International business research Grasple 1 (chapter 1) Flashcards
What is business research?
a systematic process of testing hypotheses through carefully executed data analyses that are aimed to help a manager solve, avoid, or minimize a problem
Why is business research a systematic process?
Business research consists of several distinct but highly interrelated stages. It is systematic because these stages are universally agreed upon.
How does business research tests hypotheses
Business research involves constructing testable hypotheses. Whether a study starts with or without constructing hypotheses, it produces the same empirical findings. In a study without hypotheses, however, these findings could be a mere coincidence, rather than contribute to the understanding of the problem
How does business research collect and analyze data?
Business research is empirical. Data can be collected in various ways, e.g., through surveys, experiments, extraction from companies’ internal databases (e.g., customer account information) or government databases (e.g., Centraal Bureau voor de Statistiek; cbs.nl), web scraping, interviews, or observations.
Intuition in managerial decision making
Intuition should never be a substitute for research. While intuition has its place in managerial decision-making (you should not ignore your instincts any more than your conscience), detached from rigorous data gathering and analysis, intuition can lead us to make less effective decisions.
cognitive biases
unconscious thinking errors. They are an attempt of our brain to simplify the complex world and speed up decision-making. These biases lead managers to misinterpret information. They negatively affect the rationality and accuracy of their decisions
three types of cognitive biases
Confirmation bias
Availability bias
All-you-see-is-all-there-is-bias
Confirmation bias
refers to the tendency to only consider information that agrees with (“confirms”) your preexisting beliefs. You cherry-pick the information you consider: you look for only the evidence that supports what you are already thinking and disregard the rest. As such, you may become a prisoner of your own prejudices.
Availability bias (also known as the availability heuristic)
refers to a cognitive bias in which you make a decision based on readily available information, even though it may not be the best information to inform your decision.
Information that is more easily recalled (i.e., is more available because it is more vivid or recent) is assumed to reflect more frequent and more probable events, while information that is more difficult to bring to mind (i.e., less available because it is less vivid or recent) is assumed to reflect less frequent and less probable events. The availability bias thus leads you to overestimate events.
What you see is all there is bias
When deciding whether there is a relationship between an event and an outcome, we tend to notice what is present but we often forget to consider what is absent. This tendency is referred to as What-You-See-Is-All-There-Is. Because of this cognitive bias, managers adopt opinions, structure businesses, and make decisions without examining all the data, which can easily lead to suboptimal decisions.
How to evaluate research evidence
As future managers, you should follow an evidence-based approach to decision-making, rather than an intuition-based approach, which may be biased.
To base your decisions on empirical evidence, you will need to read research studies. Unfortunately, not every research study is equally sound.
Judging academic-journal quality
Just because you find an academic article through an online search does not mean you should use it in your decision-making. In fact, while some journals are legitimate, others are predatory. Their sole purpose is to make money: they ask authors to publish for a fee without providing a peer review (the independent evaluation of the work by experts). They publish almost everything they receive, even complete nonsense articles.
How can you evaluate whether a journal is worthy of being considered? (for evidence)
You can check whether the articles in the journal are peer-reviewed. If they are not, the journal is likely to be predatory.
You can look up the impact factor. While this is not a perfect measure, a journal with an impact factor of at least 1.0 is more likely to be legitimate.
In the field of business, you can consult the list of quality journals compiled by TISEM.
Judging article quality within peer-reviewed journals
Within peer-reviewed journals, article quality can still vary. Many people firmly believe that a study is worthless if it is not based upon a very large, random sample of the population. However, a large sample is not always the first priority; other characteristics of a study may be more important.
Judging popular-press articles
Science journalists translate the findings of academic articles for a wider audience. Hence, in your future jobs, you may not only read business research in academic articles, but you may also encounter popular-press articles that interest you.
Most science journalists do a good job. However, sometimes a popular-press article is unreliable because it is based on flawed academic research. Do you recall the article “Chocolate Causes Weight Loss” that was published in a predatory journal? It got picked up in the popular press in more than 20 countries!
In other instances, a popular-press article is unreliable because it did not describe the underlying academic article accurately; it did not get the story right.
