ROLE OF RESARCH IN MAKING DECISION

Project report

Subject: RESARCH METHODOLOGY

By

Ms. Riddhima pramod sawant

M.com ( Banking and Finance) Part-I

Semester III Roll no 90

Submitted to

Prof. DR. S.S SAWANT

Sydenham College Of Commerce and Economics

B-road, Churchgate Mumbai 400020

2015-16

Certificate

It is certified that Ms Riddhima pramod sawant

M.com (Banking and finance) Part-II semester III have submitted the project
report in the subject RSEARCH METHODOLOGY entitled ROLE OF RESARCH IN
MAKING DECISION that her work is original and fulfils the partial requirement of
passing the examination in this subject.

Name & signature of the prof.

Prof. DR. S.S . Sawant

Dept.

Sydenham College of commerce and economics

B-Road, churchgate, Mumbai 400020
Date:

TABLE OF CONTENT
Serial no

Index

What is research?
Characteristics of research
High quality research
Steps for making a good research
Research design
Types of research design

2
3
4
5
6
7

Importance of Research in Business

Decision Making

Market and consumer research

Importance of Operations
Research in Decision-Making
Simplifying Complexity
Marketing Research and Decision
Making

Decision making
The Decision-Making Process

Bibliography

What research is ????

The systematic process of collecting and analysing

information in order to increase our understanding of the

phenomenon about which we are concerned or interested

research is based on direct experience / observation by a

passenger.

research is based on valid procedures and principle.

research is a cyclical process, it starts with a problem and
end

with a problem.

Research utilise proven analytical procedures in gathering

the data , whether historical , descriptive , experimental
or case study.

characteristics of research
originates with a question or problem.
requires clear articulation of a goal.
follows a specification plan or procedure.
other divides main problem into sub problems.
guided by specific problem, question or hypothesis.
accepts certain critical assumptions

requires collection and interpretation of data.

cyclical in nature.

Good Research Project Should

address an important question , advance knowledge.
the scope and limitations of the work to be clearly
defined .
the process to be clearly explained so that it can be
reproduced and verified
a thoroughly planned
possible.

by other researcher.

design that is as objective as

High quality research.

good research require high ethical standard be applied.
all limitations be documented
data be adequately analysed and explained.
All findings be presented unambiguously and all conclusion
be justified by sufficient evidence.
Steps for making a good research
Raising A Question
Suggest Hypothesis
Literature Review
Literature Evaluation
Acquire Data
Data Analysis
Data Interpretation
Hypothesis Support.

Research Design
definition
Task of defining the research problem is the
preparation of the research project,
popularly known as research design

Decisions regarding what, where, when,

how much , by what means concerning an
inquiry or a research study constitutes a
research design

Meaning
A research design is the arrangement of
conditions and analysis of data in a manner
that aims to combine relevance to the
research purpose with economy in
procedure.

Research design have following parts:

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a

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Sampling design :
Which deals with the methods of selecting
items to be observed for the study.
Observational design :
Which relates with the condition under
which the observation are to be create.
Statistical design :
Which concern with the questions of the
how the information and data gathered are
to be analysed?

Operational design :
Which deals with techniques by which the
procedures satisfied in sampling.
Different research design
Incase of exploratory research study
In case of descriptive and diagnostic
research
In case of hypothesis testing research
studies.

In case of exploratory research study :

this method is also termed as formulative
research studied.
The main purpose is that of formulate the
research problem. Three methods are
The survey of concerning literature
The experience survey
The analysis of inside stimulating.

In case of descriptive and diagnostic

research
The study determine the frequency which
some thing occure.

Types Of
Research

Qualitativ
e

Quantitati
ve

Qualitative research is research dealing

with the phenomena that are difficult to
qualify mathematically, such as a beliefs ,
attributes and symbol.

The researcher aim to gather an in depth

understanding of human behaviour and the
reasons that govern such behaviour .
The qualitative method investigates the why
and how of decision making not just what,
where, when .

Advantages:
it enables more complex aspetcs of a person
experience to be studied
fewer resdtriction are placed on the data to
be collected
not everything can be qualified easily
individuals can be studied in more depth.
Good for exploratory research and
hypothesis generation
The participants are able to provide data
their own words and in their own way.

Disadvantage:

It is more difficult to determine the validty

and reliability of linguistic data.
There is more subjectively involved in
analysing the data
Time consuming.

Quantitative research:
It refer to the systematic imvestigation of
any phenomena via statistical ,
mathematical techniques.
The object is to develop and employ
mathematical models , theories.
Generally it include scientific methods
The generation of model , theories, and
hypothesis
The development of instrument and
methods for measurement
Experimental control
Modelling and analysing of data

Evaluation of result.

Advantages
it allows the researcher to measure and
analyse the data
the researcher is more objective about the
findings of the rearech
it can use to test hypothesis in experiments.

Disadvantages
The main disadvantage of this is the context
of the study is ignored.
It doesnt study things in a natural setting
A large sample of the population must be
studied for more accurate result.

Importance of Research in Business

Decision Making
Businesses conduct research for many
reasons, such as gathering crucial
information about consumers and business
customers.
The key function of management is take
decisions and without help of the research
and analysis of present situation and future
forecasting , decisions may not be effective.
So research helps to take right
decisions. Based on research, management
can make intelligent and well informed
decisions.
Businesses use research to ascertain the success
of their advertising. For instance, a dairy
manufacturer may want to find out what
percentage of the people saw its latest tv
commercial.
The dairy manufacturer may find that more
individuals become aware of its advertising the
longer the tv ad runs.

The company may decide to run its tv ads at

different times if few people have seen the ads
A business can make well-informed decisions due
to research.
In the research process, the business will be able
to acquire details about key business areas,
analyze it, create a strategy and distribute
business information.

Reports, presented to the top management, often

contain details on consumer and employee
preferences and all the available channels for
sales, marketing, finance and production.
Management makes use of these details to
determine the best strategy.

Research is a necessity at all stages and phases

of business operations.

Initial research is needed to evaluate whether

getting into the given kind of business would be
profitable and whether there exists demand for the
proposed product.

Regarding the staff, a correctly carried out

research can uncover important details on their
satisfaction quotient, the difficulties experienced by
them and how the problems related to
relationships at the workplace could be handled.
An analysis into the results would allow the
management to bring about changes for the all
round effective functioning of the organisation and
its employees.

The workers can be trained and coached in line

with the needs. This would help personal as well
as professional development improving overall
organizational performance.

Research is important for managerial decision

making. All strategic business areas are analyzed
and evaluated; then techniques for more efficient
procedures are created.

All businesses usually have many ways of doing

an activity. Through proper research, the
organization will be able to pick the most effective,
productive and profitable one. Research could
possibly be applied to marketing, production,
finance, IT and Human resources.

Research can answer questions for various

problems, from getting a grip on industry trends,
identifying new products to produce and deliver to
the market, or deciding on which site to locate an
outlet, to better understanding what it needs to
fulfill customer demands.
Research can also help evaluate if a product is
accepted in the market. Research aids expansion
into new markets.
Research helps in testing the potential success of
new products. Businesses have to understand
what kinds of products consumers would like
before they market them.

For instance, a restaurant may in the beginning,

interview focus groups to test types of burgers.

The focus groups will probably include small

teams of consumers.

The goal of the focus group may be to figure out

which burger customers prefer. Ultimately, the
company may test the burgers through surveys
with larger groups of people.
The above points state the importance of research
in business decision making.
Research is necessary to gather facts and
statistics with regards to a companys customers,
employees and competitors.
Based on these numbers, businesses are able to
make better managerial decisions.
Businesses of all sizes engage in extensive
research to help improve and expand. For
small businesses and start-ups, effective,
cost-efficient research can be an important
step toward long-term success.

Developing an understanding of the

relationship between research and business

decisions helps ensure your business is

getting the most out of its research efforts.

Basics of Business Research in

Decision-Making
Research is an important part of a business
decision-making process, especially when it
comes to major structural changes or new
product lines.

This is because its often less difficult for a

business to replicate past successes than it
is to develop an entirely untested approach.

Even highly innovative companies rely on

extensive information about consumer
needs, market trends and management
practices when developing a business
strategy.

In some cases, an effective business

manager must also be able to recognize
some of the weaknesses of research and
rely on her own experience or intuition to
guide decisions.

Market and consumer research :

One of the most valuable kinds of

research in business decisions is market
research.
This is information a business collects or
purchases about its potential consumers
and their buying habits, with the goal of
better understanding their customers
needs.
This information is then used to make
decisions about new product offerings,
pricing and advertising to best meet the
markets demands.

It also provides information to indicate

when a business strategy is
underperforming or unlikely to be
effective, so that your business can cut
costs where necessary.

Competition Research

Its wise for a business to always keep a

careful eye on its competition. Research into
the activities and plans of competitors
called competitive intelligence provides
insight about their potential weakness and
opportunities for your business growth.
In addition, competitive intelligence can
indicate weaknesses, including places where

competitors are particularly effective in

meeting consumers needs.

Armed with this information, managers can

make strategic decisions about how to best
position their business to secure a solid
place in their market.
Short comings of business resarch:
While research is highly useful to guide
business decisions, managers should use it
with an awareness of potential weaknesses.
Many errors can arise in the research
process. For example, if a problem is
inaccurately stated in a particular study, the
questions researchers ask may not be
relevant to the business actual challenges.

In another situation, the variables business

researchers are able to examine may not
actually be useful for making conclusions.
Its important to remember that research is
often only as good as the data available,
and that it must sometimes be used with
caution.

Importance of Operations Research

in Decision-Making

Operations research applies sophisticated

statistical analysis and mathematical
modeling to solve an array of business and
organizational problems, as well as improve
decision-making.

As the business environment grows more

complex, companies and government
agencies rely on analysis to inform decisions
that were once based largely on
management intuition.

Originally developed by the U.S.

Department of Defense during World War II,
operations research has helped many large
companies and government agencies make
better decisions, boost performance and
reduce risk.

Simplifying Complexity

Modern challenges associated with a global

economy and the growth of technology have
increased the complexity of the business
environment.

Modern corporations often strive to serve a

global, rather than a regional or national,
customer base and face worldwide
competition.

By relying on sophisticated mathematical

models and advanced software tools,
operations research can assess all available
options facing a firm, project possible
outcomes and analyze risks associated with
particular decisions.

The result is more complete information on

which management can make decisions and

set policy, according to the Institute for

Operations Research and the Management
Sciences, INFORMS for short, a national
organization of operations research
professionals.

Maximizing Data

Companies collect large amounts of data but

may feel overwhelmed by the volume and
lack the time or expertise to fully analyze
these data, transforming them into useful
information on which to base decisions.

Operations research uses advanced

mathematical and statistical techniques,
such as linear programming and regression
analysis, to help organizations make the
most of their data, according to INFORMS
Science of Better website.

Through detailed analysis of the data,

operations research analysts can help
uncover options that lead to higher profits,
more-efficient operations and less risk.

Adding value
In its executive guide to operations
research, "Seat-of-the-Pants-Less," INFORMS
reports that operations research has added
value to organizations in the public and
private sector alike.

For example, INFORMS reported that UPS

used operations research to redesign its
overnight delivery network in such a way
that saved more than $80 million between
2000 and 2002. Meanwhile, New Haven,
Connecticut, used operations research to
determine the extent to which the city's
needle exchange program reduced HIV
infection rates.
Considerations

INFORMS outlines five signs for

organizations that could benefit from
operations research.
indicators are facing complex decisions,
having problems with processes, having
trouble with risk, not making the most of

available data and needing to overcome

stiff competition.
Operations research analysts can help
organizations overcome these
challenges.

CASE STUDY

Improving strategic decision

making
A CIMA case study
RESARCH
Financial accountants keep records of business
transactions such as sales invoices. They use
these records to prepare a firm's accounting
statements.
Management accountants evaluate and interpret
this financial data to advise the senior managers in
the business.
They play important roles in managing business
performance and improving decision making.

DECISION MAKING
CIMA is the leading and largest professional
body for management accountants with
over 171,000 members and students
operating at the heart of business in 165
countries. Its members work in financial and
non-financial roles throughout organizations
and carry out all their training and
experience requirements in business itself.
This provides them with a unique insight
into how their organisations operate. CIMA's
mission is to be the first choice for
employers in the qualification and
development of management accountants.
Young people obtain the CIMA qualification and then
membership for many reasons. Some want a career in
accountancy but do not just want to work with numbers.
They look for management and leadership roles where
they can contribute to business performance.
Others are already managers in business
but want to improve their skills in
financially-based decision making. CIMA
people are financially qualified business
leaders and are not limited to working in
accountancy practices and finance
departments. They are active across a range

of management roles in retailing,

manufacturing, property, energy and
government services.

Marketing Research and Decision Making

Marketing research plays two key roles in

the marketing system.
First, as part of the marketing intelligence
feedback process, marketing research
provides decision makers with data on the
effectiveness of the current marketing mix
and offers insights into necessary
changes.
Second, marketing research is the primary
tool for exploring new opportunities in

the marketplace.
Segmentation research and new product
research help identify the most lucrative
opportunities for a firm.
Marketing Research Defined

Now that you have an understanding of how

marketing research fits into the overall
marketing system, we can proceed with a
formal definition of the term, as stated by
the American Marketing Association:

Marketing research is the function that links

the consumer, customer, and public to the
marketer through informationinformation
used to identify and define marketing
opportunities
and problems; generate, refine, and
evaluate marketing actions; monitor
marketing

Importance of Marketing Research to

Management
Marketing research can be viewed as
playing three functional roles: descriptive,
diagnostic, and predictive.
Its descriptive function includes gathering
and presenting statements of fact. What is
the historic sales trend in the industry? What
are consumers attitudes
and beliefs toward a product? Opening a
pack of bacon is a messy job.
Bacon lovers have to reach into the
package, and if they only pull out a few
slices, theres no easy way to
store the remainder.
Oscar Mayer marketing researchers hear
plenty from consumers about what they
disliked about its former bacon packaging.

So marketers figured the best solution would

be a packaging innovation that eliminated
the chore of placing the opened pack in a
resealable plastic bag or wrapping it in
plastic or foil.

This unwanted task was done so that the

last piece of bacon would be as fresh as the
first.
Recently, Oscar Mayer Center Cut Bacon
was introduced in a new Stay-Fresh
Reclosable
Tray. The flip top lid allows easy access to
the bacon inside. The top snaps closed,
making it readily resealable. The flat tray
makes for simplified storage in the
refrigerator.5
The second role of research is the
diagnostic function, wherein data and/or
actions are explained. For example, what
was the impact on sales when the Oscar
Mayer package design was changed? How
can product/service offerings be altered to
better serve customers
and potential customers? Since kids eat
over 5 billion ounces of ketchup each year,
Heinz decided that the heavy users (kids)
should have a lot to say (via marketing
research) about how to make ketchup fun.
Heinz listened and watched children using
ketchup, which resulted in a new bottle
design, name selection, and color. The true

ketchup connoisseurs helped create Heinz

EZ Squirt green ketchup! More than 10
million
bottle were sold in the first seven months!
This was followed up a year later with
Funky purple ketchup.
The final role of research is the predictive
function. How can the firm best take
advantage of opportunities as they arise in
the ever-changing marketplace? Kraft Foods
noticed that consumers were flocking to
low-carb diets.
The company used marketing research to
determine if this was a fad or long-term
trend. Determining that low carb was
more than a fad, it entered into an alliance
with Arthur Agatston, the creator of The
South Beach Diet.
The result was certain Kraft products being
labeled South Beach Diet Recommended.
Further marketing research led to a broad
line of products entitled
The South Beach Diet brand. Products
include cereal, meal replacement and cereal
bars, refrigerated sandwich wraps, frozen
entrees, and frozen pizza.

Drive for Quality and Customer Satisfaction

Importance of Keeping Existing Customers
Understanding
Marketplace

the

Ever-Changing

Decision making

conviction

there
should not
be any
doubt

knowledge
to justify
your
decisions

goals
achivement

Organisational Decision making

 the process of responding to a

problem by searching for and selecting
a solution or course of action that will
create value for organisational
stakeholders.
There are basically two kinds of
decision that managers called upon
to make:
Programmed and non-programmed
Types of Problems and Decisions
Structured problems
* Involved goals that clear.
*Are familiar(have occurred before)
*Are easily and completely definedinformation about the problem is
available and complete.
Programmed decision
*A repetitive decision the can be
handled by a routine approach.
Programmed vs. Non-programmed
Decisions

Characteristics

Programmed decisions

Non-programmed decisions

Type of problem

Structured

Unstructured

Managerial level

Lower level

Upper level

Frequency

Repetitive

New,unusual

Information

Readily available

Ambiguous or incomplete

Time frame for solution

Short

Relatively long

Solution relies on

Procedures,rules, and policies

Judgment and creativity

The Decision-Making Process

Define the
Problem

Gather
facts
and
develop
alternati
ves.

Evaluate
Alternatives

Select
the best
alternati
ve.

Implement
the chosen
Alternative

Follow up
and
evaluate
the chosen
alternative.

 Identify a problem and decision

criteria and allocating weights to
the criteria.
Developing, analyzing, and
selecting an alternative that can
resolve the problem.

Implemented and selected

alternatives.
Evaluating the decisions
effectiveness.

The decision making process-Example

Identification of a problem

My sales Reps need new computers!

Identification of Decision Criteria

Memory and Storage, Display Quality,
Better Life,Warranty, Carrying weight
Allocation of weights to criteria
Memory and Storage-10, Display
Quality -8, Better Life -6,Warranty -4,
Carrying weight-3
Development of alternatives
Toshiba, HP, Soni Vaio, Qosmio,
Gateway, Apple iBook, Lenovo, Dell

Analyzing of alternatives
Toshiba, HP, Soni Vaio, Qosmio,
Gateway, Apple iBook, Lenovo, Dell

Selection of alternatives
Toshiba, HP, Soni Vaio, Qosmio,
Gateway, Apple iBook, Lenovo, Dell
Implementation of alternatives
Evaluation of decision alternatives
Toshiba

Bibliography
1.

Business case studies.com

2.

Economics times newspaper.

3.

Resarch paper on health care.