Research is how individuals and businesses collect and analyze data. Accurate and relevant research guides key business decisions, including marketing plans, staffing decisions and expansions, and critical data, like environmental impacts, health care, and social characteristics. Determining what data is most useful for your goals and finding the most effective ways to obtain it can help your company make successful long-term decisions.
Why is research important in business?
Research plays different roles in business, depending on why it’s conducted and what will be the action taken. Research can help you to:
- Identify potential and new customers
- Understand current customers
- Establish pragmatic goals
- Develop productive market strategies
- Address business challenges
- Build a business expansion plan
- Identify business opportunities
Types of research
Fundamental and applied research are the two main research categories. Most research types can be traced back to being fundamental or applied, depending on the study’s goals.
Fundamental, also known as basic or theoretical, research is designed to help researchers better understand certain phenomena in the world. It looks at how things work but does not seek to find how to make them work better. This research attempts to broaden your understanding and expand scientific theories and explanations.
Example: A company studies how different product placements affect product sales. This study provides information and is knowledge-based.
Applied research is designed to identify solutions to specific problems or find answers to particular questions. It offers knowledge that is applicable and implementable.
Types of applied research include:
- Technological: This research looks for ways to improve efficiency in products, processes and production.
- Scientific: This research measures certain variables to predict behaviors, outcomes and impact.
Example: A student working on a doctorate in education studies ways to increase student involvement in the classroom. This research focuses on a defined problem and is solution-based.
Action research refers to examining actions, assessing their effectiveness in bringing about the desired outcome and choosing a course of action based on those results. It is typically used in educational settings for teachers and principals to perform a type of self-assessment and course correction.
Example: A teacher collects data about their methods of teaching fifth-grade math. At the end of the first school quarter, they discovered only 33% of students demonstrated proficiency in the concepts. As a result, the teacher implements new methods for the second quarter.
Causal research, also called explanatory research, seeks to determine cause and effect relationships between variables. It identifies how much one variable may cause a change in the other. Causal research is important for evaluating current processes and procedures and determining if and how changes should take place.
Example: A business studies employee retention rates before and after instituting a work-from-home policy after six months of employment to see if the approach increases employee retention.
Classification research seeks to identify and classify individual elements of a group into larger groups or subgroups.
Example: Researchers study an animal species, placing them in defined categories based on shared characteristics, such as:
- Body segmentation
- Type of habitat
- Reproductive methods
Comparative research identifies similarities and differences between two individuals, subjects or groups.
Example: A business owner reviews new hire training documentation and discovers that new employees receive much of the same information at orientation and in their initial departmental training. The owner incorporates materials into one session to allow more time for department-specific training.
Cross-sectional, or synchronous, research studies a group or subgroup at one point in time. Participants are generally chosen based on specific shared characteristics, such as age, gender or income, and researchers examine the similarities and differences within and between groups. The group is often used as a representation of a larger population.
Example: A company researches the sales techniques of its top 10% of salespeople and compares them to those of its bottom 10%. This gives the company insights into the most successful and least successful sales methods.
Deductive, or theory-testing, research is the opposite of inductive research and moves from the broad to the specific. Researchers choose a hypothesis and test its accuracy through experimentation or observation.
Example: Researchers observed that 12 international corporations enacted in-house carbon emissions standards in the same year. They use deductive research to compare global emissions levels before and after the measures were enacted.
Exploratory research examines what is already known about a topic and what additional information may be relevant. It rarely answers a specific question but instead presents the foundational knowledge of a subject as a precursor to further research. Often, exploratory research is applied to lesser-known issues and phenomena.
Example: You may consider what is currently known about the success of yearlong maternity and paternity leave programs. Your research includes gathering all relevant information and compiling it in an accessible format that wasn’t available previously. Your findings may reveal gaps in knowledge, leading to additional studies in the future.
Field research occurs wherever the participants or subjects are or “on location.” This type of research requires onsite observation and data collection.
Example: A manufacturing plant hires an environmental engineering firm to test the air quality at the plant to ensure it complies with federal health and safety requirements. The researchers travel to the plant to collect samples.
Fixed research involves procedures determined ahead of time, such as how often testing will take place, where it will take place, the number of subjects and their types. The research depends on precise conditions and compliance with predetermined protocols to reduce variables. Experimentation is often fixed research.
Example: A researcher wants to test how different labels affect consumers’ ratings of a sports drink. Participants are given the same drink with various labels at the same time and take a survey about taste and overall impressions. The timing of providing each drink and the subsequent surveys are critical to the study’s validity.
Flexible research allows procedures to change throughout the course of the experiment. The different types of flexible research include:
- Case studies: Case studies are in-depth analyses and observations about a specific individual or subject.
- Ethnographic studies: Ethnographic studies are in-depth analyses and observations of a group of people.
- Grounded theory studies: Grounded theory studies are designed to develop theories based on carefully collected and analyzed data.
Example: A physician uses a case study methodology to follow a patient through symptoms, treatment and recovery.
Inductive research, also known as theory-building research, collects data that may help develop a new theory about a process or phenomenon. It examines observations and patterns and offers several hypotheses to explain these patterns. Inductive research is often the first step in theory generation and may lead to additional research, such as deductive research, to further test possible hypotheses.
Example: Researchers observed that worldwide emissions declined when 12 international corporations enacted in-house carbon emissions standards in the same year. The researchers theorize that worldwide emissions can be reduced significantly if international corporations impose in-house emissions standards.
Laboratory research occurs in a controlled laboratory rather than in the field. Often, the study demands strict adherence to certain conditions, such as eliminating variables or timing conditions. Laboratory research includes chemical experimentation and pharmacological research.
Example: A pharmaceutical company researches a new drug formula to determine if it would benefit diabetes patients. Researchers closely monitor chemical interactions in laboratory settings before moving to the next step.
Longitudinal research focuses on how certain measurements change over time without manipulating any determining variables. Types of longitudinal research include:
- Trend study: Research examines population characteristics over time.
- Cohort study: Research traces a subpopulation over time.
- Panel study: Research traces the same sample over time.
Example: A researcher examines if and how employee satisfaction changes in the same employees after one year, three years and five years with the same company.
Mixed research includes both qualitative and quantitative data. The results are often presented as a mix of graphs, words and images.
Example: A car manufacturer asks car buyers to complete a survey after buying a red or white sedan. Questions focus on how much the color impacted their decision and other opinion-based questions.
Policy research examines the effects of current government or social policies or predicts the potential effects of proposed policies related to the distribution of resources.
Policy researchers often work within government agencies and conduct the following types of studies:
- Cost analysis
- Cost-benefit analysis
- Program evaluation
- Needs analysis
Example: An agency may research how a policy for vaccine distribution will affect residents in rural areas. The outcome may change where the government sets up free shot clinics.
Qualitative research involves non-numerical data, such as opinions and literature. It uses descriptions to obtain the meanings and feelings involved in a situation. Businesses often use qualitative research to determine consumer opinions and reactions.
Examples of qualitative research may include:
- Focus groups
- Participant comments
Example: A marketing organization presents a new commercial to a focus group before airing it publicly to receive feedback. The company collects non-numerical data—the opinions of the focus group participants—to make decisions.
Quantitative research depends on numerical data, such as statistics and measurements, to investigate specific questions, like who, what, where or when. The results are usually presented in tables or graphs.
Types of quantitative methods include:
- Survey research
- Descriptive research
- Correlational research
Example: A car manufacturer compares the number of sales of red sedans compared to white sedans. The research uses objective data—the sales figures for red and white sedans—to draw conclusions.