Business scientists are empiricists: they base the conclusions on empirical research.
Consume existing research = read published research applicable to your problem
Produce research = conduct a new research study yourself
Delegate research = bring in a 3rd party to carry out a research study for you
Why managers’ intuition is often wrong →
Cognitive biases = unconscious thinking errors.
= An attempt of our brain to simplify the complex world and speed up decision-making.
3 most common cognitive biases:
1. Confirmation bias
= the tendency only to consider information that agrees with (‘’confirms’’) our pre-existing
beliefs. We look for only the evidence that supports what we are already thinking and
disregard the rest.
2. Availability bias
= making decisions based on readily available information, even though it may not be the
best information to inform our decision.
Information that is more easily recalled (more available because it is more recent/vivid) is
assumed to reflect more frequent and more probable events, while information that is more
difficult to recall (less available, because less recent/vivid) is assumed to reflect less frequent
and less probable events. The availability bias leads us to overestimate events.
3. What-You-See-Is-All-There-Is (bias)
= When evaluating whether there is a relationship between an event and an outcome, we
tend to notice what is ‘’present’’, and forget to consider what is ‘’absent’’.
How to evaluate research evidence
- Follow an evidence-based approach to decision-making.
- Base decisions on empirical evidence → research studies.
1. Judging academic-journal quality
There are predatory and legitimate articles.
Evaluating if a journal is worthy of being considered:
- Check whether the articles in the journal are peer-reviewed. If not, it is probably predatory.
- Look up the impact factor. If it is at least 1.0, the journal is less likely to be predatory.
2. Judging article quality within peer-reviewed journals
1
, 3. Judging popular-press articles
The stages of the research process
1. Inductive research approach = FIRST collect data. NEXT try to find a pattern in these data.
AFTER develop a theoretical framework based on this pattern.
2. Deductive research approach = FIRST hypothesize relationships between variables based on
theory. THEN test hypotheses by using data.
The 7-step deductive research process:
2
,Online Learning Module 2
Step 1: Demarcating a business problem
= Narrowing/demarcating a business problem before it can be researched.
Problem relevance
- Following, a business problem must only be researched if it is also relevant:
1. Academic relevance
- Can the study contribute to the literature? (Answer is not already out there in prior
research studies).
- Some ways in which a study can contribute to the academic literature:
a. A new topic
= The topic has not been studied before. Besides, you should also point out the
importance of the topic.
b. A new context
= Prior research exists but in a different context.
The essence of contributing by studying a new context lies in the re-evaluation of the
bedrock of the conceptual model itself.
c. Integrate scattered findings
= Knowledge is scattered across multiple articles within the same discipline or across
disciplines (e.g., SCM, operations research, and marketing)
d. Reconcile conflicting findings
= The main-effect relationship may have been studied before, but the moderators may
still be unknown.
Introducing moderators is particularly interesting when they might explain why prior
studies reported contradictory main-effect findings.
2. Managerial relevance
- Someone should benefit from having the problem researched and its results.
- Set of companies (suppliers, retailers, high-tech companies, banks) and/or society at large
(the government, consumers, NGOs)
Step 2: Formulate research questions
The central question/problem statement
A good problem statement is:
- An open-ended question,
- that identifies the study’s unit of analysis, and
- that is expressed in terms of (i) variables and (ii) relationships.
→
Unit of analysis
= Entity that the study wishes to say something about; the focus of the study.
- Subjects = entities being studied.
- This can be on a lower or higher level of aggregation.
- Example: students (only focusing on individual student), noise of different lecture halls
(collective group of students in each hall), average exam grade between universities
(university).
3
, 1. The problem statement: expressed in terms of variables
- Variables must have at least two values/levels in a study.
(e.g.)
- Important characteristic of a variable is that it varies. It can vary in three ways:
a. Across subjects
- Variables can vary across subjects (e.g., persons, products, firms, industries, countries, …) at
the same point in time.
b. Over time
- Variables can vary over time, within the same subject.
c. Across subjects and over time
- Constant = when something that could potentially vary only has one level in the study.
- Example: study on the relationship between intangible assets and firm profitability for
publicly-listed firms.
2. The problem statement: expressed in terms of relationships
- A problem statement expresses the relationship between at least two variables.
- Examples:
a. SIMPLE: How is package size related to young children’s consumption of sweets?
b. SOMEWHAT MORE ELABORATE: How are package size, package shape, and package
colour related to young children’s consumption of sweets?
c. INCREASE READABILITY: How are (i) package size, (ii) package shape, and (iii) package
colour related to young children’s consumption of sweets?
- Moderating effect = the third variable, on which the relationship between two variables
depends.
= The conditions under which variable X is related to variable Y.
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