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Research provides valuable information that guides manager, employees and other personnel of an organization in their daily work for the organization. The information from research guides them to make an effective decision making which will benefit the organization in the long run.
Provide the knowledge and skills.
Research helps in decision-making because the analysis of data provides the clear picture to the manager concerning to the underlying problem, the associated factors, and offers the possible solution.
The researcher interprets the results from the analyzed data and makes a through evaluation on the benefits and consequences for every possible solution.
The researcher also proposes certain recommendations for the next course of action to be taken by the manager. Thus, the manager is able to make a better decision with the help of research.
For example, a research is required to identify the factors that cause the demand for Malaysian made cars (Proton and Perodua) to decline drastically in the past few years. The research undertaken for this specific case would be able to determine the factors that contribute to the decreasing demand for the car. From the result, the management could take certain corrective action to improve the demand. For example, the outcome of a research suggested the company to introduce new models, improve the quality of cars, improve the service quality provided by its service centers, reduce the selling price, and improve design of the car to suit younger generation. The specific recommendation made to the company based on research findings would help the Proton management to take proper action so that it could survive into the future.
1.3 The need for business research
In managing the organization, the manager would come across many managerial problems that are interrelated in various areas such as management, accounting, marketing, production, finance, etc.
Help manager solve the management problems
The researcher would define the problem, determine the research objectives, identify the relevant variables that may relate to the problem, collect data on all important variables, and analyze them to finalize the root of a problem. Finally, the researcher will write a full report based on the data analysis to be presented to the manager concerning the problem and the possible course of action in order to tackle the problem.
Effective and efficient in making the decision
Research helps managers to generate the viable alternative among several alternatives available for effective decision-making. Knowledge on research would also help managers to utilize the available information in a more sophisticated and scientific methods in understanding the problem. The manager also would be able to interact more effectively with every employee in planning for the research and development project (R&D) for the organization.
Look at the problem critically and objectively.
Good manager posses an arithmetic reasoning to sense a potential threat only by looking at certain statistics from the news report. Among the statistical information available are the trend of demand and supply of certain product, the rate of growth in GNP, the rate of interest, the rate of inflation, and the government policies regarding the economy. Sometimes, the statements and comments made by the expert in the related field are also important since they deliver certain message regarding the specific industry that might affect the organization.
Conclusion, a good manager would ask for a research report before making an important decision. A good decision is the one made after taking into consideration all data analysis, the interpreted findings, and recommendations. In contrast, a bad decision is the one made without considering the information available, the potential threat to the organization, and without listening to the expert opinion concerning the underlying problem.
1.4 The role of research in business
Making the right decision is an ideal practice in any business whenever the organization encounters a problem. A good organization primarily conducts research to resolve the critical problems surrounding their business such as competition, customer satisfaction, product innovation, customer complaints, and new government policies affecting the industry.
Decision making process requires systematic and organized efforts to investigate a specific problem in a business setting. The first step in understanding the problem is to identify specifically the main issue that requires further investigation. The next steps are to identify factors associated with the problem, gather the relevant information, analyze data, interpret output and provide the recommendation to the manager for his decision-making. It simply means that the decision making process comprises a series of steps designed and executed with the goal of getting the best solution to the underlying problem faced by the organization.
Actually, the entire process in which the managers attempt to solve their problem is the steps in conducting a research project. The research definition in the previous section suggests that research involved the process of inquiry, investigation, examination, and experimentation that need to be conducted systematically, diligently, critically, objectively and in a logical order. Thus, the results of research would be the findings, which would help the managers to deal with the real situation. Therefore, we can define business research as an organized, systematic inquiry concerning the problem, and undertaken with the purpose of finding the best solution to a problem. In addition, the research findings should be able to clarify all ambiguities surrounding the problem. In research the ambiguities surrounding the problem are addressed in term of research questions.
1.5 The factors to consider in research
Sometimes the manager has many alternatives to choose from in his decision-making for the company. In this case, the manager requires more information concerning each alternative in order to make the right choice. In other words, the manager needs to carry-out a research. However, the determination of the need for research centers on the following factors:
i. Time constraints
A systematic research takes time to accomplish. However, in many instances, the manager needs to make decision immediately and hence it is made without adequate information and a thorough understanding of the problems. If the time allows, the manager should do the research first before making a decision. Making a decision blindly without adequate information might land an organization into trouble.
ii. The availability of data
Adequate information is very important for a manager in making decision. The role of research is to provide the required information to the manager to make his decision. However, in certain cases, a manager has adequate information to assist him and the research is not required. However, a good manager knows that the research is still required to clarify some ambiguities surrounding the industry in which the business is operating. Furthermore, if a potential source of information exists, managers want to know how much it costs to obtain the data.
For example, Era Timur, a company selling stationery items and providing internet café plans to open a new branch in Kota Bharu. The manager of Era Timur wishes to investigate the market potential for the business in the area. The relevant information that would help the manager in making decision are the characteristic of the population in the area, the number of potential customers in the area, the number of schools, government departments as well as private organizations in the area who are using the internet. And not to forget, the number of existing competitors already operating in the area is also important. Since this type of data is usually not readily available, the manager has to carry out a specific research to collect and analyze the required information.
iii. Nature of decisions
The value of research depends on the nature of the managerial decision to be made. A minor decision that does not require a substantial investment may not require the large amount of expenditure for research project. For example, Pandu Yakin Sdn. Bhd., a car rental company wants to upgrade the advertisement regarding some modifications in their services. The current advertisement is not bad in achieving their target consumers. The costs required to research and upgrade the existing advertisement may be higher than the benefits obtained. Therefore, in this particular case, the company does not have to invest in research. However, some organizations are willing to spend millions of ringgit to do a small modification in their product because they are confident of long-term benefits. For instances, the Telekom Malaysia (TM) and Radio Televisyen Malaysia (RTM) re-branding exercises have incurred millions of ringgit to the company.
iv. The value of research
We have discussed the various benefits of research. However, a substantial expenditure is required for conducting good research. Thus, both cost and benefit are important to justify a research project. A manager should identify and weigh the potential values or benefits from the research and compare with the expenditure they have to incur. Three questions would help managers make the right decision in this case. First, is the rate of return worth the investment? Second, will the information obtained from the research improves the quality of a decision? Third, is the proposed research the best alternative for the available fund?
Figure 1.1 illustrates the simple checklist to determine the requirement of a research.
Figure 1.1: The Decision to Conduct or Not to Conduct Research
1.6 The types of research
In research, a distinction is needed not only about the type of research but also about the most general category into which the implications of research might fall. What is the distinction? This distinction is a convenient way to clarify the research activity to shed light on the purpose and importance of the study. The most basic distinction of research activities are categorized into applied research (sometimes called action research) and basic research (sometimes called pure research or fundamental research).
Applied or action research is carried out for the purpose of solving an existing problem. The researcher conducts an applied research when he wants to study about the specific problem. For example, the demand for PROTON is decreasing. The decrease in demand is reflected in the monthly sales of PROTON cars nationwide. The management is trying to identify the factors that contribute to the decreasing demand in order to take an appropriate step before the problem gets worse.
In this case, the research helps the management to get a clearer picture of what was happening in the automotive industry, the crucial factors behind it and the correlation of each factor with the existing economic variables such as interest rate, rate of inflation, and Gross Domestic Product (GDP). After obtaining the data, the researcher would perform the data analysis and come out with certain recommendation based on the output. The management can use the information from the research report to help them in designing a new marketing program, determine the pricing policy, and adopt certain promotional strategy so that the downward trend in demand will change to an upward trend.
Every business organization requires continuous research and development program (R&D) to ensure its growth and survival in the industry. The research will discover the strengths and weaknesses of an organization, its product and service as well as that of its competitors. Since the socio-economic variables change over time, the management of business organization should embark on continuous research and development in order to keep pace with its competitors.
Examples of applied research
i) The study to determine the level of awareness towards the danger posed by counterfeit medicines in the market among the Malaysian consumers
ii) The study to identify the main factors considered by the customers when buying health products in the market
iii) The study to assess the damage caused by the recent flood on government schools in the country
One of the purposes for conducting research is to develop and evaluate the concepts and theories. The researcher conducts basic research to expand the body of knowledge in the particular area by determining the theoretical explanation to the underlying problem. This type of research is not for solving the problem at hand. Rather, the basic research is carried out to develop the theoretical foundation concerning certain phenomena which take place and to expand the limits of knowledge based on the findings.
One carries out basic research to confirm that certain phenomena conform to a certain theory developed by the previous researchers. If the phenomenon does not conform to the previous theory, then the researcher would propose a new theory to explain what was happening. Although basic research does not provide the solution to a specific problem, it does provide a comprehensive understanding concerning the problem in general. Hence, the organizations could apply the theory obtained from basic research to handle their own problems.
For example, a university professor is interested to investigate how the level of service quality provided by the hospital contributes to patient satisfaction for his academic interest. After doing literature search from the published journals and gathering information from patients at several hospitals, the professor found that factors like the quality of communication by the frontline staff, the reputation of doctors, and the environment in the hospital to be the most important criteria that contribute to the patient satisfaction towards the hospital. Hence, whenever the management wants to improve their customer satisfaction, they should specifically improve the quality of those factors.
Examples of pure research are:
a) The influence of environmental awareness on consumer buying behavior towards environmental friendly products or green products in the market
b) The relationship between employee job satisfaction and the quality of service they provide to their customers in service organizations
c) The impact of customer satisfaction towards certain products and their willingness to provide positive words of mouth and recommendation for that particular product to their friends and families
d) Modeling customer loyalty towards the service provided by certain company based on their experience with the quality of service provided and their perception on the corporate image of that company
The general flowchart of a research
Figure 1.2: The process in Historical Research
1.7 Developing a research design
The research design serves as a master plan of the methods and procedures for the researcher to collect and analyze the data required by the research. Determining the most suitable research design is a function of research objectives and the specific requirements of the research. In this master plan, the researcher must consider the type of data required, the design technique (survey, observation, experiment, and case study), the sampling methodology and procedures, the schedule and the budget.
Non experimental research design
Non-experimental research includes a variety of different methods that describe relationships between variables. For example, the survey on television-watching behavior of teenagers and adults, the researcher would like to know what programs the teenagers watch on television. Non-experimental research has two types; that are exploratory and descriptive.
The exploratory research design
Exploratory research is conducted to clarify the nature of ambiguous problems. Ambiguous means that the nature of the problem is unclear, in which the objectives are vague and decision alternatives are difficult to understand. The purpose of exploratory research is to explore the problem or situation to gain better understanding about the dimensions of the problem.
Exploratory research is not intended to provide conclusive evidence from which to determine a particular course of action. Usually, exploratory research is conducted with the expectation that subsequent research will be required to provide such conclusive evidence. Therefore, exploratory research is conducted for three interrelated purposes:
diagnosing a situation:
help diagnosing the dimension of problems so that successive research project will be on target eg: preliminary interview with employees may utilize to learn current " hot' issues as well as concern about bread and butter issues such as wages, working conditions etc
used to determine the best alternatives. (Because several opportunities)
discovering new ideas
Eg; workers have suggestion for increasing products or improving safety. Therefore, consumer may suggest new product ideas or unthought-of problem might be identified.
Exploratory research focuses on collecting either secondary or primary data, and using unstructured formal or informal procedures to interpret them. This research design incorporates the fewest characteristics or principles of the scientific method. It is often used simply to classify the problems or opportunities. Hence, it is not intended to provide conclusive information from which a particular course of action can be determined. Among the examples of exploratory research techniques are; focus-group interviews, experience surveys, and pilot studies. Exploratory research may also use some forms of secondary data (e.g. online database). Exploratory research can be somewhat intuitive and is used by many managers to monitor the demand pattern for their products compared to the competitors' products in the market.
A Thai restaurant is considering expanding its operating hours and product line with a breakfast menu. Exploratory research is required to provide some understanding about the problem. However, an exploratory study with a small number of customers found a negative reaction to a spicy breakfast menu that is one of the menus offered by the business. The findings from the study indicate that the restaurant should not offer this menu for breakfast.
The descriptive research design
The major purpose of descriptive research, as the name implies is to describe the characteristics of a population or an existing phenomenon. Descriptive research is not a stand-alone research; it serves as a basis for other types of research.
Descriptive research uses a set of scientific methods and procedures to collect data and create data structures that describe the characteristics (e.g. gender, occupation, income, academic qualification, age categories, political opinions, preferences towards PROTON, and purchase intentions) of a target population. Descriptive research designs are appropriate when the research objectives include determination of the degree to which marketing variables are related to the actual market phenomena. The researcher looks for answers to the "how", "who", "what", "when", and "where" questions concerning the components of a market
Unlike exploratory research, descriptive research is based on some previous understanding of the nature of the research problem. Although the researcher may have general understanding about the situation, he may need conclusive evidence from the research to determine the course of action. Many circumstances require descriptive research to explain the nature of things. Frequently, the basic understandings from exploratory research and the conclusive evidences of descriptive research are used to determine the extent of differences and association in certain variables among subgroups in a population. The study might also be interested in estimating the proportion of a population that has certain characteristics.
Mr. Fairuzsham, a manager of D'Cinta Enterprise in Machang, wants to focus on cosmetic product by offering some additional items with the particular brands. He believed that 12 to 15 year old girls cared a lot about fragrances, lipstick, and mascara, but he lacked quantitative evidence. He conducts a descriptive research to identify the characteristics of his customers.
This research found that 40% of the young girls use facial cream, 30% use fragrance and 20% use lip-gloss and another 10% use more than one product category. The study also found that 60% of customers who use cosmetics are loyal to certain brands, and another 40% do not care much about brand. In addition, 70% of the customers who are brand loyal choose the brand advertised by their favorite female artist.
2 The experimental research design
In the experimental research is where participants are assigned to groups based on some selected criterion often called the treatment variable. In other words, experimental research is one way to test the presence of cause-and-effect relationship.
Causal research design
Often, there is confusion on the interpretation of causal research design process regarding to the term "relationship". The basis of the term "relationship" goes into two distinctions, the "cause and effect relationship" and "associational relationship" between variables. Although both distinctions mentioned are about the relationship between variables, the difference between these two distinctions is "cause and effect relationship" provides better understanding regarding the relationship between variables. However, depending on the design of the study, if the study wants to determine the cause of one or more variables, it is called a causal study. However, if the study is interested in determining the important variable associated with the problem, this study is called co-relational study.
does smoking cause cancer? - refers to the question for causal study.
Rather, are smoking and cancer related? - refers to the co-relational study.
Causal research is designed to collect raw data structures and information that will allow the decision maker or researcher to model the cause-and-effect relationships between two or more variables.
Causal research is most appropriate when the research objective includes the need to understand the reasons why the market responses change when certain economic variables change. It can be used to understand the functional relationship between the causal factors and the effect predicted on the market performance variable under investigation. This type of research design allows decision makers to gain the highest level of understanding in the research process. In addition, understanding the cause-effect relationships among market factors allow the manager to make if-then statements about the variables.
Causal research designs offer opportunity for identifying, determining, and explaining causality among critical market factors, they tend to be complex, expensive, and time consuming. Among the different data collection techniques available, experimental designs hold the greatest potential for establishing cause-effect relationship because they allow researchers to investigate changes in one variable while manipulating one or two other variables under controlled conditions.
In the quasi-experimental research, the respondents are pre-assigned to groups based on some characteristic or quality these people bring to the study. For example, differences in gender, level of education, age group, program of study, economic status, and political preference are among the characteristics.
The quasi-experimental method is most suitable when a researcher cannot assign people to groups and test the effects of group membership on some other outcome. Quasi-experimental research also called post hoc research or after-the-fact research since the actual research takes place after the assignment of groups such as employed versus unemployed, malnourished versus non-malnourished, male versus female. Because assignment has already taken place, the researcher has a degree of control over the cause of whatever effects are being examined.
The comparison among research designs
Discover the insights and new ideas about the problem at hand. To confirm a problem
Describe the problem at hand and relate to the characteristics of the population under study
Determine cause and effect between the independent and dependent variables
Flexible, versatile, does not base on proper research design.
Based on specific objectives, research questions, and research hypotheses of the study
Manipulation of one or more independent variables, and the
control of other variables
Expert interviews, pilot surveys, analyze secondary data, and qualitative research.
Structured data collection method, proper statistical data analysis procedure
changes in the rate of interest by Bank Negara, changes in government policy on import tax, etc
Example of possible findings:
The volume of sale is declining. However, the exact factor is still unclear at this stage
The volume of car sales is significantly related to specific factors such as high rate of interest, rising cost of petrol, etc
The rate of interest on car loan, the import duty, and certain government policies affect the sale of cars in the country
The major classifications of research design are exploratory, descriptive, and causal research design. However, the distinctions among these classifications are not absolute. For example, a research project may involve more than one type of research design and serve for several purposes. In other words, a combination of research design may be employed depending on the nature of the problem. For instance, problem definition begins with an exploratory research when little is known. Exploratory research is the initial step in the overall research design framework followed by descriptive or causal research.
Nevertheless, it is not necessary to begin every research design with exploratory research. The decisions depend upon the precision with which the problem has been defined and the researcher's degree of certainty about the approach to the problem. Exploratory research may also follow descriptive or causal research. Basically, exploratory research is conducted to understand the research findings of descriptive or causal research. This situation happens when the results are difficult to interpret into the real situation.
Unlike exploratory research, descriptive research is based on some previous understanding of the nature of the research problem. Although the researcher may have general understanding about the situation, they need conclusive evidence of the answer required to determine the course of action. Many circumstances require descriptive research to explain the nature of things. Frequently, the basic understandings from exploratory research and the conclusive evidences of descriptive research are used to determine the extent of differences and association in certain variables among subgroups in a population. Besides, the study is also interested in estimating the proportion of a population that has certain characteristics.
1.8 Characteristics of a good research
High-quality research is characterized by many characteristics and certain characteristics tend to be related. Among the characteristics are:
It is based on the work of previous researchers in the area. This does not necessarily mean that the new researcher duplicates their work, but the new researcher refers the work of others and continues from where they stopped. In other words, a new researcher continues from where the earlier researcher finished their work in order to improve what has already been achieved. If the new researcher does not continue from where they finish, he might be repeating the same work all over again or he is re-inventing the same wheel!
It can be replicated in another set of population. If a research examines the relationship between problem-solving ability and arithmetic reasoning of primary school students, the same study should also be replicable to the secondary school students for two reasons.
First, one of the hallmarks of any credible scientific finding is that it is applicable. Second, if the results of an experiment can be replicated, they serve as a basis for further research in the same area.
It is generalizable to other population possessing similar characteristics. In other words, the conclusion from the study can also be applied to other population if their characteristics are almost equal.
A good research is based on certain rationale and it relates to certain theoretical foundation. Research does not stand alone as just interesting questions without the logical theory. Major areas of research need to be broken into smaller elements, and all these elements need to be tied together in a framework with a theory.
Research can generate new questions and it is cyclical in nature.
Research is incremental, that is it expands from small to larger scope.
Research is an activity undertaken for the betterment of society. Research and development is an effort to find means and ways to improve the present quality of products and services, and also the method of doing some other thing in life.
Technically, a good research must have the following characteristics:
The research purpose is clearly defined. No ambiguity arises at all.
The outline of research process is explained in detail
Research design is thoroughly planned and clearly understood
High ethical standards of research are applied all the time.
Limitations are revealed and the scope of research is properly defined.
The method of data analysis and statistical tests to be employed is adequately explained and justified.
Research findings are presented clearly and unambiguously
Conclusions and recommendations regarding the problem under study are clearly stated and explained.
1.9 Basic ethics in research
Researchers should observe and follow the research ethics at all time during their research. The ethics in research refer to a code of conduct or expected societal norm of behavior of researchers while conducting research. Ethical conduct applies to the researchers themselves, the organization involved in the research project, the organization sponsoring the research, and the respondents who participate in the research.
The basic principles of ethical research are:
Protection from harm - Researchers, respondents and individuals involved in the study must be protected. If there is any doubt that there is certain risk involved, then the research project should not be undertaken in the first place.
Maintenance of privacy - The work of researchers is confidential. The researchers should not reveal the identity of their respondents involved in the study. The data collected from respondents should be kept confidential at all time and should only be used for the research at hand.
Coercion - The respondents are participating in the study at their own will. Their response to during data collection should be free from any influence. Even, the respondents are free to participate or not participate in the study.
Informed consent - the respondents should be made to understand the rationale for the research and they should agree to waive their right to privacy when they participate in the research activities.
Confidentiality - the researcher needs to give assurance to respondents that their identity would not be revealed, and the information given is treated as private and confidential.
Sharing the findings - after the study has been completed, the report should be presented to the audience. The report should also be made available to be viewed by the respondents who participated in the study.
1.10 Overview of basic steps in research process
The need for a research planning and its processes:
To identify research problem and write its problem statement
To formulate the problem statement into research objectives, research questions, and research hypothesis to be tested.
To collect data and perform the required data analysis.
To write a report and present to the management.
Figure 1.1: Phases of the Research Process
Sources: William zikmund: pg: 59
1.11 Stages in the research process
Each of the six stages in the research process described below;
Identifying the problem for research
The research task is to clarify a problem, to evaluate a program or to define an opportunity. Problem definition is the indication of specific business decision area that will be clarified by answering some research questions (William Zikmund, 2003).
Problem definition allows a researcher to set the proper research objectives. If the purpose of the research is clear, the chances of collecting the necessary and relevant information. Exploratory research is usually conducted during the initial stage of the research process (more will be said about exploratory, descriptive and causal in chapter 4). The purpose of the exploratory research process is to progressively narrow the scope of the research topic and to transform discovered problems into defined ones, incorporating specific research objectives.
There are 4 basic categories of techniques for obtaining insight and gaining a clearer idea of a problem:
The data have been previously collected by other party for their purpose which might not be similar to the one at hand.
Researcher collects data from the similar research population to serve as a guide for a proper study.
The exploratory research that intensively investigates the situations similar to the researcher's problem situation at hand.
Exploratory research techniques in which individuals who are knowledgeable about a particular research problem are surveyed.
Planning the research design
A research design is a master plan specifying the methods and procedures for collecting and analyzing the needed information. It is a framework or blueprint that plans the action for the research projects. The objectives of the research methods, the available data sources, the urgency of the decision, and the cost of obtaining the data will determined which method is chosen. (William zikmund, 2003).
Sampling involves any procedures that use a small number of items or a portion of a population to make conclusion regarding the whole population. In other words, a sample is a subset from a larger population (Zikmund, 2003).
The sampling question that must be asked:
Who is to be the sampled?
How big should the sample be?
How the sampling units are to be selected?
There are two types of sampling techniques can be used probability sampling or non probability sampling (more will be chapter 9).
There are many methods of data collections. When the survey methods is utilized, some form of direct participation by the respondent is necessary during the process. The respondents may participate by filling out a questionnaire or by interacting with an interviewer.
Often there are two phases to the process of collecting data;
A pre-testing phase, using a small subsample, may determine whether the data collection plan for the study is an appropriate procedure.
The main study
The process of collecting data from the selected respondents in the actual population for the study.
Processing and analyzing data
Data processing generally begins with the editing and coding of the data. Editing involves checking the data collection forms for omissions, legibility, and consistency in classification. The editing process corrects problems such as interviewer error before the data transferred to a computer or ready for tabulation.
Analysis is the application of reasoning to understand and interpret the data that have been collected. Statistical analysis may range from portraying a simple frequency distribution to very complex multivariate analysis, such as multiple regressions.
Conclusion and preparing a report
The final stage in the research process is to interpret the information and draw conclusions relevant to managerial decisions. The research report should communicate the research findings effectively. The written report serves several purpose such as it is a historical document, a record that may be referred to later if the research is to be repeated or it further research is to be based on what has come before.
1. _____ is the application of the scientific method in searching for the truth about business phenomena.
2. All of the following are important aspects of the business research process EXCEPT:
searching for and collecting information
idea and theory development
making results publicly available
3. Which of the following are the two types of research based on the specificity of its purpose?
basic and applied
scientific and non-scientific
cross-sectional and qualitative
quantitative and secondary
4. _____ is conducted to address a specific business decision for a specific firm or organization.
Basic business research
Qualitative business research
Quantitative business research
Applied business research
5. Which type of research tries to verify a theory or to learn more about a concept and is not intended to solve a particular business problem?
total quality management
the scientific method
6. Which of the following refers to the way researchers go about using knowledge and evidence to reach objective conclusions about the real world?
7. When a manager decides not to do research because a decision needs to be made before the results of the study can be analyzed, this is an example of which aspect in the determination of the need for marketing research?
nature of the decision
availability of the data
For each situation above, state whether it is a basic or an applied research and give reasons for your answer.
a) Define exploratory research. Explain three (3) interrelated purposes for exploratory research. (7m)
b) List and briefly explain four (4) major factors that must be considered if you want to conduct Business Research. (8m)