Research Foundations and Fundamentals

Business Research Methods, 13e, Instructor’s Manual Instructor’s Manual
Chapter 1
Research Foundations and Fundamentals
CHAPTER LEARNING OBJECTIVES
After reading this chapter, students should understand…
1 How business research and data analytics complement each other.

2 The language used by professional researchers.
KEY TERMS
Key terms are shown in bold, as they appear in the text, throughout the lecture notes.
POWERPOINT
 A complete PowerPoint slide set comes with this chapter.

o Slides are ordered as the chapter is organized.
o Each, at minimum, contains the following:
o Learning Objectives slide
o Pullquote slide, key thought that opens this chapter
o Exhibit slides, one or more per exhibit
o Additional slides that cover critical concepts not covered by exhibits
o Key Terms slide(s)
o Additional Discussion Opportunities slides: You can arrange these slides within the slide set
as desired. This slide section contains several types of slides; suggestions for using these
slides are in the Discussion and Project Ideas section of this manual. The slides include all or
some of the following:
 Snapshot slides, one for each Snapshot; contains an image or graphic to serve as a
visual anchor for the discussion.
 PicProfile slides, one for each PicProfile; contains the image.
 CloseUp slides, at least one per CloseUp; contains the images or graphs.
 Additional Pullquote from thought leaders, at least one per chapter
 PulsePoint: a statistic drawn from a research project that relates to some chapter
concept.
TEST BANK
The test bank for each chapter contains the following:
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education. 1-1
Chapter 01 – Research Foundations and Fundamentals Business Research Methods 13e
 Multiple-choice or true-false objective questions of one or more types, with answer noted in RED:
o Definition-based questions on key terms and concepts
o Application-based questions posing decision scenarios
o Application-based questions asking for justification or explanation
 Essay Questions, with one possible answer noted in RED.
CONNECT
Connect is the location for several resources:

 Quiz questions
o You select from this additional set of multiple-choice and true-false questions for each chapter to
create a self-assessment quiz for that chapter. Each question provides a pop-up learning note for
the correct answer, that you may opt to show (or not).
 Connect Library for Instructors
o PowerPoint Slide Sets
 Instructors often modify these sets to reflect their own teaching style and pedagogy for a
chapter’s material; you may opt to share these sets (or not) with your students, as presented or
modified.
 Each slide sets contains the graphical exhibits contained in the text.
o Instructor’s Manual for each chapter
o Test Bank for each chapter
o Written and video cases
o Additional Materials Related to Cases (e.g., case discussion notes, data sets, video material, etc.)
o Additional Materials Related to Chapters
o Supplemental appendices on topics you may want to assign related to a chapter.
o Supplemental chapter-related materials
 BRM13e_Top Research firms 2017.pdf
o Sample Student Project
o Excel Chart Templates
 Connect Library for Students
o Written and video cases
o Additional Materials Related to Cases (e.g., data sets, video material, etc.)
o Additional Materials Related to Chapters
o Supplemental appendices on topics.
o Supplemental chapter-related materials
o Sample Student Project
o Excel Chart Templates
SMARTBOOK
This is a, digital version of Business Research Methods, which can be accessed online via laptop. It is linked to
Business Research Methods’s Connect features. The content of Business Research Methods SmartBook is the
same as the printed version of Business Research Methods but the digital features help focus a student’s
learning on particular book content. Students pay for a subscription to Business Research Methods SmartBook
for the duration of your term or semester.
 As the instructor, you may assign Business Research Methods SmartBook or students may choose to
subscribe to SmartBook on their own.
 If you want your students to have access to Business Research Methods SmartBook and its learning
features, you will need to set up your Business Research Methods Connect course.
DISCUSSION AND PROJECT IDEAS
 Snapshots
o Analytics Under Delivers Compared to its Hype…An MIT/Sloan Management Review and SAS
report on data analytics users.
o Big verses Small Data…how big data alone misled Lego and how a small research project
revealed the strategy that pulled it back from near bankruptcy.
o Research on Cyber Security…How Alert Logic used research to discover cyber criminals’ paths.
o Identifying and Defining Concepts…Using presentations from professional business conferences
to show the importance of understanding the language of research.
What are the constructs and the operational definitions for those constructs?
First Paragraph
In the first paragraph of the snapshot, the students should identify the following constructs:
advertising optimization, advertising storytelling, ad blocking
 Advertising optimization might refer to number of people responding to a digital ad by
clicking on the ad, or the sales resulting from the delivery of the correct digital advertising
content to the customer most likely to respond.
 Advertising storytelling might refer to the use of an advertising story—either complete or
installments—to deliver the advertiser’s message.
 Ad blocking might refer to the use by a potential customer of apps or permissions to block the
delivery of an ad. But does it refer to ads never delivered or ads that are blocked after a few
seconds.
Some management problems students might offer include: Increased ad blocking, and lower levels
of ad optimization. You should encourage students to phrase these as undesirable management
results rather than the customer action itself or the industry phrase for the action. Some examples
of what student’s might offer using this different perspective:
 Lower levels of ad recall due to failure to see ads caused by the use of non-storytelling
advertising techniques.
 Lower levels of ad recall due to failure to see ads caused by customer ad blocking.
 Lower prospect-to-customer conversion due to lower levels of ad follow-through (clicks on
ads or web-site visits).
 Lower sales due to lower levels of ad follow-through (clicks on ads or web-site visits).
 Failure to change prospective prospect’s brand image or brand perception based on lower
levels of ad delivery.
Second Paragraph
In the second paragraph of the snapshot, the students should identify several additional of
constructs: digital ad viewability, transparency, trade association, trust.
 Viewability might be how many prospective customers view a digital ad (Google
distinguishes the difference between a digital ad that is served verses one that is viewed; The
Media Ratings Council just adopted the following as an operational definition of a viewable
ad: “50% of an ads pixels are on screen for a minimum of 1 second.” You can see the Google
study at "The Importance of Being Seen: Viewability Insights for Digital marketers and
Publishers," Google, Novebmber 2014, downloaded April 6,2016
https://think.storage.googleapis.com/docs/the-importance-of-being-seen_study.pdf).
Also, Google offers an example of a research infographic at: “Five Factors of Display
Viewability” Google, November 2014, downloaded April 6, 2016
(https://www.thinkwithgoogle.com/infographics/5-factors-of-viewability.html).
 Ad transparency might refer to where an advertiser’s dollars are spent, but this general
observation isn’t sufficient as an operational definition. Transparency is often divided into
two types. One is called financial transparency (how much of an advertiser’s budget is spent
by an advertising agency on media buys, data, technology or account service). But
transparency also relates to operational transparency (where an ad is served and which
metrics an ad optimization algorithm uses).
 Trade associations usually refer to professional groups founded and funded by businesses that
operate in a specific industry. It’s important that the student operational definition specify that
such groups define and set industry standards, perform public relations activities on behalf of
the industry and their members, and do governmental lobbying. Students might see this as a
concept rather than a construct; discourage them. As each trade association has its own
mission and they very widely. Ron Amram, VP-media at Heineken USA, was referring to the
American Association of Advertising Agencies (4As) and American National Advertisers,
both powerful trade associations representing their very different groups.
 Trust is a belief that someone or something is reliable and truthful. But that doesn’t go far
enough for an operational definition. How would you measure someone/something’s
reliability? Truthfulness is the absence of lies. But how do you determine what is a lie?
Someone will check Wikipedia and find “a statement that is known or intended by its source
to be misleading, inaccurate, or false.” But as an operational definition, it doesn’t give you
keys or clues to look for that are measurable. Someone could say ‘inaccuracy’ is determined
by perspective. And truth or falsehood is also a matter of the factors considered. Generating
the answers to these questions should lead to a lively discussion.
Third Paragraph
The key constructs students should identify are compelling advertising, commoditization in
advertising, great advertising, and full value.
 Compelling advertising might refer to advertising that evokes an emotional response from its
audience. But it might equally be advertising that gains attention, wins admiration or an
industry award. Any emotional response is not okay; an operational definition spells out the
acceptable emotional response. Any attention is not okay; the operational definition should
spell out the level of attention and from whom. Any award is not okay; the operational
definition should spell out what award.
 Commoditization might refer to advertising that is like every other advertising for the product
class. So while we can generate commoditized ads for less, as they follow a formula, they
usually fall victim to confusing the customer. For example, how many car ads have you seen
that show a red car driving through a city street while heads turn. You lose the ability to
distinguish the brand of car, let alone the message that brand is trying to deliver. Coming up
with the operational definition of what is a commoditized ad—one that uses the same creative
strategy as another ad in the same product class—might help, but only if the student could
define ‘creative strategy’ and ‘product class’.
 Great advertising might refer to advertising that achieves its response or sales goals or be
advertising that wins a Super Bowl ad competition or advertising that wins a Clio Award.
Remind students that they have to have a consistent way to measure ‘great’.
 Full value might refer to what the advertising agency should be paid based on the worth of the
ad based on its goal achievement, distinctive and memorable production values, creativity or
something else. Full value is a price based on creativity and its success, as opposed to some
standard fee—for example 15% of media buy dollars. Determining the factors that will be
included in the calculation of the value is the exercise for the operational definition.
What is the management problem revealed for advertisers and advertising agencies?
The most important management problems are “How does the advertising agency regain the
advertiser’s trust?” and “How do advertisers and their agencies keep customers from blocking
ads?”
 PicProfiles
o None in this chapter
 CloseUp
o None in this chapter.
 PulsePoint: Published research reveals many ways that businesses use research. You might use such
research findings to discuss a current phase of the research process or a current issue. This PulsePoint
relates to hiring expectations of firms. You might use this finding to stimulate a discussion on how
organizations might use research to track employee behavior on the job.
 34…The percent of employees who never consider what their bosses, clients, or colleagues think
before posting to a blog, discussion forum, or social network.
 Pullquote: Use each chapter’s pullquote to discuss a current issue related to the chapter.
 This quote relates to the difference between data analytics and research. It’s the perfect
opportunity to discuss the importance of each and the pitfalls of relying on only one:
“As big data increases, we see a parallel growth in the need for ‘small data’ to answer the
questions it raises.”
William C. Pink, senior partner
Creative Analytics
 Additional PullQuote; This quote relates to the importance of discovery for its own sake, but also
discovery for a purpose. Anyone who saw the movie Hidden Figures (2016) can understand the
importance of applying established tools in new ways to new data, and using the perspectives of
new individuals to the race for space exploration. The engineers of NASA were attempting
something that had not been done before—a real dilemma—and needed not only visionary
leadership but new hypotheses to accomplish this.
“Research is creating new knowledge.”

Neil Armstrong, Engineer and Astronaut
 Additional Pullquote: The quote below deals with the emergence in key performance indicators to
inform. You can use this quote to discuss the disadvantages facing organizations that do not
invest in research and analytical benchmarking.
 “Forward-thinking executives recognize that analytics may be the only true source of
sustainable advantage since it empowers employees at all levels of an organization with
information to help them make smarter decisions.”
Wayne Eckerson,
director of research, business applications and architecture group,
TechTarget
Source: Wayne Eckerson, “Big Data Analytics: Profiling the Use of Analytical Platforms in User
Organizations,” TechTarget, September 2011, p. 10, accessed March 5, 2012
(http://docs.media.bitpipe.com/io_10x/io_103043/item_486870/Big%20Data
%20AnalyticsMarkLogic.pdf).
 Additional Discussion or Project Ideas

 The photograph related to reasoning shows an individual on a skateboard. Apply deductive and
inductive reasoning to the image to develop conclusions about what will happen in the next photo
frame.
 Show Exhibit 1-4. With recommendations from the students, complete the “Job Interest
Construct” of the job redesign.
Terms to consider: Prior employment history; aptitude test results,
 Write several hypotheses that you have originated on the board; the topic is not important.
Alternatively, have students propose some. Then compare each hypothesis against the checklist in
Exhibit 1-10 in order to determine if it is a strong hypothesis or a weak one. Some ideas below:
 Chip makers who advertise will sell more packages than chip manufacturers who don’t
advertise.
 Employees who take on leadership roles in projects, advance faster than those who act
only as a team member on projects.
 Employees who maintain a healthy weight are more productive than those who are
overweight.
 Machines that are maintained quarterly generate fewer defects than those maintained
annually.
 Students who attend class will earn higher grades than those who don’t attend.
 WWW Exercises:
 Nielsen revealed its best-liked TV ads and its methodology on the following site. Have students
use Exhibit 1-3 to discuss the methodology used to arrive at the Nielsen conclusions.
o https://www.marketingcharts.com/uncategorized-25514
CHAPTER EXHIBITS
Exhibit Exhibit title

Number
1-1 Where Business Collects Information
1-2 Some Sources of Business Intelligence
1-3 The Research Process
1-4 Constructs Composed of Concepts in a Job Redesign
1-5 Independent and Dependent Variables: Synonyms
1-6 A Summary of Variable Types
1-7 Relationships among Types of Variables
1-8 Why Didn’t Sales Increase?
1-9 Why Is Tracy Nelson’s Performance So Poor?
1-10 Checklist for Developing a Strong Hypothesis
1-11 Model of the Traditional Product Life Cycle Theory

Notes an exhibit in the Research Process Series
CHAPTER LECTURE NOTES
THE ROLE AND PROCESS OF RESEARCH
 The research field is in the midst of upheaval in disruption.

 More than ever researchers are seen as insight providers, not just adding to the data pool but
contributing to better business decisions.
Research verses Data Analytics

 Every strategic and tactical decision starts with information. It is the manager’s decision whether he
has sufficient information or needs more.
 Organizations are seeking competitive advantage by trying to analyze huge oceans of data —big data
—collected from internal —decision support systems—and external databases, but not always with
success.
 Exhibit 1-1 Where Business Collects Information
 Major example: Siemens AG
 Businesses are getting better at data blending combining data from separate data files into a new
composite data file, and then querying that composite data file to help make decisions.
 Business intelligence provides managers with ongoing information about events and trends in the
business environment.
 Exhibit 1-2 Some Sources of Business Intelligence
 Decision scenarios:
o You’re the manager of a full-service restaurant . You’ve experienced significant turnover in
your waiter/waitress pool, and some customers have commented that the once-friendly
atmosphere is changing. Is this a problem for which business research should be used? Where
will you begin in trying to solve this problem?
o You’re the head of the state’s department of transportation. You must determine which roads
and bridges will be resurfaced next year. You usually look at the roads and bridges with the
most traffic, in combination with those representing the biggest economic disaster if closed.
However, these are often located in the most affluent regions of the state. Because your
decision has numerous operational, financial, and public relations ramifications, your manager
suggests using business research to assist with your decision making. Should you authorize
the research?
SNAPSHOT: Analytics Under-Delivers Compared to its Hype
The Research Process

 Business research is a systematic inquiry that provides information to make decisions.
 More specifically, it is a process of planning, acquiring, analyzing, and disseminating relevant
date, information, and insights to decision makers in ways that mobilize the organization to act in
ways that maximize business performance.
 Business research attempts to provide the why so that predictions can be made to deal with the
speed of decision making in ever changing enviroments.
 Businesses are often missing the ‘why’ in this deep dive into historical data.
 Research is a multi-stage process:
 Clarify the Research Question
 Design the Research
 Collect & Prepare the Data
 Analyze & Interpret the Data
 Report Insights and Recommendations
 Make the Management Decision
 Exhibit 1-3 models the sequence of the research process. Recycling, circumventing and skipping occur.
Some steps are begun out of sequence, some are carried out simultaneously, and some may be omitted.
The idea of a sequence is useful for developing a project and for keeping the project orderly as it
unfolds. The research process begins with understanding the manager’s problem--the management
dilemma. In other situations, a controversy arises, a major commitment of resources is called for, or
conditions in the environment signal the need for a decision.
 In every chapter, we refer to this model as we discuss each step in the process.
 Exhibit 1-3 is an important organizing tool because it provides a framework for introducing how
each process module is designed, connected to other modules, and then executed.
 Multiple types of projects can be labeled “business research.”
SNAPSHOT: Big verses Small Data
Research and the Scientific Method

 The essential tenets of scientific method are:
 Clearly defined concepts, constructs, variables, methods, and procedures.
 Empirically testable hypotheses: a way exists to gather evidence that directly supports/refutes any
hypothesis.
 Direct observation of phenomena (facts).
 Conclusions drawn from statistical evidence rather than inferred justification (educated guesses).
 The self-correcting process: ability to replicate and reassess validity of conclusions.
SNAPSHOT: Research on CyberSecurity
THE LANUAGE OF RESEARCH
 To understand or conduct research, you need to use concepts, constructs, operational definitions,
variables, hypotheses.
 The success of research hinges on (1) how clearly we conceptualize and (2) how well others
understand the concepts we use.
Concepts
 A concept is a generally accepted collection of meanings or characteristics associated with certain
events, objects, conditions, situations, or behaviors.
 Concepts…
 are created when we classify and categorize events, objects, conditions, situations, or behaviors—
identify common characteristics beyond any single observation.
 are acquired through personal experience or the experience of others.
 use words as labels to designate them; these words are derived from our experiences.
 have progressive levels of abstraction
 Most concepts used in research are ordinary; but when we need to label less ordinary ones, we borrow
from non-business fields or other languages.
Constructs
 A construct is an abstract idea specifically invented for a given research and/or theory-building
purpose.
 We build or make up constructs.
 Exhibit 1-4 Constructs Composed of Concepts in a Job Redesign shows How Heather, an HR analyst
at CadSoft uses concepts and constructs.
 A conceptual scheme depicts the relationships among all variables of interest.
Operational Definitions
 Confusion about the meaning of constructs or concepts can destroy a research study’s value.
 Researchers use operational definitions rather than dictionary definitions.

 An operational definition is a definition stated in terms of specific criteria for measurement or testing.
 Decision scenario: using a student’s class year in research
SNAPSHOT: Identifying and Defining Constructs
Variables
 A variable is a measurable symbol of an event, act, characteristic, trait, or attribute.
 In practice, one or more variables are used as a substitute for a concept or construct.
Independent and Dependent Variables

 The dependent variable (DV is of primary interest to the researcher and thus to his or her hypothesis;
it is measured, predicted, or otherwise monitored and is expected to be affected by manipulation of an
independent variable (IV), another variable of primary interest.
 The assignment of the variable type (dependent vs. independent) depends on the hypothesis the
researcher is studying.
 Exhibit 1-5 Independent and Dependent Variables: Synonyms
 Exhibit 1-6 A Summary of Variable Types
 Exhibit 1-7 Relationships among Types of Variables, provides a detailed example using research on
the effects of a 4-day working week on productivity
Moderating Variables
 A moderating variable (MV is a second independent variable believed to have a significant
contributory effect on the original IV–DV relationship.
Other Extraneous Variables

 Extraneous variables might conceivably affect a given relationship.
 Control variables (CV) are extraneous variables that we measure to determine whether they
influence our results,
 Confounding variables (CFVs) may also have an effect, so we measure for them or group our
results to study them.
Intervening Variables
 The intervening variable (IVV) is a factor that theoretically affects the DV but cannot be observed or
has not been measured; its effect must be inferred from the effects of the independent and moderating
variables on the observed phenomenon.
Hypotheses, Theories, and Models
Hypotheses
 Hypotheses, theories and models serve researchers in different ways but are related.
 A hypothesis is an unsubstantiated assumption about the relationship between concepts and
constructs; it drives the research.
prior written consent of McGraw-Hill Education. 1-
10
 A theory is comprised of data-tested, supported hypotheses; it is derived from research.

 A model is a visualization of a theory; it is used for clarification and to enhance understanding.
 A hypothesis can be phrased as a declarative statement (descriptive) or a question about the
relationship between two or more concepts or constructs that may be judged as true or false.
 Hypotheses are always conjecture and formulated for empirical testing/measurement.
Types of Hypotheses
 A descriptive hypothesis states the existence, size, form, or distribution of some
concept/construct.
 A relational hypothesis describes a relationship between two concepts/constructs.
 With correlational hypotheses the variables being studied occur together, but there is no
assumption of causation.
 With causal hypotheses one variable being studied is assumed to cause a specific effect on
other variables studied.
 Causal hypotheses not only predict the cause (cause means roughly to “help make happen) but
also the effect.
 In proposing or interpreting causal hypotheses, the researcher must consider the direction of
influence.
Reasoning and Hypotheses

 Reasoning—gathering facts consistent with the problem, proposing and eliminating rival
hypotheses, deducing outcomes, developing crucial empirical tests, and deriving the conclusion—
is pivotal to much of the researcher’s success.
 Two types of reasoning are of great importance to research in forming and testing hypotheses:
induction and deduction.
Induction
 In induction you start by drawing a conclusion from one or more particular facts or pieces of
evidence.
 The inductive conclusion is an inferential leap beyond the evidence presented—that is,
although one conclusion explains the fact of no sales increase, other conclusions also might
explain the fact.
 Decision Scenario: Tracy Nelson’s sales performance
 Image and Caption: Skateboarding
Deduction
 Deduction is a form of reasoning that starts with one or more true premises and the
conclusion flows from the premises given.
 For a deduction—the proof—to be correct and sound, it must be both true and valid: Premises
(reasons) given for the conclusion must agree with the real world (true).
 The conclusion must necessarily follow from the premises (valid).
 Decision Scenario: Sara’s ethics
Combining Induction and Deduction

 John Dewey’s “double movement of reflective thought: Induction occurs when we observe a
fact and ask, “Why is this?” In answer to this question, we advance a tentative explanation
(hypothesis). The hypothesis is plausible if it explains the fact (event or condition) that
prompted the question. Deduction is the process by which we test whether the hypothesis is
capable of explaining the fact.
 Decision Scenario: Effect of promotion on sales
 Exhibit 1-8 Why Didn’t Sales Increase
11
 Exhibit 1-9 Why is Tracy Nelson’s Performance So Poor
What is A Strong Hypothesis?

 Three conditions must be fulfilled:
 Adequate for its purpose.
 Testable.
 Better than its rivals.
 Exhibit 1-10 Checklist for Developing a Strong Hypothesis
Theories
 A theory is an empirically-supported description of the relationships between concepts, constructs, and
hypotheses that are advanced to explain or predict phenomena.
 A theory, therefore, is comprised of data-tested, supported hypotheses; it is derived from research.
 To the degree that our theories are sound (empirically supported) and fit the situation, we are
successful in our explanations and predictions.
 Example: Product Lifecycle Theory
SNAPSHOT: Theory: Retinal Scan Verses RFID for Tracking Beef
Models
 A model, therefore, is a representation of a theory or system that is constructed to study some aspect of
that system or the system as a whole.
 A research model’s purpose is to increase our understanding, prediction, and control of the
complexities of the environment.
 Exhibit 1-11 Model of the Traditional Product Life Cycle Theory
ANSWERS TO DISCUSSION QUESTIONS
Terms in Review
1. What is business research?
Business research, as it is used in this text, is a systematic inquiry that provides information to guide
managerial decisions. More specifically, it is a process of planning, acquiring, analyzing, and
disseminating relevant data, information, and insights to decision makers in ways that mobilize the
organization to take actions that maximize business performance.
2 Distinguish among the following sets of items, and suggest the significance of each in a research
context:
a. Concept and construct—Concepts and constructs are both abstractions, the former from our
perceptions of reality and the latter from some invention that we have made. A concept is a bundle
of meanings or characteristics associated with certain objects, events, situations and the like.
Constructs are images or ideas developed specifically for theory building or research purposes.
Constructs tend to be more abstract and complex than concepts. Both are critical to thinking and
research processes since one can think only in terms of meanings we have adopted. Precision in
concept and constructs is particularly important in research since we usually attempt to measure
meaning in some way.
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b. Deduction and induction—Both deduction and induction are basic forms of reasoning. While we
may emphasize one over the other from time to time, both are necessary for research thinking.
Deduction is reasoning from generalizations to specifics that flow logically from the
generalizations. If the generalizations are true and the deductive form valid, the conclusions must
also be true. Induction is reasoning from specific instances or observations to some generalization
that is purported to explain the instances. The specific instances are evidence and the conclusion is
an inference that may be true.
c. Operational definition and dictionary definition—dictionary definitions are those used in most
general discourse to describe the nature of concepts through word reference to other familiar
concepts, preferably at a lower abstraction level. Operational definitions are established for the
purposes of precision in measurement. With them we attempt to classify concepts or conditions
unambiguously and use them in measurement. Operational definitions are essential for effective
research, while dictionary definitions are more useful for general discourse purposes.
d. Concept and variable—Concepts are meanings abstracted from our observations; they classify or
categorize objects or events that have common characteristics beyond a single observation (see a).
One or more variables substitute for a concept or construct; values are assigned to the variable so
it can be measured and any hypotheses based on them can be empirically tested. In informal
usage, a variable is often used as a synonym for construct or property being studied.
e. Hypothesis and Theory—A hypothesis is a conjecture about a relationship between two or more
concepts/constructs that is configured for empirical testing/measurement. A theory is a data-
supported hypothesis; it is no longer conjecture. Hypotheses drive research; theories are derived
from the results of research. While a theory can be derived from a single research project, we will
have more faith in the accuracy of a theory if the results of multiple research projects confirm the
theoretical conclusion.
You may want to extend this topic by asking students to develop a theory. For example, construct
a theory that will explain the differences in academic success that various students achieve in a B-
school:
3 Describe the characteristics of the scientific method.
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The scientific method emphasizes (1) direct observation of phenomena, (2) clearly defined variables,
methods, and procedures, (3) empirically testable hypotheses, (4) the ability to rule out rival
hypotheses, (4) statistical rather than linguistic justification of conclusions, and (6) the self-correcting
process.
4 Below are some terms commonly found in a management setting. Are they concepts or
constructs? Give two different operational definitions for each.
a First Line Supervisor. (construct)

1. For purposes of a given study a first line supervisor is anyone who is on the company roster
with a job level of ‘‘M-1.”
2.An individual working in a line function supervising at least five employees of category “N-
1.”
b Employee morale. (construct)
1. Degree of mental satisfaction among employees as represented by their score on the XYZ
morale inventory.
2.Mental satisfaction measured as an equally weighted self-report on seven point scales:
Mental satisfaction at home: Excellent (1) Average (4) Poor (7)
Mental satisfaction at work: Excellent (1) Average (4) Poor (7)
c Assembly line. (concept)
1. An assembly line is any work arrangement that meets the following tests:
 The work consists of performing specific tasks in a fixed sequence of successive
workstations.
 The work at a given station is repetitive.
 Materials upon which work is performed moved through the sequence to various
workstations rather than machines or workers moving to the material.
2. An assembly line is any process on the production floor of building A where the process leads
to a gross value addition to the product.
d Overdue account. (construct)

1. All accounts receivable that remain unpaid by the 5th day after the invoice date.
2. All accounts receivable that remain unpaid after the due date of payment, as applicable, based
on terms of credit allowed to the vendor.
e Leadership. (construct)
1. An act of leadership shall be recorded when any member of the small groups under
observation is:
1. Recognized by group members as their leader by their submission to his/her assignments
to specific roles in one of the exercises, or
2. Agrees to his/her suggestion as to how to proceed in making assignments.
2. The degree of leadership embodied in a manager would be measured by:
1. The number of executives of rank K, and above, reporting to the executive directly or
indirectly
2. The increase in the number of executives of rank K and above, reporting to the manager
directly or indirectly, over the last three years
In keeping with management perceptions of weight to be assigned to various factors, (1)
could be assigned a weight of 60% and (2) 40%, leading to an index of leadership.
Personnel may be ranked on this basis.
14
f Union democracy. (construct)

The condition of union governance, in which the rank and file members exercise the power in the
union, as measured by responses to the following three tests:
 Are there free and open elections of leaders in which opposition slates are allowed free
access to the members?
 There are open and free discussion and vote by rank and file members on any contract
approval
 There are effective rank-and-file committee, board, or other type of organizational
arrangement by which workers exercise effective oversight of union officials.
g Ethical standards. (construct)
 Norms or standards for our behavior and relationships with others, that go beyond
known legal standards or where legal standards do not exist.
 Norms or standards that assure that no one is harmed or suffers known or anticipated
adverse consequences from a decision.
5 In your company’s management development program, there was a heated discussion between
some people who claimed, “Theory is impractical and thus no good,” and others who claimed,
“Good theory is the most practical approach to problems.” What position would you take and
why?
Student answers will vary. Sample answer:
The statement that “theory is impractical and thus no good” illustrates a misconception of the true
meaning of theory. The second quotation is more to the point: there is nothing so practical as a good
theory (Kurt Lewin) because of the power it gives us to explain and predict the target phenomenon.
We use theory constantly as we explain why certain events occur or why one procedure succeeds and
another does not. Theory represents an identification of key causal relationships, which explain
outcomes in a variety of situations. It is an effort to extract the essence of relationships, ignoring less
important contextual factors. The adequacy of a theory comes from its capacity to explain phenomenon
in a variety of contexts and situations and this is referred to as its capacity to “travel.” Often, theories
are too simplistic, and therefore lack explanatory power across situations. The solution lies in
improving the theory, possibly introducing more variables, rather than rejecting the central concept.
6 An automobile manufacturer observes the demand for its brand increasing as per capita income
increases. Sales increases also follow low interest rates, which ease credit conditions. Buyer
purchase behavior is seen to be dependent on age and gender. Other factors influencing sales
appear to fluctuate almost randomly (competitor advertising, competitor dealer discounts,
introductions of new competitive models).
a If sales and per capita income are positively related, classify all variables as dependent,
independent, moderating, extraneous, or intervening.
One scheme for assessing the variables:
Car Sales (DV) Buyer gender - EV
Per Capita Income (IV) Competitor advertising - MV
Ease of credit access (EV) Competitor dealer discounts - MV
low interest rates - MV Introduction of competitor models - MV
Buyer age - EV
15
Car Sales (DV) will increase as per capita income increases (IV), as long as low interest (IVV)
increase ease of access to credit among younger (EV) men (EV) and competitors do not introduce
more attractive models (EV), increase advertising (EV), or increase their discounts (EV).
b Comment on the utility of a model based on the hypothesis.

Given that buyer behavior is fickle with respect to ego-involved purchases (e.g. car), and given the
number of uncontrollable extraneous variables, a model based on the above theory is unlikely to be
relevant for any about of time.
Making Research Decisions

7 You observe the following condition: “Our female sales representatives have lower customer
defections than do our male sales representatives.”
a Propose the concepts and constructs you might use to study this phenomenon.
b How might any of these concepts and/or constructs be related to explanatory hypotheses?
There are a variety of answers to this question. One example might be:
A. Concepts—sales representative, male, female
Constructs—customer defection.
B. Female sales representatives who are more culturally supported in establishing and maintaining
relationships extend that personal behavior into the work place.
Lower customer defections = fewer current customers lost at time of contract renewal resulting in
a smaller customer defection percentage.
Customer defection percentage = the number of customers who do not renew their contract
during the measurement period divided by the total number of customers at the start of the
measurement period.
8 You are the office manager of a large firm. Your company prides itself on its high-quality
customer service. Lately complaints have surfaced that an increased number of incoming calls
are being misrouted or dropped. Yesterday, when passing by the main reception area, you
noticed the receptionist fiddling with his hearing aid. In the process, a call came in and would
have gone unanswered if not for your intervention. This particular receptionist had earned an
unsatisfactory review three months earlier for tardiness. Your inclination is to urge this 20-year
employee to retire or to fire him, if retirement is rejected, but you know the individual is well
liked and seen as a fixture in the company.
a Pose several hypotheses that might account for dropped or misrouted incoming calls.
b Using the double movement of reflective thought, show how you would test these hypotheses.
Hypothesis 1—Receptionist misdirects calls due to his inability to correctly hear the problem as stated
by the caller.
The above hypothesis is induced from the situation described in the problem. From the hypothesis we
must be able to deduce some other factual conditions implied by this hypothesis. For example:
Fact 1—The complaints of misdirected calls only occur when the 20-year employee works the
reception desk.
Fact 2—A fully hearing employee does not generate complaints of misdirected calls.
Fact 3—Employee has requested two sick days in the last 3 months for ear-related infections.
Hypothesis 2—A faulty switch causes the misrouted calls.
Fact 1—Switch A is tested by placing several sample calls and the calls are correctly routed.
Fact 2—Switch B is tested by placing several sample calls and the calls are misdirected.
From Concept to Practice
16
9 Using Exhibits 1-8 an 1-9 as your guides, graph the inductions and deductions in the following
statements. If there are gaps, supply what is needed to make them complete arguments.
a Repeated studies indicate that economic conditions vary with—and lag 6 to 12 months behind
—the changes in the national money supply. Therefore, we may conclude the money supply is
the basic economic variable.
b Research studies show that heavy smokers have a higher rate of lung cancer than do
nonsmokers; therefore, heavy smoking causes lung cancer.
c Show me a person who goes to church regularly, and I will show you a reliable worker.
A. 1. If money supply is the basic economic variable, then economic condition changes will parallel
it with a lag.
2. Economic condition variations lag money supply by 6-12 months.
3. Therefore, money supply is the basic economic variable. (Induction)
B. 1. If smoking causes lung cancer, heavy smokers will have a higher lung cancer rate than non-
smokers.
2. Heavy smokers do have a higher lung cancer rate.
3. Heavy smoking causes lung cancer. (Induction)
C. 1. If a person goes to church regularly, this person is a reliable worker.

2. “Bob” goes to church regularly.
3. “Bob” is a reliable worker. (Deduction)
Note: Three is a valid deduction from the major premise (1). The truth of the major and minor
premises may be challenged: church attendance and reliability in the workplace must be
unequivocally connected and “Bob” must be a person, not my dog.
From the Headlines

10 Chipotle Mexican Grill continues to suffer from perception issues after a string of outbreaks
including E.coli worried customers about the safety of eating at the fast casual chain. Their
strategy for getting customers back into their restaurants was to give away free tacos, burritos
and chips. And while their customer survey scores are improving they are still operating at a
loss. What concepts and constructs, and operations definitions, should any future research deal
with?
Concepts/Constructs of interest
 Safe Food (construct)…food that will not make you sick

 Perception of Safe Food…whether a Chipotle customer expects to get sick from food prepared in
the restaurant.
 Safe food preparation environment (construct)…specific government-approved procedures in
place (refrigeration, employee cleanliness, grill cleaning, food delivery, etc. ) to ensure safe food
 Fast casual chain (construct)…a group of restaurants that does not offer full table service, but
promises higher quality food by using few frozen or processed ingredients during food
preparation.
 Customer satisfaction score (construct) …on a survey, a 9 or 10 on a ten-point scale asking
whether Chipotle exceeded the customer’s expectations.
ADDITIONAL DISCUSSION OPPORTUNITIES
Video or Written Case Discussion
You will find a description of each case in the Case Abstracts section of the textbook. Cases and case
supplement, including discussion guides, are available in Connect or downloadable from
17
www.mhhe.com/schindler13e.Cases appropriate for discussion of concepts in this chapter include the

following.
 Campbell Ewald: R-E-S-P-E-C-T Spells Loyalty
 HeroBuilders.com
 Open Doors: Extending Hospitality to Travelers with Disabilities
Additional Discussion Question:

Investment manager Bernard Madoff’s hedge fund Ascot Partners was a giant scam will likely be the
finance story remembered from the last decade. It is estimated that Madoff stole an estimated $50 billion
from noteworthy individuals and institutional investors, and he covered the crime by creating fictional
financial statements for each investor. If you were an institutional investor, how might employing the
tenants of scientific method have protected your organization from this Ponzi scheme?
This question is designed to generate a brainstorming session in class of what types of research are possible
within the area of finance. Students may quickly come up with such ideas as studying, in detail, the
financial statements provided by Ascot Partners, comparing these statements against the returns of other
investment statements received by the institutional investor. If you ask your students to dig deeper, they
may come up with doing a search on the companies on which the hedge fund was invested. It is reported
that the statements provided, which it is reported were falsified, contained some companies that didn’t exist
and, for those that did exist, returns that were far out of line with the industry’s performance. Doing some
research on the specific industries in which the hedge fund was invested might also have given the
institutional investor some protection. Some students may raise the issue that institutional investors hire
firms like Ascot Partners to provide the expertise in researching companies and investing that the
institutional investor does not have. That is a good time to discuss if the buyer of research has any
obligation to insure that the research company it hires has the expertise and skill needed to do the research
desired. It is also reported that Madoff’s fund falsified reports provided to substantiate the statements
provided. Thus, Madoff actually falsified research.
18
Prior Edition Snapshots for Discussion
Referenced URLs may have changed as some companies have merged and/or are renamed.
19
20
Prior Edition Images for Discussion
21
Prior Edition Exhibits for Discussion
The Role of Reasoning in Model Development
The Seven Basic Principles of the U.S. Safe Harbor Agreement
22

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Business Research Methods, 13e, Instructor’s Manual Instructor’s Manual

CHAPTER LEARNING OBJECTIVES

After reading this chapter, students should understand…

1 How business research and data analytics complement each other.

 A complete PowerPoint slide set comes with this chapter.

The test bank for each chapter contains the following:

Connect is the location for several resources:

DISCUSSION AND PROJECT IDEAS

“Research is creating new knowledge.”

 Additional Discussion or Project Ideas

Exhibit Exhibit title

1-1 Where Business Collects Information

1-2 Some Sources of Business Intelligence

1-3 The Research Process

1-4 Constructs Composed of Concepts in a Job Redesign

1-5 Independent and Dependent Variables: Synonyms

1-6 A Summary of Variable Types

1-7 Relationships among Types of Variables

1-8 Why Didn’t Sales Increase?

1-9 Why Is Tracy Nelson’s Performance So Poor?

1-10 Checklist for Developing a Strong Hypothesis

1-11 Model of the Traditional Product Life Cycle Theory

CHAPTER LECTURE NOTES

THE ROLE AND PROCESS OF RESEARCH

 The research field is in the midst of upheaval in disruption.

Research verses Data Analytics

The Research Process

SNAPSHOT: Big verses Small Data

Research and the Scientific Method

THE LANUAGE OF RESEARCH

 Researchers use operational definitions rather than dictionary definitions.

Independent and Dependent Variables

Other Extraneous Variables

Hypotheses, Theories, and Models

 A theory is comprised of data-tested, supported hypotheses; it is derived from research.

Reasoning and Hypotheses

Combining Induction and Deduction

 Exhibit 1-9 Why is Tracy Nelson’s Performance So Poor

What is A Strong Hypothesis?

ANSWERS TO DISCUSSION QUESTIONS

3 Describe the characteristics of the scientific method.

a First Line Supervisor. (construct)

d Overdue account. (construct)

f Union democracy. (construct)

Student answers will vary. Sample answer:

b Comment on the utility of a model based on the hypothesis.

Making Research Decisions

C. 1. If a person goes to church regularly, this person is a reliable worker.

From the Headlines

 Safe Food (construct)…food that will not make you sick

ADDITIONAL DISCUSSION OPPORTUNITIES

Video or Written Case Discussion

www.mhhe.com/schindler13e.Cases appropriate for discussion of concepts in this chapter include the

Additional Discussion Question:

Prior Edition Snapshots for Discussion

Prior Edition Images for Discussion

Prior Edition Exhibits for Discussion

The Role of Reasoning in Model Development

The Seven Basic Principles of the U.S. Safe Harbor Agreement