effective research , it is important to establish the purpose of the study clearly and consider the key variables, which are being identified and how the data gathered will be analyzed (Anderson, 2004). In this stage, the research objective should also be set as to whether it is exploratory, descriptive or causal research that is being conducted (Armstrong & Kotler 2000). The merits of following this stage of the process is that at the very outset, the research is given a clear direction and the actual information and data needs are identified. The issues surrounding the problem identification and research proposal development includes the lack of consensus between the managers involved on what the key variables being researched on and the inability to identify the real problem to which the research study is seeking answers for. It’s often the case that “many managers know that something is wrong, without knowing the specific cause” (Armstrong & Kotler 2000, Page. 111). Research Design At this crucial stage of the research, the type of data to be used, the manner in which the data to be gathered, the specific research approaches, contact methods, sampling plans and the type of instruments to be used will be established. The advantages of following this stage of the process include the ability to plan the research process properly and translate the objectives and the research question in to set of operational and actionable activities. The issues include choosing research approaches, sample bases and instruments which are incompatible with the research objective. Decisions as to whether the research should be quantitative or qualitative would be one of the key issues to be answered at this stage. Qualitative Vs. Quantitative Research Motives behind initiating a qualitative research are mainly to uncover or establish a basic understanding, knowledge or a hypothesis pertaining to a certain issue. Such research often lays the foundation for further research of quantitative nature, which can establish the validity of new knowledge generated through the qualitative research. Qualitative research differs from quantitative research on grounds of what is being researched of. “Qualitative research involves the collection of data about attitudes, beliefs and intensions” (Hall et al 2004). The objective of qualitative research is to unearth in-depth knowledge of reasons, which drives the human behavior while quantitative research on the other hand is concerned of data that can be measured. There are numerous means of conducting qualitative research, methods such as focus groups, surveys through application of unstructured or semi structured questionnaires as well as participant observations (Wolcott 1995). Instrument and Sampling Design When drawing up the sampling design, questions on sampling unit, sampling size and sampling procedures should be addressed. Here, the questions of who will have the answers to the questions being researched on; how many of them should be researched on and how to select these respondents are the key issues. Of the main approaches to sampling which includes probability and non-probability sampling, later is the most used in qualitative research (Anderson, 2004). Methods such as accidental sampling, purposive sampling and quota sampling can be applied as sampling procedures. In designing the research instrument, there are a host of practical issues, which needs to be considered. The most common research instrument remains the questionnaire and developing an effective questionnaire requires carefully consideration of the type of questions being asked, the content of the questionnaire, the wording, and the sequence of questions. The format and appearance as well as the length of the questionnaire will be crucial for conducting a successful research. At the very outset, it should be decided as to whether open or close-ended questions will form the questionnaire or a combination will be used. The nature of questions being asked will also affect the response rate of a research. If too intimate or personal questions are asked, there should be a provision for the respondent to decline to reveal such information. If other instruments as electronic research tools are utilized, the ease of use, the level of usage by the sample unit etc needs to be considered. Data Collection Stage At this stage of the research, the actual implementation of the research which was designed takes place. If primary data were to be collected, then field research involving, surveys, interviews, focus groups or observations may take place. Where primary data gathering is concerned, it is important to be fully aware of the purpose of the study and keep an open mind so that data, which may offer contrary findings, are also assimilated without investigative bias. Another issue encountered at this stage is the errors in recording, errors of interpretation etc and care should be taken in minimizing the effects of these on the research. Research through Questionnaire Surveys Surveys remain one of the major forms of research and the most widely used where quantitative research is concerned. “Survey research is the method of gathering data from respondents thought to be representative of some population, using an instrument composed of closed structure or open-ended questions” (Survey Research 2006). Nature of survey research allows effective and efficient data gathering from a large population and thus most suited for the needs of quantitative research. However, they are also used in carrying out qualitative research and needs to be structured differently with open-ended questions to facilitate insightful answers from the respondent. While surveys can be carried out through interviews or by questionnaires, the use of questioners in a survey widens the possible coverage of the population as it is much easier to administer through traditional or electronic mail and less costlier than personal interview method. However the rate of response may be lower and the effectiveness of questionnaire based survey research is dependent upon how well designed the questionnaire is in terms of clarity, format, as well as ease of administration. Interviews Interviews are becoming a more common form of qualitative data gathering and facilitate generation of in-depth responses when structured appropriately as completely open ended or semi structured, depending up on the purpose of the study (Anderson, 2004). The mode of interviews should also be considered depending upon constraints and resources at disposal. Although face-to-face interviews are the most common, telephone interviews are gaining in its popularity due to convenience and cost effectiveness Secondary Data collection If the research will be utilizing secondary data sources, such as company’s internal data, commercial data companies or internet and other sources such as libraries, care should be taken to filter out unnecessary information and keep the information gathering process efficient. Use of Index cards to record and categorize information during the gathering process is advantages (Bell 1993). Data Analysis and Presentation This final stage of the research involves the analysis and presentation of the research results. It is important to keep the initial research objectives in mind when analyzing the data and in presenting the results, the users of the information should be born in mind and the presentation should be designed to meet the needs of these particular users. Recommendations Having analyzed the research process, and merits and demerits associated with each stage of the process, the following recommendations can be made to make the process more effective. The most important aspect of the process is the research design where by the key elements of the research is decided upon. Therefore, it is recommended that the research design be assessed for its validity using the following key criteria. Key Criteria Applied in Evaluating Research Quality In the second stage of the research process of establishing the fundamental elements of the research design, it is important to apply some key criteria is assessing the quality of research which will result from the chosen research design. Some of the key criteria include the credibility and validity of the research; the reliability of the findings and lastly the representativeness of the research results. These attributes form the fundamental framework within which the researcher should operate and comply to. Each form of research will measure differently against these criteria and merits and demerits of a research method will depend on how critically important is the different criteria to the achievement of intended research objectives. For example, where qualitative research is concerned, the reliability attribute is lower and findings cannot be generalized unlike the case of quantitative research where the reliability is high. Credibility Credibility along with integrity forms the most important aspect of research quality where the overall research process from idea inception to final output of reports are assessed for accuracy, rigor of testing and integrity of the process. One key reason, which lends to poor credibility of a research is the “lack of focus on rigorous research approaches may result in regression to less sophisticated methodologies” (Levin, & O Donnel d.n.). Efforts to bring in a high level of credibility to the research should be done at the time of designing the research strategy. The data should be collected in a manner which lends credibility to the whole process and there should be sufficient sample sizes and evidence of unbiased data sources to indicate that the whole process has been carried out with integrity and rigor which are the key words which lends to research credibility. Care should also be taken to avoid errors in research, including the honest ones which result in due to limitations in knowledge of the phenomenon being researched on (Indrayan 2004). The more serious errors result in through negligence in the research process while the blatant errors of research misconduct which includes plagiarism, misrepresentation of data, inflation of results etc can totally nullify the credibility of a research. In the case of questionnaire based survey research, the credibility levels can be rather high, provided that the designing of the research is carried out effectively. The fact that surveys involve a large number of respondents lends to the rigor of the research process and the uniform nature of the probing tool, the questionnaire being applied reduces the level of bias that can creep in to all forms of research. If the research design does not measure up well to these criteria, the usefulness of the information to the managers will be low and may even lead them to make wrong business decisions. Validity Validity of the research is essential to facilitate the genaralisability and transferability of results. “ Validity refers to the degree to which a study accurately reflects or assesses the specific concept that the researcher is attempting to measure” (Survey Research 2006). The validity of a research should be both internal and external. “Internal validity refers to the rigor with which the study was conducted and the extent to which the designers of a study have taken into account alternative explanations for any causal relationships they explore (Huitt, 1998). When it comes to measuring against the criterion of validity, “surveys tend to be weak on validity as the artificiality of the survey format puts a strain on validity” (Survey Research 2006). It’s difficult to get a good grasp of human feelings and motivations through terms such agree and disagree and even open ended questionnaires can limit the actual capturing of the true essence of feelings and behaviors as some respondents may not be able to express themselves fully or accurately. In some issues such as researching on brand loyalty, brand image etc, people may not know why they associate with a specific brand or how the brand persona appeal to them. In such cases, psychological interpretations may be needed to unearth the real reasons contained within respondent’s answers. Reliability Reliability criterion assesses the accuracy with which the questionnaire or other data gathering procedure are applied. “Reliability is the extent to which an experiment, test, or any measuring procedure yields the same result on repeated trials” (Levin & O Donnel n.d.). This aspect of research is important since it allows for consistent outcomes to be expected when the same research instrument or procedure is applied in another context. Surveys score high on reliability due to the standardized nature of questionnaire. However when open ended and unstructured questionnaires are being considered for qualitative research purposes, the reliability of interpretation may be affected. Representativeness Representativeness of research refers to how much a result can be generalized or transferred to other situations and context. Representativeness is affected by the research methodology, the sample size, the rigor applied and how well the sample population represents the total population in consideration. Survey research offer high representativeness as it is applied on to large samples of population and allows for results that can be generalized. However when questionnaire based research is applied with a qualitative approach, the representativeness suffers. It should be noted that “many qualitative research studies are not designed to be generalized” (Survey Research 2006). In the design stage of the instruments such as questionnaires, it is recommended that the questionnaires are piloted, so that the instruments clarity as well as effectiveness can be assessed and adjustments can be made to certain wording and removing technical jargon (Bell, 1993). In the analysis and interpretation stage, there are inherent problems such as respondents giving false answers with the aim of presenting a socially favorable image of themselves or merely opting to choose the mid range or average scales if the questionnaire is formatted based on lickert scale. When survey research is being carried out with the intention of gathering data of qualitative nature, the interpretation of answers provided for open-ended questions can be difficult and categorization of a wide array of data may pose problems. It is therefore recommended that statistical adjustments and other established methods of minimizing respondent bias in final results be applied and interpretation of data gathered be done by professionally qualified researchers. Ethical considerations In addition to the above recommendations, the ethical manner in which the research has been conducted has much bearing on the quality of the research. When respondents are being enrolled to a research, informed consent should be sought and sufficient information about the survey should be provided. “Special steps must be taken when doing research on "vulnerable" populations, e.g., children, newly-arrived immigrants, etc.” (Indrayan 2004). Confidentiality of the information provided by respondents should be a key consideration where the privacy of the participants is assured. The susceptibility of questionnaire based survey research to be associated with unethical practices will mainly relate to the safety of recorded information. At the same time when large sample sizes are involved, they need to be debriefed fully on the intention of the research. In certain instances, in order to make the questionnaires effective, the actual questions are foiled within other questions. In such circumstances, the respondents should be later told of the actual question, which was being researched. Conclusion In conclusion, it can be stated that business research which would be the means of providing valuable insight in to markets, consumer behaviors and attitudes, industry conditions or competition is a vital aspect of conducting sound business. Managers must understand the usefulness of research and use the information unearthed though research process in creating and implementing business strategies which will place the organization at a competitive position. To ensure research is carried out effectively, a systematic process should be followed. At each stage of this research process, steps should be taken to maximize merits and minimize issues that can affect the quality of the research outcome. Finally once the research has been carried out the analysis and presentation of information must be done by professionals who are well versed in interpreting research information and who are able consider the inherent problems such as respondent bias, median hallo etc and tailor make the presentation to suit the users of the information. References: Armstrong, G. & Kotler, P. Marketing: An Introduction, 5th ed. Singapore: Person Education Inc., 2000. Anderson, V. (2004). Research method in Human Resource Management. London: Charted Institute of Personnel and Development. Bell, J. (1993). Doing Your Research Project. Buckingham: Open University Press Hall, D., Jones, R. & Raffo, C. 2004. Business Studies. 3rd ed. London: Causeway Press Limited. Huitt, William G. (1998). Internal and External Validity. Retrieved on 28th October 2007 from http://www.valdosta.peachnet.edu/~whuitt/psy702/intro/valdgn.html Indrayan, A. 2004. “Elements of medical research” Indian Journal of Medical Research. 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