Brady Shiplet

Midterm

1. The hierarchy of business decision makers categorizes organizations based on how they use
business research to make decisions.

List and explain the three levels in the hierarchy.

The hierarchy has three levels

a. Top Tier – Visionaries

i. Every decision guided by business research
ii. Firms develop proprietary methodologies and are innovative in their
combination of methodologies.
iii. Enterprise-wide access to research data and findings
b. Middle Tier – Standardized Decision Makers
i. Some decisions based on business research
ii. Firms use tried-and-true methods excluding others that might be appropriate.
iii. Limited enterprise-wide data and findings
c. Base Tier – Intuitive Decision Makers
i. Most decisions based on past experiences or instincts.
ii. Decisions supported by limited qualitative research

In the top tier, organizations see research as the fundamental first step in any venture. They go beyond
the tried-and-true methodologies and use creative combinations of research techniques to gain deep
insights to aid in their sophisticated decision making.

These visionary managers can be found in research firms, service firms, nonprofits, and product and
service manufacturers and distributors. Implementation and activation of the research are the critical
stages of decision makers in this tier

In the second tier are those decision makers that rely periodically on research information. They usually
turn to business research primarily when they perceive the risk of a particular strategy or tactic to be
too great to proceed without it. They have realized that failing to collect information prior to decision
making or failing to extract insight from information that has been collected in their DSS puts them at a
distinct competitive disadvantage.

The base tier comprises those managers who primarily use instinct and intuition rather than research
knowledge to facilitate their decisions. When they do collect information, they use a limited amount of
qualitative research, often in the form of an informal group discussion or small number of individual
interviews, to confirm their ideas.

The trends of the past two decades, especially the technology that has been driving research
methodologies of data collection and dissemination, make it likely that managers who do not prepare to
advance up the hierarchy will be at a severe competitive disadvantage.

2. Explain the essential tenets of the scientific method and why this method is important for
business research.

1. Purpose clearly defined.

- Research distinguishes between symptom of organization’s problem, the manager’s

perception of the problem, and the research problem.

2. Research process detailed

- The researcher provides a complete research proposal.

3. Research design thoroughly planned.

- Exploratory procedures are outlined with constructs defined.

- Sample unit is clearly defined along with the sampling methodology.

- Data collection procedures are selected and designed.

4. High ethical standards applied.

- Safeguards are in place to protect study participants, organizations, clients, and

researchers.

- Recommendations do not exceed the scope of the scope of the study.

- The study’s methods and limitations sections reflect the researcher’s restraint and
concern for accuracy.
5. Limitations frankly revealed.

- Desired procedure is compared with actual procedure in report.

- Desired sample is compared with actual sample in report.

- Impact on findings and conclusions are finely detailed.

6. Adequate analysis for decision maker’s needs.

- Sufficiently detailed findings are tied to collection instruments.

7. Findings presented unambiguously.

- Findings are clearly presented in words, tables, and graphs.

- Findings are logically organized to facilitate reaching a decision about the manager’s
problem.

- Executive summary of conclusion is outlined.

- Detailed table of contents is tied to the conclusions and findings.

8. Conclusions justified.

- Decision-based conclusions are matched with detailed findings.

9. Researcher’s experience rejected.

- Researcher provides experience/credentials with report.

3. Explain the meaning of deduction and induction. Provide an argument that exemplifies each
form.

Deduction is a form of argument that purports to be conclusive-the conclusion must necessarily follow
from the given reasons. These reasons are said to imply the conclusion and represent a proof. A
deduction is valid if it is impossible to for the conclusion to be false if the premises are true.

Example of a true deduction argument:

Premise 1: Inner-city interviewing is difficult and expensive.

Premise 2: This survey involves a large amount of inner-city interviewing

Conclusion: The interviewing in this survey will be especially difficult and expensive.

In induction you draw a conclusion from one or more particular facts or pieces of evidence. The
conclusion explains the facts, and the facts support the conclusion.

Fact: Sales did not increase during or after the promotional campaign.

Conclusion: The campaign was poorly executed.

This conclusion is an induction because we know from experience that regional sales should go up
during a promotional event.

4. The exploratory research phase of a research project allows a researcher to accomplish several
objectives. Name three of the objectives common to this stage.

1. Expand your understanding of the management dilemma by looking for ways others have addressed
and/or solved the problem similar to your management dilemma or management question.

2. Gather background information on your topic to refine the research question.

3. Identify information that should be gathered to formulate investigative questions.

5. What are the three types of budgets in organizations where research is purchased and cost
containment is crucial? List and describe each one. Is one more desirable than the others?
Explain.

1. Rule-of-thumb budgeting: involves taking a fixed percentage of some criterion.

2. Departmental or functional area budgeting: allocates a portion of total expenditures in the unit to
research activities.
3. Task Budgeting: selects specific research projects to support on an ad hoc basis. This type is the least
proactive but does permit definitive cost-benefit analysis.

Managers must determine which type of budget is desirable for their specific firm’s needs.

6. (a) List and explain the general components included in RFPs.

1. Proposal administration information: overview of important information on the administration

of the project itself.
2. Summary statement of the problem: often takes form of a letter introducing the organization
that issued the RFP and explaining its needs.
3. Technical Section: Technical information needed by the supplier to create the proposal is in this
section.
4. Management section: Each project requires some level of management such as schedules, plans,
and reports.
5. Contracts and license section: The types of contract the supplier is expected to sign and
includes any nondisclosure agreements.
6. Pricing section: To cost the proposal, the suppliers must receive all needed information.

(b) Three modifications to the RFP may be used depending on the sponsoring organization's
specific situation. List and describe when an organization would use these modifications.

1. Exploratory studies: Most simple research study

2. Small-scale studies: can be an internal or external study. More complex than exploratory an most
common in business.

3. Large-scale studies: Most complex and usually worth millions of dollars. Usually used by the
government.

7. What are the seven basic principles of the U.S. Safe Harbor Agreement? List each principle
and explain what it means for companies seeking to adhere to the agreement.
The convenience of collecting data online has created new ethical issues.

Data mining offers infinite possibilities for research abuse. The primary ethical data mining issues in
cyberspace are privacy-related including consent to information collection and control of information
dissemination. Legitimate data miners publicly post their information security policies.

The EU countries have passed the European Commission’s data protection directive. Under the
directive, commissioners can prosecute companies and block Web sites that fail to live up to its strict
privacy standards.

Exhibit 2-3 identifies the seven basic principle that companies must comply with to be granted
immunity from legal action under the EU’s directive. These seven principles are:

• Notice: Companies must notify consumers/participants about what information is being

collected, how that information will be used, who that information will be shared with, and how
individuals can contact the organization with inquiries or complaints.
• Choice: Consumers/participants must be provided with an opt-out mechanism for any
secondary uses of data and for disclosures to third parties. For sensitive information,
participants must opt in before providing data that will be shared.
• Access: Individuals must have access to personal information that the organization holds and be
able to correct, amend, or delete information where it is in accurate, except where the burden or
expense of providing access would be disproportionate to the risks to the individual’s privacy.
• Security: Organizations must take reasonable precautions to protect personal information from
loss, misuse, and unauthorized access, disclosure, alteration, and destruction.
• Onward transfer: Companies disclosing personal data to a third party must adhere to the
notice and choice principles. A third party must subscribe to the safe-harbor principles.
• Data integrity: Reasonable steps must be taken to ensure that data collected are reliable,
accurate, complete, and current.
• Enforcement: Companies must ensure there are readily available and affordable independent
mechanisms to investigate consumer complaints.

8. Explain the difference between a field setting, laboratory setting, and simulation.

Research design differs as to whether they occur under actual environmental conditions. Field
conditions mean that the research occurs in the actual environmental conditions where the dependent
variable occurs. Under laboratory conditions, the studies occur under conditions that do not simulate
actual environmental conditions. In a simulation, the study environment seeks to replicate the natural
environment in a controlled situation. For instance, a lab set up as a kitchen would serve as a simulation
of a consumer’s own kitchen.

9. What is an asymmetrical relationship? List and explain the four types of asymmetrical
relationships that a research may observe.

People without scientific training may think that a correlation is causation. However, just because two
things change together does not imply a cause-and-effect relationship. The essential element of
causation is that some external factor produces a change in the dependent variable: A produces B.
Empirically, we never demonstrate causality with certainty because we do not prove causal linkages
deductively. Empirical research conclusions are based on inferences or inductive conclusions. These
conclusions are probability statements, based on what we observe and measure and what we conclude
is likely to happen.

There are three possible relationships that can occur between two variables. These are named in the
slide. A symmetrical relationship is one in which two variables vary together but we assume the
changes in neither variables are due to changes in the other.

A reciprocal relationship exists when two variables mutually influence or reinforce each other.

With asymmetrical relationships, we postulate that changes in one variable (independent variable) are
responsible for changes in another (dependent variable). The four types of asymmetrical causal
relationships.

• A stimulus-response relationship refers to an event or change that results in a response from

some object. An example is a change in commission structure that leads to a higher level of
agent sales.
• A property-disposition relationship refers to an existing property that causes a disposition. An
example is the relationship between age and attitudes about saving.
• A disposition-behavior relationship refers to a disposition that causes a specific behavior. An
example is the relationship between moral values and shoplifting.
• A property-behavior relationship refers to an existing property that causes a specific
behavior. An example is the relationship between age and sports participation.
10. a) Explain the five steps in conducting a literature search.

Generally, the exploration phase will begin with a literature search. A literature search is a review of
books, journal articles, and professional literature that relate to the management dilemma. This may
also include Web-published material. The five steps to a literature search are:

1. Define the management dilemma

2. Consult books for relevant terms
3. Use terms to search
4. Locate/review secondary sources
5. Evaluate value of each source and content

The result of a literature search could be a solution to the management dilemma. If so, no further
research is necessary. Otherwise, a research proposal is generated.

(b) What are the three levels of information? Provide examples for each level.

Information sources are categorized into three levels.

Primary sources are original works of research or raw data without interpretation or pronouncements
that represent an official opinion or position. Ex. Memos.

Secondary sources are interpretations of primary data. A firm searching for secondary sources can
search either internally or externally. Ex. Textbooks

Tertiary sources are aids to discover primary or secondary sources or an interpretation of a secondary
source. Ex. Internet

(c) What are the five factors a manager should consider when evaluating an information source?
Explain each one.

A researcher using secondary sources will want to conduct a source evaluation. Marketers should
evaluate and select information sources based on five factors.
 o Purpose is the explicit or hidden agenda of the information source.
o Scope is the breadth or depth of topic coverage, including time period, geographic
limitations, and the criteria for information inclusion.
o Authority is the level of the data (primary, secondary, tertiary) and the credentials of
the source author.
o Audience refers to the characteristics and background of the people or groups for whom
the source was created.
o Format refers to how the information is presented and the degree of ease in locating
specific information within the source.

11. How can researchers increase the confidence business decision makers have in qualitative
data?

Some believe that qualitative data are too subjective and susceptible to human error and bias in data
collection and interpretation. The fact that results cannot be generalized from a qualitative study to a
larger population is considered a fundamental weakness.

Despite these limitations, managers are returning to these techniques as quantitative techniques fall
short of providing the insights needed to make those ever-more-expensive decisions.

Managers must deal with the issue of trustworthiness of qualitative data using the following techniques:

• Using literature searches to build probing questions,

• Justifying the method chosen,
• Using a field setting,
• Choosing sample participants for relevance rather than representation of target population,
• Using questions that will find the exception to the rule,
• Carefully structuring the data analysis,
• Comparing data across multiple sources and contexts,
• And conducting peer-researcher debriefing on results for added clarity, insights, and reduced
bias.

12. Research designs are classified as communication or observation by the approach used to
gather primary data. Identify five conditions under which observation is an appropriate method
for data collection.
Observation is the only method available for gathering certain types of information. Another advantage
is that it can capture the whole event as it occurs in its natural environment. Observation participants
seem to accept an observational intrusion better than they respond to the intrusion of survey takers.
Further, some observation studies are concealed. Here are five conditions under which observation is
an appropriate method for data collection:

• Securing information that is otherwise unavailable

• Avoiding participant filtering/ forgetting
• Securing environmental context
• Optimizing naturalness
• Reducing obtrusiveness