BBA RESEARCH METHODOLOGY 3
MANAGERIAL VALUE OF BUSINESS RESEARCH
DECISION IN BUSINESS RSEARCH
We have argued that research facilitates effective management. At the Ford Motor Company a marketing manager stated, “Research is fundamental to everything we do, so much so that we hardly make any significant decision without the benefit of some kind of market research. The risks are too big.” Managers in other functional areas have similar beliefs about research in their specialties.
The prime managerial value of business research is that it reduces uncertainty by providing information that improves the decision-making process. The decision making process associated with the development and implementation of a strategy involves three interrelated stages.
1. Identifying problems or opportunities
2. Selecting and implementing a course of action
3. Evaluating the course of action
Business research, by supplying managers with pertinent information, may play an important role by reducing managerial uncertainty in each of these stages. Identifying Problems or Opportunities Before any strategy can be developed, an organization must determine where it wants to go and how it will get there.
Business research can help managers plan strategies by determining the nature of situations by identifying the existence of problems or opportunities present in the organization.
Business research may be used as a diagnostic activity to provide information about what is occurring within an organization or in its environment. The mere description of some social or economic activity may familiarize managers with organizational and environmental occurrences and help them understand a situation. For example, the description of the dividend history of stocks in an industry may point to an attractive investment opportunity. Information supplied by business research may also indicate problems.
For example, employee interviews undertaken to delineate the dimensions of an airline reservation clerk’s job may reveal that reservation clerks emphasize competence in issuing tickets over courtesy and friendliness in customer contact.
Once business research indicates a problem, managers may feel that the alternatives are clear enough to make a decision based on experience or intuition, or they may decide that more business research is needed to generate additional information for a better understanding of the situation. Whether an organization recognizes a problem or gains insight into a potential opportunity, an important aspect of business research is its provision of information that identifies or clarifies alternative courses of action.
Selecting and implementing a course of action After the alternative courses of action have been identified, business research is often conducted to obtain specific information that will aid in evaluating the alternatives and in selecting the best course of action. For example, suppose a facsimile (fax) machine manufacturer must decide to build a factory either in Japan or in Sough Korea. In such 8 a case, business research can be designed to supply the exact information necessary to determine which course of action is best of the organization.
Opportunities may be evaluated through the use of various performance criteria. For example, estimates of market potential allow managers to evaluate the revenue that will be generated by each of the possible opportunities. A good forecast supplied by business researchers is among the most useful pieces of planning information a manager can have. Of course, complete accuracy in forecasting the future is not possible because change is constantly occurring in the business environment. Nevertheless, objective information generated by business research to forecast environmental occurrences may be the foundation for selecting a particular course of action.
Clearly, the best plan is likely to result in failure if it is not properly implemented. Business research may be conducted with the people who will be affected by a pending decision to indicate the specific tactics required to implement that course of action.
Evaluating course of action
After a course of action has been implemented, business research may serve as a tool to inform managers whether planned activities were properly executed and whether they accomplished what they were expected to accomplish. In other words, business research may be conducted to provide feedback for evaluation and control of strategies and tactics.
Evaluation research is the formal, objective measurement and appraisal of the extent to which a given action, activity, or program has achieved its objectives. In addition to measuring the extent to which completed programs achieved their objectives or to which continuing 9 programs are presently performing as projected, evaluation research may provide information about the major factor influencing the observed performance levels. In addition to business organization, nonprofit organization, such as agencies of the federal government, frequently conduct evaluation research.
It is estimated that every year more than, 1,000 federal evaluation studies are undertaken to systematically assess the effects of public programs. For example, the General Accounting Office has been responsible for measuring outcomes of the Employment Opportunity Act, the Head Start program, and the Job Corps program. Performance-monitoring research is a term used to describe a specific type of evaluation research that regularly, perhaps, routinely, provides feedback for the evaluation and control of recurring business activity.
For example, most firms continuously monitor wholesale and retail activity to ensure early detection of sales declines and other anomalies. In the grocery and retail drug industries, sales research may use the universal product code (UPC) for packages, together with computerized cash registers and electronic scanners at checkout counters, to provide valuable market share information to store and brand managers interested in the retail sales volume of specific product. United Airlines’ Omnibus in-flight surveys provide a good example of performance monitoring research. United routinely selects sample flights and administers questionnaire about in-flight service, food and other aspects of air travel. The Omnibus survey is conducted quarterly to determine who is flying and for what reasons. It enables United to track demographic changes and to monitor customer ratings of its services on a continuing basis, allowing the airline to gather vast amounts of information at low cost. The information relating to customer reaction to services can be compared over time. For example, suppose United 10 decided to change its menu for in-flight meals. The results of the Omnibus survey might indicate that shortly after the menu changed, the customers’ rating of the airline’s food declined.
Such information would be extremely valuable, as it would allow management to quickly spot similar trends among passengers in other aspects of air travel, such as airport lounges, gate-line waits, or cabin cleanliness, Thus managerial action to remedy problems could be rapidly taken. When analysis of performance indicated that all is not going as planned, business research may be required to explain why something “went wrong.” Detailed information about specific mistakes or failures is frequently sought. If a general problem area is identified, breaking down industry sales volume and a firm’s sales volume into different geographic areas may provide an explanation of specific problems, and exploring these problems in greater depth may indicate which managerial judgments were erroneous.