RESEARCH IN BUSINESS

In the competitive global economy of the twenty-first century,
managers are challenged to make tough business
decisions, such as how to keep an annual growth rate of
20 percent, how to increase employee productivity, how
to improve product quality, how to cut down costs, and
how to reduce the employee turnover rate. To make such
decisions correctly, managers need research, which is a systematic
inquiry that provides scientific findings and conclusions
to guide business decisions.

ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION 641
Research in Business
CRITERIA OF GOOD BUSINESS
RESEARCH
Good business research is a scientific approach that meets
the following criteria:
1. The problem of the research should be explicitly
stated.
2. The need for the research should be well justified.
3. The purpose of the research should be clearly
defined.
4. The research method should be selected according
to the nature of the problem and designed scientifically
to ensure a valid and reliable outcome.
5. The research procedures should be described in sufficient
detail to permit other researchers to replicate
the research.
6. The limitations of the research design and procedures
should be reported.
7. The analysis and interpretation of data should generate
findings that reveal the evidence of scientific
measurements.
8. The research conclusions should be drawn based on
the findings, and the recommendations should be
based on the conclusions.
BUSINESS RESEARCH METHODS
Business research methods refer to the ways researchers
gather the evidence needed to make the right decisions.
Common business research methods include case studies,
the Delphi method, experiments, surveys, and content
analysis.
Case Studies. Case studies examine a single, salient business
situation or organization by collecting key facts and
analyzing them in light of business functions, theories,
and best practices. The goal is to generate possible solutions
to problems experienced in that particular situation
or organization. The case study begins with an explicit
problem statement. Based on the problem statement,
researchers decide what data need to be collected for
analysis. For example, a company case study usually needs
to collect both quantitative (e.g., financial and sales figures)
and qualitative (e.g., management memos and
reports) data to perform the following analyses:
• Industry analysis to understand its growth, market
structure, and competition
• Product/service analysis to evaluate the company’s
market share, product/service portfolio, marketing
strategies, and competitive advantage
• Financial analysis to assess the company’s profitability,
liquidity, leverage, performance, and growth
potential
• Management analysis to examine the top-management
strategies, short- and long-term objectives,
organizational structure, and decision styles
These functional analyses enable researchers to identify
the company’s strengths, weaknesses, opportunities,
and threats (SWOT). Based on the SWOT analysis,
researchers can develop alternative solutions, recommendations,
and implementation plans.
The Delphi Method. The Delphi method is a qualitative
approach through which a panel of experts is queried
Phase 1
Conceptualization
• Identify a problem
• Justify the need
• Define the purpose
Phase 2
Research Design
• Select a proper method
• Decide population & sample
• Develop measurement tool
Phase 3
Research Procedures
• Reach subjects
• Collect data
• Identify limitation
Phase 5
Research Conslusion
• Discuss findings
• Address implications
• Suggest future research
Phase 4
Data Analysis
• Code data
• Analyze data
• Interpret data
Five interrelated phases of the business research process
Figure 1

642 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION
Research in Business
repeatedly about possible developments of a particular
product/service, technology, workforce, or business strategy
in varied scenarios. After the first round of inquiries,
the experts review the responses of their peer panelists,
revise their own if needed, and then start the second
round of inquiries. In most cases, through three to four
rounds, the experts’ assessments converge toward a set of
conclusions that form the basis for solutions to the problem(
s). This method is effective for predicting uncertain
future business environments and developments, especially
when quantitative forecasting based on past trends is
not reliable.
Experiments. Experiments are designed to test the causeand-
effect relationships that researchers suspect exist in a
business environment. There are two categories of experiments:
laboratory and field. A laboratory experiment takes
place in an artificial setting created by researchers—such
as testing a new drug on mice or testing automobile safety
in collisions using dummies. By contrast, a field experiment
takes place in a natural setting, such as testing the
effect of implementing a total-quality-management system
on product quality and employee productivity in a
company.
Whether in a lab or in the field, researchers exercise
high control when they are able to manipulate independent
variables, assign subjects randomly to control and
experiment groups, and control extraneous variables. For
example, a company wants to know whether newspaper
coupons for its product affect sales. The company randomly
selects ten communities from the fifty communities
having daily newspapers within its sales region and
then randomly assigns them to control and experiment
groups, with each having five communities. On Tuesday,
the control group receives a newspaper advertisement for
the company’s product without a coupon, while the
experiment group gets the same advertisement with a
coupon for a 15 percent discount. Sales figures from the
two groups are totaled on the following Saturday (the
coupon’s expiration date). Through a statistical analysis of
the sales figures, the experiment shows whether or not the
coupon has significantly affected the sales.
Surveys. Survey research is a method of systematically
questioning a sample of respondents representing a specific
population regarding their beliefs, attitudes, and
behaviors. This method is useful for collecting information
about a population that is too large for every member
to be studied. To ensure the generalizability of the
findings, researchers design a survey by taking the following
steps:
1. defining the population of the study
2. determining the sample size that is large enough to
represent the population yet small enough to be economical
3. selecting a sampling method that ensures that each
member in the population has an equal chance to be
selected
4. determining whether a questionnaire or structured
interview is more appropriate for gathering information
5. developing effective questions by using clear, simple
language, nonleading or non-multifaceted questions,
mutually exclusive choices, and group categories for
sensitive information such as age, salary, and morals
For a questionnaire survey, researchers first decide
whether mail, e-mail, or online is the appropriate medium
for ensuring a high response rate. Second, researchers need
to send a persuasive cover letter with the questionnaire to
persuade readers to complete and return the questionnaire.
If the first mailing (or e-mailing) generates a low response
rate, a follow-up mailing is necessary to remind nonrespondents
to complete and return the questionnaire.
For an interview survey, researchers first decide
whether a telephone or face-to-face interview is more
appropriate. Interviewers must be trained before conducting
interviews. The interviewer begins by making the
interviewee feel comfortable and important by giving a
friendly greeting, explaining the purpose of the interview
and the importance of the interviewee’s participation, and
asking if tape recording is permitted. During the interview,
the interviewer should always use an interview guide
of predeveloped questions and follow-ups for each interviewee.
At the end, the interviewer should express appreciation
to each interviewee for participating.
Content Analysis. Content analysis is a method for making
inferences by systematically and objectively identifying
characteristics of messages embedded in the texts and
the causal relationships of message contests and outcomes.
This method is widely used in the research of business and
managerial communications, negotiations, and Webbased
e-business. Content analysis employs a systematic
procedure of selecting texts, developing content categories,
and coding and analyzing data. Using computers
to store and analyze data, researchers are able to conduct
large-scaled content analysis with massive amounts of data
without much difficulty.
BUSINESS RESEARCH PROCESS
To conduct business research effectively, researchers follow
a general research process of five phases and must understand
their interrelationships (see Figure 1).

ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION 643
Retailers
Conceptualization engages researchers in identifying a
problem or topic worth studying, reviewing relevant literature
to justify the need for the research, defining the purpose
of the research, and phrasing the problem in writing
as research questions or hypotheses, which set the scope of
the research.
Research design requires that researchers transform the
research concepts into operational, or measurable, terms
by completing these activities: First, select an appropriate
research method as discussed in the previous section. Second,
determine the population of the study, its sample
size, and sampling method. Third, develop an instrument
for measuring the existence, characteristics, size, quantity,
and quality of the research variables with proper scales.
Research procedures in most studies consist of two
common activities: reaching subjects and collecting data.
For instance, an experiment reaches subjects by putting
them in either control or experiment groups for collecting
data, whereas a survey reaches subjects by mailing them
questionnaires or telephoning them for collecting data. In
addition, researchers need to indicate any limitations in
the research design or procedures.
Data analysis requires researchers to sort out nonusable
data such as incomplete questionnaires or dropouts in
an experiment, code and edit data to meet the computer
requirements, and analyze data quantitatively or qualitatively
or in combination, thereby transforming data into
information, or findings, for interpretation.
Research conclusion includes discussing the significance
of the findings such as whether the hypotheses have
been accepted or rejected or the research questions have
been answered; addressing the theoretical, practical, or
pedagogical implications; and recommending future
research directions.
ETHICS IN BUSINESS RESEARCH
Business research demands ethical behavior. When
research involves human subjects, researchers should first
successfully complete an ethics workshop from the U.S.
Department of Health and Human Services and then submit
for approval a research proposal that ensures ethical
compliance with their organization’s institutional review
boards. When research involves corporate internal documents,
researchers should protect owners’ rights to privacy
and confidentiality.