The world has changed. We have progressed from the “Industrial Age” to the “Information Age”. In this age, the need for well-researched information has become paramount.
The growth rate of businesses internationally has been phenomenal. This is due to the use of technology coupled with timely access to information. The success of most businesses is rooted in the five pillars of effective management which include planning, organizing, staffing, directing and controlling. To effectively carry out these functions in today’s business environment and face globalization, information is critical to managers and business owners. It may be the determining factor between success and failure.
Today, information is critical to all aspects of managing or creating a successful business. Profit is a moving target in a perfectly competitive market environment. In our current market, consumers are faced with innumerable choices. However, armed with information to make these choices, they can ensure greater value for their money spent.
Therefore, if consumers are well-informed and making informed choices, it means that astute business managers must also be informed and carry out their duties efficiently.
Achieving the required level of efficiency to survive in the current business environment can no longer be done purely on the basis of tradition, experience, and authority. Instead, it must be based on reliable, accurate, and timely information that provides extensive insight into both consumer needs and internal organizational needs. This allows for calculated decision-making that impacts business profit maximization efforts and enables survival in today’s dynamic business environment. As a result, information is a highly valued commodity for businesses worldwide.
The value of a commodity undoubtedly increases with increased demand, ‘ceteris paribus’ (John Solomon, 2010). Therefore, one of the crucial decisions that managers face is whether the cost of information is worth the investment risk. Managers must also calculate the expected monetary value derived from research to determine its relevance to the decision at hand. How is this valuable information obtained?
Business Research is the principal provider of critical information that allows managers and business owners to make calculated decisions that will propel businesses in the right direction for success.
So, what is business research? According to Zikmund et al 2010, 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 ideas, monitoring performance, and understanding the business process.
Davis (2000) postulates that business research is a systematic, controlled, empirical, and critical investigation of phenomena that are of interest to managerial decision makers. It is a process of planning, acquiring, analyzing, and disseminating relevant data and information to guide managerial decisions. Business research provides insights to decision makers in ways that mobilize the organization to take appropriate actions. The ultimate goal is to maximize business performance.
Business research encompasses a variety of different types of projects. According to the definitions provided, this type of research utilizes scientific methods to help entrepreneurs and senior management define, understand, and identify business opportunities. Additionally, it serves as a foundation for new ideas and provides a greater understanding of the processes involved in business operations, ultimately leading to greater success in businesses.
Although not all business research will lead to great success stories, it plays an integral role in the decision-making process. This helps minimize the risk of loss and enhances opportunities for success. Therefore, it can be said that business research is costly but highly valued in the international context. Businesses that use this scientific tool can benefit greatly from the information it provides.
Business research can be an expensive exercise, but it is essential for the development of businesses in Jamaica. I disagree with the statement that it yields little or no value. Business research helps companies make informed decisions and identify opportunities for growth.
For example, a local restaurant owner may conduct market research to determine what types of cuisine are popular in their area. This information can help them create a menu that appeals to their target audience and increase customer satisfaction.
Personally, I have seen the benefits of business research in my own career. As a marketing manager, I conducted research on consumer behavior to develop effective advertising campaigns. This led to increased sales and brand awareness for my company.
In Jamaica, applied business research has been used successfully by companies such as GraceKennedy and Digicel to expand their operations both locally and internationally. Without this type of research, these companies may not have been able to identify new markets or develop innovative products.
Jamaican businesses need research because it allows them to stay competitive in an ever-changing market. By understanding consumer needs and preferences, companies can adapt quickly and effectively.
The risk Jamaican businesses face by disregarding business research is significant. They may miss out on opportunities for growth or fail to address emerging trends in their industry. Ultimately, this could lead to decreased profits and even failure.
After completing this step, we can either agree or disagree with the premise presented to us. The Nature of Business Research and its Impact on Businesses is explained by Zikmund, Babin, Carr, & Griffin (2010). They state that the purpose of research is to provide managers and business owners with knowledge about various aspects of their business such as market trends, economic conditions, government regulations, or any other areas of uncertainty that may affect their operations. Reliable business research can answer questions like What kind of training do I need to provide my employees?” or “Will I be able to secure funding for this project?” within an organization.
Business research encompasses all marketing, financial, and organizational behavior research activities that support executive decision-making. Although alternative methods may be used due to cost considerations, insufficient time, or management’s belief that enough is already known, the ultimate goal of research is to provide accurate information that reduces uncertainty in managerial decision-making.
The use of alternative methods may sometimes yield success, but consistently making business decisions without conducting research will ultimately result in losses. The ultimate objective of research is to provide precise and impartial information to support decision-making processes. The data collection process must be clear and systematic, and the data should be carefully analyzed while adhering to research ethics. The rigor of the analysis forms the basis for determining the validity of the information (Greener, 2008). Business research has a significant impact on businesses.
Valid information is critical to the success of a business. Inaccuracies can lead to poor investment decisions, which few businesses have the finances to recover from. This is one of the main reasons why businesses fail. Investing in ventures with limited information poses a huge financial risk, and only a few have successfully done so. If a company is market-oriented, its focus should be on providing value to its customers and increasing customer retention and market share.
Therefore, research for this company will focus on gathering correct information about customers’ needs, beliefs, and attitudes. This way, the company will be better able to meet these needs and quickly adjust to changes in the market (Zikmund, Babin, Carr & Griffin, 2010). Consequently, the business can increase revenue and maximize profits. Business research allows managers to keep abreast of market changes and avoid financial disasters.
Effective and reliable business research is crucial in identifying problems or opportunities, diagnosing and assessing them, selecting and implementing a course of action, as well as evaluating the results. By addressing these key areas, businesses can avoid making irrational decisions that may lead to their demise. However, it is important to consider the timely use of information gathered since market conditions can change quickly and render the information invalid.
In most economies, time lags between the implementation of strategies or action plans and their development cause severe damages to businesses and governments alike (John Solomon, 2010). Thus, if not used accurately and in a timely manner, research that could have resulted in success can actually result in losses. Business research also assists businesses in acquiring funds to finance their activities. This includes identifying the most appropriate lending institution and providing necessary information to secure financing.
Many growing businesses face cash flow problems that can cause failure, even if the business is profitable. However, armed with important information, managers can seek financing and keep their businesses profitable. Business research is not a prominent feature in Jamaican business culture, contrary to what is happening on the international scene. This does not mean that it is not being employed at all, but rather that it is underutilized by a wide cross-section of the island’s businesses.
Most of the research conducted on the islands has not been focused on business development, but rather on applied sciences. This is evident in the oldest research center in Jamaica, the Scientific Research Council (SRC). As a result, the country is currently trying to catch up with international standards since many businesses in Jamaica view business research as a last resort instead of a primary option when making decisions. While alternative methods have brought them this far, it is now necessary for them to adopt business research into their culture.
Local businesses have recently shown interest in business research, mostly in response to new companies entering the market who have already conducted their own research and pose a threat to their survival. It is important to note that the University of the West Indies (UWI) is celebrating its 64th year of existence this year. In 1998, during its 50th year, UWI hosted its first Research Day to recognize the importance of research and increase awareness. However, it seems that local businesses are just now catching on to this phenomenon.
Major businesses, such as Jamaica National Building Society and Grace Kennedy Inc., have greatly benefited from conducting business research. Richard Kelly of the Planning Institute of Jamaica reports that the government has increased expenditure on Research & Development (R&D) from 0.1% to 0.3% of GDP, representing a 57% increase from 2001 to 2004, in an effort to improve the shortage of research in the country. However, it is evident that this is not enough as businesses continue to fail.
The Planning Institute of Jamaica’s records, as reflected in the Economic and Social Survey 2010 Table 13.2, show that there were 6,920 registered micro-enterprises and 3,541 small businesses based on the GCT returns filed at the end of 2010. In the previous year, there were 10,671 micro-enterprises and 3,662 small businesses. These cover a wide cross-section of businesses ranging from agriculture to financial services to government services. This means that within one year, approximately 3,751 micro-enterprises went out of business.
There are several reasons for the lack of success in Jamaican businesses, including a lack of funding and a lack of business research. However, proper business research could have solved or mitigated all other underlying issues. In the Jamaican business environment, business research is mostly applied in the area of marketing and is primarily done for existing businesses. It’s important to note that the few Jamaican companies that have employed these aspects have enjoyed success, such as Courts Jamaica Ltd.
In today’s global, dynamic, and competitive business environment, the market can no longer be defined in a geographic context. Therefore, the utilization of scientific tools such as business research in the Jamaican business community will aid in the economic development of the country while also reducing unemployment and poverty levels. While this may seem like a broad statement, it is important to consider Jamaica’s economic status and poverty levels.
In 2004, Jamaica’s unemployment level averaged approximately 15%, which represents an impediment to poverty reduction (Salmon, 2004). In 2010, then-Prime Minister Bruce Golding spoke about the increase in the country’s poverty levels. In 2008, it was at 12.5%, but it rapidly increased in 2010 to 16.5%, the highest level recorded since 2004 (Jamaica’s Poverty Levels Increase, 2010). The unemployment levels vary according to parish, and Dr. Salmon postulates that since the socio-economic realities of each parish are unique, the approach to alleviate the situation must vary accordingly.
It stands to reason that research is the most viable option to provide the wealth of information necessary for creating widespread change. Micro Businesses offer a means for reducing unemployment levels and already contribute significantly. Dr. Salmon also postulates that since it is generally agreed that Micro Businesses offer great potential for economic development by providing employment across Jamaica, it is only wise to improve the application of science and technology in this sector.
It means that if business research is applied in this sector and the information gathered is utilized to increase growth, then unemployment levels would decrease, and with it, the nation’s poverty levels. Dr. Salmon also suggests that the consensus among development experts is that science and technology, if properly introduced in a country, are one of the most powerful tools available to spark sustainable development in developing countries.
It follows, then, that if business research is appropriately applied to the micro-business sector, it could become a major force in creating new employment opportunities, particularly for the poor. This would also lead to the development of new products and services that would contribute to economic growth. Businesses in Jamaica can benefit from applying business research on an individual basis by acquiring market share and enabling them to compete on the international scene.
Technology has brought international competition as well as international markets to businesses’ doorsteps. To remain viable, they need to adopt a more calculated way of operating. Business research is the ultimate tool to assist them in this venture. It will provide them with information on requisite staffing, financing, product line, market niche, and image that will allow them to increase revenues and compete effectively while avoiding financial pitfalls and poor investment choices such as marketing the right product to the wrong target market or applying the wrong solutions to declining sales.
Digicel Jamaica Limited, although not Jamaican-owned, has made Jamaica its home. Based on proper business research, Dennis O’Brien (owner of Digicel) made an informed investment decision to enter the Jamaican telecommunications market in April 2001. The company gained 100,000 customers in just 100 days after its entry and increased their customer base to over 2 million users island-wide within ten years.
Today, Digicel proudly covers 70% of the country’s telecommunications market share and provided 5500 jobs locally in 2008. This company has made giant strides in the industry, demonstrating the astronomical effects of applying business research. Jamaican businesses can learn from this lesson. Local companies such as Mother’s Patty Company could experience growth by conducting necessary research and even expand internationally. Not investing in business research poses risks for Jamaican businesses.
Companies in Jamaica that fail to invest in and act upon the information provided by business research will continue to pay dearly. These companies will make poor investment decisions due to a lack of or poor information. Westmoreland Co-operative Credit Union Ltd. is a case in point as they invested in the micro-financing sector without conducting the necessary research and experienced losses amounting to over one hundred million dollars of their members’ money. Furthermore, competition can erode market share, causing companies that were once market leaders to find their positions drastically changed.
In 2001, Digicel entered the market and Cable & Wireless Jamaica, who was the dominant player at the time, chose to rely on alternative methods for business research. As a result, they could not withstand the forces of competition and Digicel now dominates the Jamaican Market. With the right information enhanced by technology, small hotels and guest houses can tailor their images for target markets and gain market share internationally.
Not every visitor to Jamaica can afford super all-inclusive hotels, and it’s important to remember that vacations aren’t just for the wealthy. Conducting market research is the only way to determine if offering more affordable options is a viable choice. Without doing so, businesses risk missing out on opportunities for growth and increased revenue. This applies not only to hotels but also to other service industries such as restaurants, which could potentially become major food chains, or fashion designers who could gain international recognition. Failure to conduct proper research can result in smaller businesses being unable to access loans from financial institutions.
This is a sore point in the micro-financing sector. As a field officer for JN Small Business Loans Ltd., the leading microfinance company in Jamaica, I provide funding to small businesses in Hanover. Unfortunately, it has been my experience that many loans are denied daily simply because individuals did not do the necessary research and cannot represent themselves well to procure the loan. They lack an understanding of their own business processes, are unable to formulate a business plan, project sales and income, or define their market.
Many businesses in Jamaica lack the knowledge to take their operations to the next level, even if they are currently making a profit. This deficiency in business research has resulted in numerous start-up failures that were funded by the company. In fact, after conducting a review of its BizStart product in April 2010, the company decided it was prudent to remove it from its list of offerings.
There are several reasons why businesses may choose not to invest in business research.
Business research is a highly valued but expensive commodity, posing a challenge for most Jamaican businesses. While major corporations in Jamaica have invested heavily in research, they do not represent the majority of Jamaica’s business community. As of 2010, there were 14,333 registered micro and small businesses island-wide (PIOJ, 2010), comprising a significant portion of the Jamaican business landscape. Unfortunately, these businesses lack the financial resources to conduct necessary research to propel their growth.
Despite the great value that business research would bring to these businesses, they prefer to rely on alternatives such as experience, tradition, and authority to make decisions for the future of their businesses. Even those who can afford some measure are hesitant due to the expense of procuring necessary information. According to Kelly, research and development in the private sector is relatively weak with few firms having the confidence to carry out significant research.
Apart from the cost of business research, another concern is the time required to carry out the research. At times, the opportunity to invest does not lend itself to research. As a result of time constraints, management may choose to invest based on their respective experience or trends.
“Systematic research takes time. In many instances, management believes that a decision must be made immediately, allowing no time for research. The urgency with which managers usually want to make decisions conflicts with researchers’ desire for rigor in using empirical data.” (Zikmund, Babin, Carr & Griffin, 2010).
Another contributing factor to the challenges faced by small businesses in Jamaica is the lack of proper management skills. Many Jamaican entrepreneurs start their businesses on impulse, without sufficient preparation or training in management. As a result, they often lack the necessary skills to effectively manage their investments. This means that important pillars of management such as planning, organizing, staffing, directing and controlling are either non-existent or highly underutilized.
Without a solid foundation in these essential areas of business management, entrepreneurs may not fully appreciate the value of research as an important tool for success. If one does not understand a concept or is unaware of its benefits, they are less likely to utilize it effectively.
Recommendations and Conclusions
It is evident that despite the great value that business research brings to the table, the majority of Jamaican businesses cannot afford it. However, this does not mean that it does not add or will not yield value to the business community. What it means is that greater collaboration is needed among small businesses in an effort to move forward. In unity, there is strength and what one is unable to accomplish as a team becomes possible.
Therefore, small businesses need to come together as a unit where possible to create greater possibilities (Salmon, 2004).
The research and development centers in Jamaica that focus on the small business sector need to be developed, and additional funding should be provided to them so they can meet the demands of the nation. The Jamaica Business Development Corporation is a case in point, and some are still unaware of the services they offer to aid business growth in Jamaica. Non-financial services such as technical support and training are not adequately provided for in Jamaica. According to Salmon, these services are very poor or non-existent in urban and rural areas.
Salmon recommends the following:
- Additional funding from the Government and private sector in Jamaica will be provided to make non-financial services available to the small business community.
- Small and micro-business incubators will be established to provide entrepreneurs with hands-on experience.
- Funding dedicated to research and development will be established.
- A transparent process for accessing these funds provided for R&D in the micro and small business sector will also be established. Business research is an important tool that can greatly enhance the development of Jamaica’s businesses.
It cannot be denied that business research can be expensive, but there are ways to overcome this obstacle through collective effort. Despite the cost, it cannot be deemed unnecessary for the Jamaican business community due to the benefits that come from conducting proper research. Therefore, based on this premise, one must strongly disagree with the notion that business research yields little or no value for Jamaica’s businesses. On the other hand, it is agreed that it can be expensive, but the benefits outweigh the costs.
Bibliography
- Jamaica’s Poverty Levels Increase. (2010, October 11). Retrieved February 20, 2012, from RJR News: http://rjrnewsonline.com/business/jamaica%E2%80%99s-poverty-levels-increase
- Davis, D. (2000). Business Research for Decision Making, Fifth Edition.
- Duxbury, George J.M., & Jones, G.R. (2012). Understanding and Managing Organizational Behaviour. Harlow, Essex: Pearson Education Limited.
- Greener, S.D. (2008). Business Research Methods. Ventus Publishing Apps.
- John Solomon K.H. (2010). Economics for Business. Fifth Edition. London: Prentice.
