Chapter 1 RESEARCH FOUNDATIONS & FUNDAMENTALS Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-1 Learning Objectives Understand . . .  How business research and data analytics complement each other.  The language of professional researchers. Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-2 Business Planning Drives Business Research Organizational Mission Business Goals Business Strategies Business Tactics Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-3 Changes in Business that Influence Research New Research Perspectives Computing Power & Speed Information Overload Factors Battle for Analytical Talent Technological Connectivity Shifting Global Economics Critical Scrutiny of Business Government Intervention Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-4 Computing Power and Speed Lower-cost Data Collection Integration of Data Better Visualization Tools Factors Real-time Access Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. Powerful Computation 1-5 Where Business Collects Information Transactions Conversations Observations Sources Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-6 Types of Business Intelligence Government/ Regulatory Competitive Economic Demographic Business Intelligence Technological Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. Cultural/ Social 1-7 1-7 Research vs. Analytics Research Data Analytics  Current-problem  Used to understand focused  Collects new data  Can infuse new with historical data  Can answer “WHY” the past  Looks for patterns in historical data  Can’t answer “WHY” Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-8 Stages in the Business Research Process Clarify Research Question Report Sights & Findings Analyze & Interpret Data Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. Design the Research Collect & Prepare Data 1-9 The Scientific Method Direct observation Clearly defined variables Clearly defined methods Empirically testable Elimination of alternatives Statistical justification Self-correcting process Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-10 Language of Research Concepts Constructs Models Terms used in research Theory Conceptual schemes Operational definitions Variables Hypotheses Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-11 Language of Research Success of Research Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. Clearly conceptualized concepts & constructs Shared understanding of concepts & constructs 1-12 Variable: The Property Studied Act Event Variable Characteristic Trait Attribute Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-13 Types of Variables Dependent Expected to be affected by the independent variable Independent Expected to affect the independent variable Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-14 Synonyms for Independent and Dependent Variable Independent Variable (IV)  Predictor  Presumed cause  Stimulus  Predicted from…  Antecedent  Manipulated Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. Dependent Variable (DV)  Criterion  Presumed effect  Response  Predicted to….  Consequence  Measured outcome 1-15 Types of Variables (cont.) Moderating A second independent variable; significant affect on IV-DV relationship Extraneous Might affect the IV-DV relationship. Intervening May affect IV-DV relationship but can’t be observed. Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-16 Relationships Among Variable Types Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-17 Moderating Variables (MV)  The introduction of a four-day week (IV) will lead to higher productivity (DV), especially among younger workers (MV)  The switch to commission from a salary compensation system (IV) will lead to increased sales (DV) per worker, especially more experienced workers (MV).  The loss of mining jobs (IV) leads to acceptance of higher-risk behaviors to earn a family-supporting income (DV) – particularly among those with a limited education (MV). Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-18 Relationships Among Variable Types Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-19 Intervening Variables (IVV) • The switch to a commission compensation system (IV) will lead to higher sales (DV) by increasing overall compensation (IVV). • A promotion campaign (IV) will increase savings activity (DV), especially when free prizes are offered (MV), but chiefly among smaller savers (EV-control). The results come from enhancing the motivation to save (IVV). Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-20 Relationships Among Variable Types Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-21 Extraneous Variables (EV) With new customers (EV-control), a switch to commission from a salary compensation system (IV) will lead to increased sales productivity (DV) per worker, especially among younger workers (MV). Among residents with less than a high school education (EV-control), the loss of jobs (IV) leads to high-risk behaviors (DV), especially due to the proximity a high violence neighborhood (MV). Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-22 Hypotheses  Brand Manager Jones (case) has a higher-than- average achievement motivation (variable). Generalization  Brand managers in Company Z (cases) have a higher-than-average achievement motivation (variable). Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-23 Hypothesis Formats Descriptive Format Question format American cities are experiencing budget difficulties due to a decline in manufacturing? experiencing budget difficulties due to a decline in manufacturing. Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. Are American cities 1-24 Types of Hypotheses Descriptive The life expectancy of airplane model 707 exceeds 16 years. Causal An increase in price causes sales to decrease. Correlational People who eat dessert weigh more than those who don’t. Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-25 The Role of Hypotheses Guide the direction of the study Identify relevant facts Suggest the most appropriate research design Provide framework for organizing resulting conclusions Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-26 Reasoning and Hypotheses Inductions are an inferential leap from the evidence presented. = Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-27 Reasoning and Hypotheses Deductions are only as good as the premises on which they are based. = Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-28 Apply Deductive Reasoning Develop your own conclusions concerning what will happen next. Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-29 Inductive Reasoning  Why didn’t sales increase during our promotional event?  Regional retailers did not have sufficient stock to fill customer requests during the promotional period  A strike by employees prevented stock from arriving in time for promotion to be effective  A hurricane closed retail outlets in the region for 10 days during the promotion Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-30 Why Didn’t Sales Increase? Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-31 Deductive Reasoning Inner-city household interviewing is especially difficult and expensive This survey involves substantial inner-city household interviewing The interviewing in this survey ….? Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-32 Checklist for a Strong Hypothesis Adequate A Strong Hypothesis Testable Better than rivals Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-33 Theory Defines systematically integrated concepts/constructs/hypotheses Complex, abstract, multiple variables Develops over time Used to explain or predict Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-34 Theory Example: Product Life Cycle Sales Primary Demand Innovation Product Life Cycle Profits Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. Adopters 1-35 Model within Research Visualization of a system or theory Used to represent or describe Changes as the theory changes. Can represent present or future conditions. Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-36 Example: PLC Model Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 1-37 Key Terms  Business research  Concept  Conceptual scheme  Construct  Data blending  Deduction  Hypothesis Causal  Correlational  Descriptive  Relational  Induction  Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved.  Model  Operational definition  Reasoning  Theory  Variable Control (CV)  Confounding (CFV)  Dependent (DV)  Extraneous (EV)  Independent (IV)  Intervening (IVV)  Moderating (MV)  1-38 
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