Statistics and Research in Business.

Statistics and Research in Business
It may seem strange, but did you know that the purpose of statistics is to simplify things?  It’s true.  The idea behind statistics is to condense a lot of numbers into single numbers that tell the story behind the larger set; e.g., to determine the average of all of those numbers or how they are clustered around that average (closely spaced around it, or spread out around it).
To get an idea of what is statistics, please watch the What is Statistics Video.
Please watch the “Lies, Damned Lies, and Statistics” Video for a presentation on what statistics should NOT be.
Try conducting a search on your favorite search engine for the key words “statistics and business research.”  The vast array of results you will receive spans the spectrum of topics, from growth rates of the broadband markets in Brazil (Research and Markets: Brazil – Broadband Market – Overview, Statistics and Forecasts, 2012) to predicting the variables to forecast foreign exchange currency rates (Statistics; Research in the Area of Statistics Reported from Cass Business School, 2012).  The lesson here is obvious: successful businesses from all sectors of the economy are not built on whims and beliefs, but on evidence-based research.  The volume of published research indicates that statistical analysis has become a fundamental staple of corporate decision-making.  Research can be used to make decisions for marketing or financial allocations or deciding whether to consolidate or close the business.  Gathering and analyzing the data to reach concrete conclusions about the current and future conditions that your business will face is paramount.  Critical decisions need to be based on research because of the impact these decisions have on other people and other businesses.  Examples include department managers who need to justify expansion plans to corporate headquarters.  Upper management is not likely to authorize an expansion, thereby risking millions of dollars, without a reasonable level of support for the expansion.  Business research fills that need.  Likewise, CEOs and CFOs need to explain to their stockholders why decisions are made.  Using a statistical approach to the data available allows for evidence-based decisions and, therefore, evidence-based justifications for these decisions if those who have a right to explanations demand it.
Even if it is not your goal to become a statistically savvy researcher, the need to be able to read, understand, and interpret a research report is important.  Whether receiving data from a colleague or finding appropriate studies that have been performed concerning an upcoming project that your company contemplating, knowing what you are looking at and how the researchers came to their conclusions will enable you to effectively participate in discussions on these types of corporate decisions.
Now that we have established that statistical analysis is everywhere, it is time to examine how to approach learning statistics.  Later in the module lecture notes, you will see a detailed set of steps to follow.  These steps will give you a better chance of success.  The key that should be emphasized is that it cannot be learned overnight and all in one piece.  The modules break down the different analyses into segments that can be assimilated.  There are also a myriad of sources available on the Internet (search for “business statistics tutorials”). These sites can be helpful as auxiliary sources of tutorials and other beneficial information.  A little extra time spent well will pay dividends in your quest to become competent at generating, analyzing, and understanding business statistics.
Why We Study Statistics and Research in Business
In the competitive global economy of the twenty-first century, managers are challenged to make tough business decisions, such as how to keep an annual growth rate of 20 percent, how to increase employee productivity, how to improve product quality, how to cut down costs, and how to reduce the employee turnover rate.  To make such decisions correctly, managers need research, which is a systematic inquiry that provides scientific findings and conclusions to guide business decisions.  These are some of the reasons why businesses do research as identified by Jensen Zhao in “Research in Business.”
Please refer to real decision-making scenarios that illustrate the need for research in Chapter 1 of the text.
The Business Research Process
According to Zhao’s “Research in Business,” to conduct business research effectively, researchers follow a general research process of five phases and must understand their interrelationships (see Figure 1).

Figure 1
Conceptualization engages researchers in identifying a problem or topic worth studying, reviewing relevant literature to justify the need for the research, defining the purpose of the research, and phrasing the problem in writing as research questions or hypotheses, which set the scope of the research.
Research design requires that researchers transform the research concepts into operational, or measurable, terms by completing the following activities.  First, select an appropriate research method, as discussed in the previous section.  Second, determine the population of the study, its sample size, and sampling method.  Third, develop an instrument for measuring the existence, characteristics, size, quantity, and quality of the research variables with proper scales.
Research procedures in most studies consist of two common activities: reaching subjects and collecting data.  For instance, an experiment reaches subjects by putting them in either control or experiment groups to collect data, whereas a survey reaches subjects by mailing them questionnaires or telephoning them to collect data.  In addition, researchers need to indicate any limitations in the research design or procedures.
Data analysis requires researchers to sort out non-usable data, such as incomplete questionnaires or dropouts in an experiment, code and edit data to meet the computer requirements, and analyze data quantitatively or qualitatively or in combination, thereby transforming data into information, or findings, for interpretation.
Research conclusion includes discussing the significance of the findings, such as whether the hypotheses have been accepted or rejected or the research questions have been answered; addressing the theoretical, practical, or pedagogical implications; and recommending future research directions.
(Source Citation: Zhao, Jensen (2007). “Research in Business.” In Burton Kaliski (Ed.), Encyclopedia of Business and Finance, Vol. 2 (2nd ed.).  Detroit: Macmillan Reference.  4 pp. 2 vols. Gale Virtual Reference Library. Gale. LIRN. 23 July 2008)
The Role of Statistics in Business and Other Research
No doubt you have noticed the large number of facts and figures, often referred to as statistics, that appear in the newspapers and magazines you read, websites you visit, television you watch (especially sporting events), and in grocery stores where you shop.  A simple figure is called a statistic (singular).  A few examples are:
⦁ Home and condominium sales declined 6.5% in Charleston, South Carolina in April, 2006 compared to sales in April, 2005. (The Sun News, May 24, 2006).
⦁ Tuition and fees for resident undergraduate students at public four-year institutions averaged $5,491 for 2005-06, a 7.1%increase over 2004-05.
⦁ Pensacola reported the lowest cost for self-service regular gasoline in Florida at $2.74 per gallon (The Business Journal of Jacksonville, May 26, 2006).
⦁ The government reported that 138,000 jobs were added to the economy in April, 2006.
The Dow Jones Industrial Average was 11,094.04 on May 30, 2006.

Figure 2
You may think of statistics simply as a collection of numerical information.  However, statistics has a much broader meaning.
Statistics is the science of collecting, organizing, presenting, analyzing, and interpreting data to assist in making more effective decisions.  The business research process is founded on the use of statistics and statistical techniques to convert data into meaningful information.
Note that, in this definition of statistics, the initial step is the collection of pertinent information.  This information may come from newspapers or magazines, various websites, a company’s human relations director, the local, state, or federal government, universities, nonprofit organizations, the United Nations, and so on.  A few actual publications produced by the federal government and others are:
⦁ Statistical Abstract of the United States, published annually by the U.S. Department of Commerce.
⦁ Monthly Labor Review, published monthly by the U.S. Department of Labor.
⦁ Survey of Current Business, published monthly by the U.S. Department of Commerce.
⦁ Social Security Bulletin, published annually by the U.S. Social Security Administration.
⦁ Crime in the United States, published annually by the U.S. Federal Bureau of Investigation.
⦁ Vital Statistics of the United States, published annually by the National Center for Health Statistics.
⦁ United Nations Statistical Databases, available from the U.N. Statistics Division.
If the information is not available from company records or public sources, it may be necessary to conduct a survey.  For example, the A.C. Nielsen Company surveys about 1200 homes on an ongoing basis to determine which TV programs are being watched and Gallup surveys registered voters before an election to estimate the percent that will vote for a certain candidate.  These firms also sample the population regarding food preference, what features in automobiles are desirable, and what appliances consumers will most likely purchase next year.

Figure 3
Statistics is required for many college programs for three reasons.
Numerical information is everywhere.  If you look in various newspapers (USA Today, Wall Street Journal) and magazines (Time, Business Week, U.S. News and World Report, People), you will be bombarded with numerical information.  You need to be able to determine if the conclusions as reported are reasonable.  Was the sample large enough?  You must be able to read and interpret the charts or graphs.
Statistical techniques are used to make decisions that affect our lives.  Insurance companies use statistics to determine the premiums you pay for automobile insurance, the Environmental Protection Agency uses various statistical tools to determine air and water quality in your area, and medical researchers use statistical designs of experiments to evaluate the effectiveness of new drug therapies.
Knowledge of statistical methods will help you understand why decisions are made and give you a better understanding of how they affect you.  No matter what line of work you select, you will find yourself faced with decisions where an understanding of data analysis is helpful.
Please watch the Statistics in Busines Research Video on how statistics can be helpful in business research.
Steps to Make Business Statistics “Easy”
Perhaps “easy” is an overstatement; however, you may find the following hints helpful as you proceed through this course:
⦁ Use frequent, short study sessions as opposed to long, once-a-week grinds.
⦁ Read the primary learning objectives for each section so that you can define small, manageable goals for your study sessions.
⦁ Read the text assignment carefully and take notes as you proceed.
⦁ Pay particular attention to the symbols and formulas used in each section.  The symbols used in statistics are its means of communicating the information gleaned from the data.  These symbols must be understood correctly, so that the problems can be “translated” from the language of statistics into a mathematical language we can use.
⦁ Carefully review the text examples that follow the explanatory material.  These examples can be used as blueprints to solve assignments and test questions.
⦁ Complete the self-review exercises that follow text sections and check your answers (provided at the end of the chapter).
Required Presentation:
Click on the link below to view the chapter presentation.
Chapter 1

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