MGMT 600 – Allen Bellas Week 1
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Management 600: Practical Research Methods for Managers
A thousand expert opinions are not worth the careful observations of a single person.
Week 1 – Allen Bellas
Chapters 1, 2 and 16
Basic vs. Applied Research
The discussion presented here is taken from the Lawrence Berkeley National Laboratory
web site. (http://www.lbl.gov/Education/ELSI/research-main.html)
1. Basic Research
Basic (aka fundamental or pure ) research is driven by a scientist's curiosity or interest in
a scientific question. The main motivation is to expand man's knowledge , not to create or
invent something. There is no obvious commercial value to the discoveries that result
from basic research.
For example, basic science investigations probe for answers to questions such as:
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How did the universe begin?
What are protons, neutrons, and electrons composed of?
How do slime molds reproduce?
What is the specific genetic code of the fruit fly?
Most scientists believe that a basic, fundamental understanding of all branches of science
is needed in order for progress to take place. In other words, basic research lays down the
foundation for the applied science that follows. If basic work is done first, then applied
spin-offs often eventually result from this research. As Dr. George Smoot of LBNL says,
"People cannot foresee the future well enough to predict what's going to develop from
basic research. If we only did applied research, we would still be making better spears."
2. Applied Research
Applied research is designed to solve practical problems of the modern world, rather than
to aqcquire knowledge for knowledge's sake. One might say that the goal of the applied
scientist is to improve the human condition .
For example, applied researchers may investigate ways to:
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improve agricultural crop production
treat or cure a specific disease
improve the energy efficiency of homes, offices, or modes of transportation
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Some scientists feel that the time has come for a shift in emphasis away from purely
basic research and toward applied science. This trend, they feel, is necessitated by the
problems resulting from global overpopulation, pollution, and the overuse of the earth's
natural resources.
As you might guess, most research done in business or done by government agencies or
non-profits whose business is not pure research itself, is applied research. As such, it is
important that the underlying question that drives the research has been well thought out
and that the eventual responses based on the outcomes from this research have been
considered. To put this concisely:
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you need to know why you’re doing the research
you need to know how you’re going to react to all possible outcomes from the
research
Business Research and Decision Making
The most practical use of research is to guide decision making. Ideally, decisions would
be based on data and correct analysis of that data, to the extent possible.
If you need a definition of business research, here’s the one from the book:
Business research is systematic, controlled, empirical and critical investigations of
phenomena of interest to managerial decision makers.
Basically, it is any careful analysis intended to generate results that will be of importance
in management decisions. It may be a case of not being able to define it, but recognizing
it when you see it.
Levels of decision making
The book distinguishes between three levels of decisions: strategic, tactical and
technical. I will expand slightly upon the book’s presentation.
1. Strategic
Strategic decisions are big decisions that are made infrequently and are not easily
reversed. In a military sense, a strategic decision guides where you will put your troops.
2. Tactical
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Tactical decisions are smaller decisions about how a strategy will be implemented and
may be reversed without too much difficulty. In a military sense, a tactical decision
guides what troops do once they are in place.
3. Technical
Technical decisions are small decisions about details of operations and may be reversed
without too much difficulty. In a military sense, a technical decision guides the everyday
activities of the troops to maintain their efficiency and effectiveness.
Decision making process
The book breaks the decision making process into several steps.
1. Recognition of a problem or an opportunity
Basically, this is when you recognize that some sort of decision needs to be made. This
can happen in any of about a million different ways. This might also be termed
opportunity recognition, when some decision must be made about the best way to take
advantage of an opportunity, once that opportunity is recognized.
2. Information search
If a decision about the problem or opportunity is to be based on data, then some data or
information must be identified and obtained. Some thought should be put into the
question of what information will be needed to guide the decision and, to this end, some
pre-identification of possible options would be helpful. The information should be
organized into a format that will be conducive to answering the question at hand, poor or
poorly organized data may be worse than no data at all.
It is possible that the information search will reveal new or different problems or
opportunities, taking you back to step 1.
3. Problem analysis
Once the problem or opportunity is identified and the necessary information is obtained,
it is time to do the relevant analysis. We’ll talk more about this over this course.
It is possible that the analysis will reveal either that the data are flawed or inappropriate
to the question at hand, taking you back to step 2, or that the analysis will introduce new
problems or opportunities, taking you back to step 1.
4. Alternative evaluation
This part is hard. This is where you look at the analysis and, maybe, have some great
insight about an option for action that no one had considered before. Maybe the analysis
will guide this great insight, and maybe it won’t. This might be a sort of a zen thing, and
not easy to talk about in a research class, but a starting point might be to consider
inaction. Another starting point might be to consider whether the results of the research
will actually matter at all.
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A Law Enforcement Example
A law enforcement agency was considering some analysis of traffic stops to determine if
there was evidence of racial profiling among its officers. However, they realized that in
spite of what the analysis yielded as far as quantitative results, they would probably
implement some sort of racial sensitivity training for their officers, so they skipped the
analysis and simply implemented the training that they knew they’d have to do anyway.
5. Decision
Then you make the decision about what to do. You should recognize that any technical
or tactical decision might be reversed somewhat easily at some point in the future. On
the other hand, once you make a strategic decision you really can’t reverse it at low cost.
The Manager-Researcher Relationship
A basic concept in economics is the principal-agent problem, which occurs when a
business owner (the principal) hires a person (the agent) to do something. The principal
would like the agent to act in the principal’s best interest, but the agent will act in the
agent’s best interest. This is a problem whenever a principal hires an agent, but there are
a few issues that are particularly important when dealing with hiring a researcher.
The first is that the researcher is an expert, and will have some information that the
manager who hires her will not have. As such, the manager will be incapable of
completely evaluating the work done by the researcher as being of high quality or as
being of low quality. To try and get around this, the best approach by the manager may
be to insist that, at the very least, the techniques used and the basis for the conclusions
should be explained as clearly and comprehensibly as possible. It would also help if a
manager knew something about research.
The second is that the manager will want immediate answers with the information that is
most easily available. What the researcher will want to provide will probably depend on
how the researcher is to be compensated. Regular contact between the manager and the
researcher and a willingness to be flexible are important.
Two documents are important in the manager-researcher relationship. The first is the
research proposal, which outlines the problem (or opportunity) to be addressed and the
plan to address it. If a research proposal were to follow a standard format (which isn’t
necessarily the case) it might go like this:
a. underlying question, problem or opportunity
b. the analytical approach that will be taken
c. the data to be used in the analysis
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d. a statement of the results of the analysis
e. recommendations to the manager based on the results
f. a brief conclusion restating the major points of the report
In considering a research proposal, you should refer back to the five steps in the decision
making process and understand that a research proposal is likely to have nothing to do
with the process as it is eventually done, but should rather serve to anchor the question
that will be addressed, regardless of what approach is eventually taken.
The second document is the research report. The content of the final report might bear
little resemblance to the original proposal, but its format should resemble that presented
above.
Finally, a researcher would ideally be independent. That is, a researcher should present
conclusions based on her best understanding of the situation and appropriate analysis of
the data. The researcher’s compensation should be independent of the results of the
analysis and of the actions taken as a result. This issue can be as big as Enron or as small
as wanting two different people to be your personal financial advisor and broker. If a
company has in-house analysis, that area should be separate from everyone else. They
should have their own lunchroom and stuff.
Information, Research and Knowledge Management
Knowledge is an input into production, as are labor, office space, computers, capital and
inventories. Labor needs to be properly managed in order to assure that it is used in the
most valuable way. Office space needs to be managed so that it is used as efficiently as
possible. Computers, capital and inventories must also be managed to be sure that they
are used in a way that maximizes their value.
Knowledge management is the practice of managing knowledge (and its foundations) to
maximize its value to an organization. Simply having lots of knowledge lying around is
no better than simply having lots of people, office space or computers. If these things are
not managed effectively and used efficiently they may be of little or no value. If,
however, these things are managed well they can be of tremendous value.
Knowledge management should focus on how data is obtained, how the resulting
information is maintained and made available to managers within the organization, and
how this information is transformed into changes in policies and actions.
Just as human resource management becomes more important and more difficult as the
number of employees rises, as an organization gets more and more data, knowledge
management becomes more complicated and more important. Perhaps the greatest
contribution of business research is to assure that people who make decisions get the
information that they need in the form that they need it and are not buried under an
avalanche of data.
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Ethical Considerations in Business Research
Why ethics?
I’ll offer several reasons, which you are free to accept or reject.
First, ethical practices should be observed for the good of research in general. Social
research requires the participation of the public. To the extent that participation would be
reduced if people hold the impression that the research in which they would participate
might be unethically conducted or used, ethical practices help to assure that people will
continue to participate. Unethical research will reduce the public’s participation and will
erode the value of any research that can be done.
Second, ethical behavior is right. Unethical behavior is wrong. There should be some
value in this. More importantly, while you might have a good idea of what is right and
wrong in your everyday life, the issue of what is right and wrong in research might be
unfamiliar to you and it is easier to learn it here than in practice.
Each party and its rights
1. Society
Social research is conducted within society. This is sort of like them operating in your
house. As such, society has some rights regarding the research done within its house.
- the right to know about important results
- the right to expect objective analysis and conclusions
- the right to privacy
2. Subjects
Subjects are the people that provide the actual data in social research. Without subjects,
and if you don’t respect their rights you will have no subjects, research will be
impossible. In fact, potential subjects are already becoming less and less willing to
participate, especially in phone surveys. These used to be a preferred method of doing
surveys, but they are becoming less and less reliable.
- the right to know that data are being collected and that they might be used
- the right to make an informed choice as to whether or not to participate – informed
consent
- the choice to end participation at any time
- the right to be free of stress or deception. Yes, this will preclude some studies.
- the right of anonymity
- the right to be informed of the results of this research
3. Clients
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Clients are the individuals who hire researchers to do research for them. They have rights
that we would like to believe exist for anyone who hires experts. Indeed, having some
level of expertise in research techniques helps to assure that clients’ rights will be
respected.
- the right of confidentiality of any proprietary information
- the right of anonymity
- the right to not have expert researchers do unnecessary research, like with patients
- the right to have qualified researchers
- the right to comprehensible research reports appropriate to the decisions to be made
4. Researchers
Researchers are the experts that people hire to do research for them. Believe it or not,
they have rights, too.
- the right to not have their research and results misrepresented
- the right to have proprietary techniques and practices preserved
- the right to expect truthful responses from subjects, to the extent possible
With a lot of research, the devil lies in the details. Responses to a question can vary
dramatically depending on how the question is asked. The best answer to questions of
ethics in light of this fact is for researchers to be clear about the details of how research
was conducted. Transparency is generally very ethical.
Tying Ideas Together – Chapter 2 and Chapter 16
Chapter 2 includes the case of Safeway hiring IBM to do data mining for them. The data
that IBM analyzed was data from scanners that note what each person who came in
bought. The question is, is this business research ethical? That is, according to the
discussion in Chapter 16 and based on the details presented in the Exhibit 2.2, is the
business research that Safeway and IBM engaged in ethical, and why or why not?