The Role of Business Research Theory Building

The scope of business research What is “business” anyway??? Is research applicable to all business units/functions? profit, nonprofit, government, education… Talk about various units and types of research. My experience in each Marketing example throughout this course OPTION: end class

Business research defined the systematic and objective process of gathering, recording, and analyzing data for aid in making business decisions I said earlier that my three year old would not get an A on this course. This definition of business research underscores why. Know this definition (hint) but also know what it means and the implications for how research is conducted: systematic: what does this mean Objective: what does this mean scientific not intuitive or haphazardly gathered impersonal in business research, in contrast to some other forms of research which we will discuss shortly, the objective is the facilitation of business decisions. Why?

Types of research PURE expand the limits of knowledge not aimed at solving a specific pragmatic problem theory development APPLIED aimed at solving a specific pragmatic problem “action research” is one type Business research falls into which category. Applied. Why? Because it is geared towards facilitating business decisions. That implies action, or problem solving, not just knowing to know. Give some examples of pure research that ultimately is applied. Psychological research on compliance behaviour. Conclusions used by organizations and military to shape behaviour. Research done on cognitive processing of moral decisions used by police interviewing suspects MORE Therefore pure research isn’t just ivory tower musings; it leads to application just not necessarily right away. In this course we are focusing on applied research

Applications identifying problems or opportunities diagnosis and assessment selecting and implementing a course of action evaluating a course of action Evaluation Performance monitoring So… why do research identifying problems or opportunities: new product, new markets, motivation, taxation Something is wrong. Casino Lethbridge and absenteeism; students’ grade appeals, adoption disruption, what services should we provide our clients (young moms) Course of action: should we offer AA type self help groups or professionally facilitated groups; should we use Simply Accounting or ACPAC, IBM or Mac? Evaluation of a course of action: what do students think about the changes in the program structure? Have sales gone up or down since we raised the price on Cheerios

Research isn’t always the answer! Before doing research consider the following: time constraints availability of data nature of the decision has the decision already been made? does the cost outweigh the benefit? Know this (hint) Just because it can be done doesn’t mean it should be Time: is there time to do research before the competition owns the market segment; will the program (young moms) be shut down before we can evaluate how best to implement changes Availability of Data: adoption disruption, research into motivation of illiterate introverts, or is the information already out there in secondary Nature of the decision: Is this a critical decision that requires input from all the stakeholders? Is it a minor decision? Already been made. Government experience of this Cost and benefit: research is expensive. OPTION: Break class one here and go to cookies

Nature of truth knowledge is socially constructed

Sources of Knowledge Experience Authority but may not be systematic may not be universal Authority custom tradition but how does authority know?

Francis Bacon

SOURCES OF KNOWLEDGE Experience Authority Deductive Reasoning Inductive Reasoning

SOURCES OF KNOWLEDGE Scientific Method Experience Authority Deductive Reasoning Inductive Reasoning Scientific Method inductive - deductive

Theory Formulation Deductive Reasoning Subject to error! The logical process of deriving a conclusion from a known premise or something known to be true. We know that all managers are human beings. If we also know that John Smith is a manager, then we can deduce that John Smith is a human being. Subject to error! Assumes premise is correct

Inductive Reasoning The logical process of establishing a general proposition on the basis of observation of particular facts. All managers that have ever been seen are human beings; therefore all managers are human beings. Subject to error too!

THE SCIENTIFIC APPROACH

THEORY is a system for explaining a set of phenomena by specifying constructs and the laws that relate these constructs to each other.

Purpose of Theories to summarize and organize existing knowledge to explain observed events and relationships to predict the occurrence of unobserved events and relationships to stimulate further inquiry identifying areas providing leads

What makes a good theory? Validity It fits the facts Generalization Makes predictions about future or other events Replication It can be repeated with similar findings

Constructs In management we often use concepts or constructs as variables examples: leadership social responsibility GNP agency honesty efficiency But what do these mean?

Abstraction Concepts abstract reality Are expressed in words that refer to various events or objects Vary in degree of abstraction Research operates at abstract and empirical level linking concepts together as we begin the journey to construct theory.

Propositions Concepts are the basic building blocks Propositions propose the linkages between these concepts Level of abstraction theory propositions concepts

From proposition to hypothesis Concept A: Punishment Concept B: Attendance Abstract Level Yelling at students Increases attendance by 50% Emperical Level Hypothesis

A hypothesis is a proposition that is empirically testable A hypothesis is a proposition that is empirically testable. It is an empirical statement concerned with the relationship among variables. A variable is anything that… varies! Make sure that you define, or operationalize all your variables… an operational definition Null hypothesis

What makes a good hypothesis? precise specifies variables to measure specifies relationships between variables

A poor hypothesis Students spend too much money on fast food.

A better hypothesis Students with incomes of less than 10,000 per year spend a higher proportion of their income in fast food restaurants than the established mean for the general population.