The Role of Research in Business Decision Making

by Suchi Moorty; Updated September 26, 2017
Reearch plays an important role in making business decisions.

Research is essential to collect facts and statistics about a company’s customers, employees and competitors. On the basis of these numbers, companies are able to make better managerial decisions. The collected statistics are organized into reports and the management team uses them to take action. A good research mechanism is essential, irrespective of the size of the company and its client base. Research is imperative for staying competitive in the market.

Significance

A business is able to make knowledgeable decisions because of research. In the research process, the company is able to obtain information about key business areas, analyze it, develop a strategy and distribute business information. Reports, provided to the top management, often include information on consumer and employee preferences and all the available routes for sales, marketing, finance and production. Management uses this information to decide the best strategy. Research is a prerequisite at all stages and phases of business operations. Initial research is required to gauge whether getting into the given type of business would be profitable and whether there is demand for the proposed product.

Function

By conducting business research, the organization ascertains what its customers want and then takes steps to prepare a product meeting those desires. Research also helps determine whether a product is accepted in the market. Research aids expansion into new markets.

Methods of Data Collection

There are two ways organizations typically collect data.

One is primary data collection from your immediate consumers, who provide feedback on your products. You can also invite customers to offer opinions on future products. To gain this information, an interviewer asks the customer to provide views on how the company can modify the existing product to satisfy his needs better. The interviewer uses surveys and questionnaires to collect and record data. This method is helpful for gaining insight about a company’s particular merchandise.

The second method is secondary data collection, which uses data that has already been printed over the Internet and in magazines and journals. This is predominantly useful in gauging the broad market scenarios.

Considerating a Consultant

Conducting research involves cost and time. The organization must weigh the pros and cons before hiring consultants to conduct research. Consultants must be made fully aware of what the organization is looking for from the research.

Advantages

The primary benefit to business research is that the organization is able to learn more about consumer choices and preferences. Research provides information on the product features that lure customers and flaws in the product or marketing that contribute to slow sales. Research helps the organization fix problems and cash in on the strengths. Research also contributes to a company’s ability to clearly identify the customer demographics and target demographic, including age, gender, monthly income of the household and educational levels. Research mitigates business risks and can help increase demand and sales.

About the Author

Suchi Moorty has vast writing experience in magazines and on various online portals. She has been associated with the print media since 2003, and is very comfortable in writing on fields such as health care, chemistry, physics, life sciences, management, human resources, finance and accounting. Moorty has a Master of Science in biology.

Photo Credits

  • doing research image by Leticia Wilson from Fotolia.com