International Business Research Methods Mahir NAKP Professor of

International Business Research Methods © Mahir NAKİP Professor of Marketing (113 slyts) 1

The Nature of International Business Research (IBR) 2

Decision Making and IBR Intuition (sezgi) Authority Decision Making Process Research is not the single source of decision making Experience Research 3

Authority: Executive authorities of a firm can be consider as an experts to make any decision. They are credible, informative and authorized as well. Intuition: is the management's sixth sense. Some decisions appear to be made from such quick flashes insight Experience: Experience-based information drawn from past situation is empirically based, in that past observations from the basis for it. 4

Research and the Global Marketplace European Union ((EU), North American Free Trade Agreement (NAFTA), and Association of Southeast Asians (ASEAN) are international agreements which create wide multinational markets. These markets need to be searched scientifically, deeply and widely. International business research differs than domestic business research conceptually. 5

Differences Between Domestic and International Business Research 1. New parameters: Duties, foreign currencies, different distributive structures, international documentation, labor regulations 2. New Environmental factors: Languages, culture, religion, political system and level of technology. 3. Border competition: The more the market internationalize, the more the need to business research. 6

Business research covers a wide range of phenomena. How? For managers, the purpose of research is to provide knowledge regarding the organization, the market, the economy. A financial manager may ask, “Will the environment for long-term financing be better two years from now? ” A personnel manager may ask, “What kind of training is necessary for production employees? ” or “What is the reason for the company’s high employee turnover? ” A marketing manager may ask, “How can I monitor my retail sales and retail trade activities? ” Each of these questions requires information about how the environment, employees, customers, or the economy will respond to executives’ decisions. Research is one of the principal tools for answering these questions. 7

Every business issue ultimately boils down to(indirgemek)an information problem. Can the right information be delivered? The ultimate goal of research is to supply accurate information that reduces the uncertainty in managerial decision making. Very often, decisions are made with little information for various reasons, including cost considerations, insufficient time to conduct research, or management’s belief that enough is already known. Occasionally there are successes, but in the long run, intuition (sezgi) without research leads to losses. Business research helps decision makers shift from intuitive information gathering to systematic and objective investigation. 8

What is Business Research? … is a field of practical study in which a company obtains data and analyze it in order to better manage the company. Business research can include financial data, consumer feedback, product research and competitive analysis. Executives and managers who use business research methods are able to better understand their company, the position it holds in the market and how to improve that position. 9

What is International Business Research? … is applying the methods of normal business research to international business environment. 10

More scientifically: business research… is the application of the scientific method in searching for the truth about business phenomena. These activities include defining business opportunities and problems, generating and evaluating alternative courses of action, and monitoring employee and organizational performance. Business research is more than conducting surveys. This process includes idea and theory development, problem definition, searching for and collecting information, analyzing data, and communicating the findings. 11

What is Marketing Research? “. . . the function which links the consumer and the customer to the organization through information. . . ” - Glossary of Marketing Terms “Marketing research is the firm’s formal communication link with the environment. ” - Albert Churchill 12

What is the difference between consumer and customer? Consumer: Person who consumes a kind of product without taking care of the brand. People who drinks milk. Customer: Person who consumes special kind of brand. People who drinks Pınar milk… 13

research-development (R&D)? Research and Technological Development refers to a specific group of activities within a business. The activities that are classified as R&D differ from company to company, but there are two primary models. In one model, the primary function of an R&D group is to develop new products; in the other model, the primary function of an R&D group is to discover and create new knowledge about scientific and technological topics for the purpose of uncovering and enabling development of valuable new products, processes, and services. 14

Marketing Research; Begins before production process and continue after the consumption. Includes: (uncontrollable) macro environment factors: (1) Demographics (2) Socio-cultural structure (3) competition (4) laws (5) economics (6) technology (7) political condition Includes also (controllable) micro environment: (1) Product (2) Price (3) Physical distribution (4) promotion Aims: (1) solving business problems (2) idea generation (3) opportunity evaluation Should be: (1) scientific (2) systematic (3) unbiased Is: (1) Collecting data (2) classification (3) analyze (4) interpret (5) reporting 15

16

17

List of countries by research and development spending. Above 2% (2010) Expenditures on R&D (billions $) % of GDP 1. Israel 9, 4 4, 20% 2. South Korea 55, 8 3, 74% 3. Japan 160, 3 3, 67% 4. Sweden 11, 9 3, 30% 5. Finland 6, 3 3, 10% 405, 3 2, 70% 7. Austria 8, 3 2, 50% 8. Denmark 5, 1 2, 40% 9. Iceland 0, 3 2, 30% 10. Switzerland 7, 5 2, 30% 11. Taiwan 19, 0 2, 30% 12. Germany 69, 5 2, 30% 13. Singapore 6, 3 2, 20% Country/Region 6. United States 18

List of countries by research and development spending. Above 1% Less 2% (2010) Country/Region 14. China 15. France 16. Canada 17. Belgium 18. Australia 19. United Kingdom 20. Luxembourg 21. Norway 22. Netherlands 23. Slovenia 24. Ireland 25. Czech Republic 26. Spain 27. New Zealand 28. Portugal 29. Estonia 30. Italy 31. Russia Expenditures on R&D (billions $) 296, 8 42, 2 24, 3 6, 9 15, 9 38, 4 0, 67 4, 2 10, 8 2, 6 3, 8 17, 2 1, 4 2, 8 0, 36 19, 0 23, 8 n 1 % of GDP 1, 97% 1, 90% 1, 80% 1, 70% 1, 62% 1, 60% 1, 40% 1, 30% 1, 20% 1, 11% 1, 10% 1, 00% 19

The ranking of Turkey by research and development spending. Less 1% (2010) Expenditures on R&D (billions $) % of GDP 32. Belarus 1, 02 0, 96% 33. Hungary 1, 7 0, 90% 34. Poland 6, 9 0, 90% 35. Brazil 19, 4 0, 90% 36. India 36, 1 0, 90% 37. Tunisia 0, 66 0, 86% 38. Ukraine 2, 75 0, 85% 39. Lithuania 0, 47 0, 82% 40. Croatia 0, 7 0, 81% 41. South Africa 3, 7 0, 70% 42. Turkey 6, 9 0, 70% Country/Region 20

Why has been Turkey Taken 42. Place? 1. Turkish companies take patents from developed countries. 2. Turkish firmes avoid the high cost of R&D 3. Lack of consciousness(bilinç)in Turkish firms 4. Lack of public support 21

Nu of R&D Personnel Per 10. 000 Employees in Turkey 2010 22

R&D Domestic Expenditures in Turkey 2000 -2010 23

The distribution of R&D Expenditures Among the sectors in Turkey 2010 Public Industrial Sector higher education 24

Invention Product Development Imitation Creation of products with new or different characteristics that offer new or additional benefits to the customer. Product development may involve modification of an existing product or its presentation, that satisfies a newly defined customer want or market niche. In business and engineering, new product development (NPD) is the complete process of bringing a new product to market (invantion). A product is a set of benefits offered for exchange and can be tangible (that is, something physical you can touch) or intangible (like a service, experience, or belief). 25

R&D is engineering oriented, product development is marketing oriented 26

Applied and Basic Business Research 27

Applied research business is conducted to address a specific business decision (problem or opportunity) for a specific firm or organization. For example, is it profitable for Eti to enter fruit juice sector? Or How much billboard ads do effect the sales of Istikbal products? 28

Basic business research is conducted without a specific decision in mind, and it usually does not address the needs of a specific organization. It attempts to expand the limits of knowledge in general, and as such it is not aimed at solving a particular pragmatic(uygulayıcı, öğretici) problem. Basic research can be used to test the validity of a general business theory or to learn more about a particular business phenomenon. For instance, a great deal of basic research addresses employee motivation. How can managers best encourage workers to dedicate themselves toward the organization’s goals? Or does relation marketing concept has same effect in undeveloped countries also? These two basic researches do not examine the problem from any single organization’s perspective. 29

What is The Scientific Method? All research, whether basic or applied, involves the scientific method. The scientific method is the way researchers go about using knowledge and evidence to reach objective conclusions about the real world. The scientific method is the same in social sciences, such as business, as in physical sciences, such as physics. In this case, it is the way we come to understand business phenomena. 30

Prior Knowledge Theory Sources and Procedures of Scientific Methods Observation Hypothesis Test Conclusion 31

Observations Form the basis by which we recognize or note facts. They are our perceptions of reality. They are experiential(tecrübi)in nature. Facts Are those things or phenomena that we believe are true. Facts are generally consensual(gayri ihtiyari) in nature, in that others who have observed the same phenomena agree to their existence. 32

Concepts Are the basic building blocks of scientific investigation. They are creations of the human mind that are used in the classification and communication of the essence of some set of observations. Concepts are abstract ideas generalized from particular facts. Without concepts, there can be no theory. (cevher, öz) Models Are any highly formalized representation of a theoretical network, usually designed through the use of symbols. 33

34

Managerial Value of Business Research 35

A firm can be product-oriented. A product-oriented firm prioritizes decision making in a way that emphasizes technical superiority(üstünlük)in the product. Thus, research gathering information from technicians and experts in the field are very important in making critical decisions. A firm can be production-oriented. Production orientation means that the firm prioritizes efficiency(verimlilik) and effectiveness of the production processes in making decisions. Here, research providing input from workers, engineers, finance, and accounting becomes important as the firm seeks to drive costs down. marketing-oriented, which focuses more on how the firm provides value to customers than on the physical product or production process. With a marketing-oriented organization the majority of research focuses on the customer and consumer. Research addressing consumer desires, beliefs, and attitudes becomes essential. 36

The decision-making process associated with the development and implementation of a business strategy involves four interrelated stages: 1. Identifying problems or opportunities 2. Diagnosing(teşhis)and assessing problems or opportunities 3. Selecting and implementing a course of action 4. Evaluating the course of action 37

1. Identifying problems or opportunities Business research can help managers plan strategies by determining the nature of situations or by identifying the existence of problems or opportunities present in the organization. Business research may be used as a scanning activity to provide information about what is occurring within an organization or in its environment. Without identifying the problem or describing the opportunity, the business research can not be start. The other steps depends upon identification. 38

2. Diagnosing (teşhis) and assessing problems or opportunities Managers need to gain insight about the underlying factors causing the situation. If there is a problem, they need to specify what happened and why. If an opportunity exists, they may need to explore(keşfetmek), refine, and quantity the opportunity. If multiple opportunities exist, research may be conducted to set priorities. Cause Effect 39

3. Selecting and implementing a course (yön) of action Business research is often conducted to obtain specific information that will aid in evaluating the alternatives and in selecting the best course of action. 40

4. Evaluating the course of action Managers may use evaluation research to provide feedback for evaluation and control of strategies and tactics. Evaluation Research is the formal, objective measurement and appraisal (değer biçme) of the extent a given activity, project, or program has achieved its objectives. Every year thousands of federal evaluation studies are undertaken to systematically assess the effects of public programs. Performance-monitoring research is a specific type of evaluation research that regularly, perhaps routinely, provides feedback for the evaluation and control of recurring(tekrarlanan) business activity. THY constantly and frequently evaluates it’s staff performance by using survey methods. 41

When Is Business Research Needed? 42

Not every decision requires research. Thus, when confronting(karşılaşmak) a key decision, a manager must initially decide whether or not to conduct business research. The determination of the need for research centers on (1)Time limitation, (2) the availability of data, (3) the nature of the decision to be made, and (4) the value of the research information in relation to costs. 43

(1)Time limitation Systematic research takes time. In many instances, management believes that a decision must be made immediately, allowing no time for research. Decisions sometimes are made without adequate information or thorough understanding of the business situation. (şamil) Although making decisions without researching a situation is not ideal, sometimes the urgency of a situation blocks the use of research 44

(2) Availability of data, Often managers already possess enough data, or information, to make sound decisions without additional research. When they lack adequate information, however, research must be considered. This means that data need to be collected from an appropriate source. If a potential source of data exists, managers will want to know how much it will cost to get the data. 45

(3) Nature of the decision to be made A routine tactical decision that does not require a substantial investment may not seem to warrant(garanti etmek) a substantial expenditure for research. For example, a computer company must update its operator’s instruction manual when it makes minor product modifications. The research cost of determining the proper wording(üslup) to use in the updated manual is likely to be too high for such a minor decision. 46

4. Benefits Versus Costs Conducting research to obtain these benefits requires an expenditure of money. In any decision-making situation, managers must identify alternative courses of action and then weigh the value of each alternative against its cost. Business research can be thought of as an investment alternative. When deciding whether to make a decision without research or to postpone the decision in order to conduct research. 47

When NOT TO conduct BR? - when there is poor market timing - when the information already exists - when the decision has already been made - when the research is unethical - when the research results would not be used (e. g. , “I know better” managers) - when there is a lack of resources –to do it right –to implement resulting decisions - when managers cannot agree on what they need to know - when the costs of the research are greater than its benefits 48

International Business Research in the Twenty-First Century 49

Communication Technologies Virtually(neredeyse)everyone is “connected” today. Increasingly, many people are “connected” nearly all the time. Within the lifetime of the typical undergraduate college senior, the way information is exchanged, stored, and gathered has been revolutionized completely. Today, the amount of information formally contained in an entire library can rest easily in a single personal computer 50

Our mobile phones and handheld data devices can be used not only to converse, but also as a means of communication that can even involve business research data. In many cases, technology also has made it possible to store or collect data for lower costs than in the past. Electronic communications are usually less costly than regular mail—and certainly less costly than a face-toface interview—and cost about the same amount no matter how far away a respondent is from a researcher. 51

Global Business Research Like all business activities, business research has become increasingly global as more and more; firms operate with few, if any, geographic boundaries. Some companies have extensive international research operations. Upjohn conducts research in 160 different countries. A. C. Nielsen International, known for its television ratings, is the world’s largest research company. Two-thirds of its business comes from outside the United States. 52

Problem identification research is undertaken to help identify problems that are exist in the future. Examples of problem identification research include market potential, market share, brand or company image, market characteristics, sales analysis, short-range forecasting, long-range forecasting and business trends research. Research of this type provides information about the marketing environment and helps diagnose a problem. (teşhis) 53

For example, a declining market potential indicates that the firm is likely to have a problem achieving its growth targets. Similarly, a problem exists if the market potential is increasing but the firm is losing market share. The recognition of economic, social or cultural trends, such as changes in consumer behaviour, may point to underlying problems or opportunities. 54

problem-solving research may be undertaken to help develop a solution. The findings of problem-solving research are used to support decisions that handle specific marketing problems. Problem-solving research is illustrated by the following example of revamping the image of any brand. (yeniden canlandırmak) 55

Examples of Problem-Solving Researches 56