Business Research in Jamaica - Marketing Essay Example
Contents Introduction2 The Nature of Business Research and its Impact on Businesses4 How Business Research Impacts Businesses4 Business Research in Jamaica6 Why Jamaican Businesses Needs Research7 Risks Jamaican Businesses face by not Investing in Business Research9 Reasons Businesses in Jamaica fail to Invest in Business Research11 Recommendations and Conclusions12 Bibliography13 Introduction The world has changed; we have progressed from the “Industrial Age” and now to the “Information Age” - Business Research in Jamaica introduction. In this age the need for well researched information has become paramount.
The growth rate of businesses internationally has been phenomenal and this is has resulted from the use of technology coupled with the timely use of information. The success of most businesses is rooted on the five pillars of effective management which includes: planning, organizing, staffing, directing and controlling. To effectively carry out these functions in today’s business environment in the face of globalization, information is critical to managers and business owners and may be the determining factor between success and failure.
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Information today is critical to all the tenets of managing or creating a successful business as profit is a moving to target in a perfectly competitive market environment. In our current market environment consumers/customers/clients are faced with innumerable choices however, armed with information to make these choices they can to a greater extent ensure greater value for money spent. Therefore, if the consumers are armed with information 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 but, on the basis of reliable, accurate and timely information; that will give them an extensive insight into not only the needs of consumers but the internal needs of the organization. This allows for calculated decision making that will impact the business profit maximization efforts and survive the dynamics of today’s business environment. Consequently, information is a highly valued commodity to businesses worldwide.
The value and the increased demand placed on any commodity will undoubtedly increase its price ‘cetris paribus’ (John Solomon, 2010). Thus one of the important decisions managers will now be faced with is, “Does the cost of the information worth the risk of investing without the information? ” It also means that the expected monetary value to be derived from the information provided by the research must also be calculated by mangers to determine its value to the decision at hand. How is this highly valued information garnered?
Business Research is the principal provider of critical information that allows managers and business owners to make calculated decisions that will propel businesses into the right direction for success. Therefore 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 the systematic, controlled, empirical, critical investigations of phenomena of interest to managerial decision makers. According to Answerbag. com -Business research is a systematic inquiry that provides information to guide managerial decisions. More specifically, it is a process of planning, acquiring, analyzing, and disseminating relevant data, information, and insights to decision makers in ways that mobilize the organization to take appropriate ctions that, in turn, maximize business performance. A variety of different types of research projects are grouped under the label ‘business research’. Therefore according to the above stated definitions business research uses scientific methods to assist entrepreneurs and senior management in defining/ understanding and also identifying business opportunities. It also facilitates the basis for new ideas and open a greater understanding of the processes involved in business operations that will allow for greater successes in businesses.
This is not saying however that all business research conducted will evolve into great business success stories but that it plays an integral role in the decision-making process that will minimize the risk of loss and enhance the opportunities for achieving success. On this premise it can be said that business research is costly but is highly valued in the international context and that businesses using this scientific tool can benefit greatly from the information it provides. The issue at hand is as follows: Business Research is an expensive exercise which according to some business practitioners will yield little or no value to businesses development in Jamaica. Using relevant examples including personal experiences please state the extent to which you agree or disagree with this statement? ” To agree or disagree one must understand the nature of business research and how it impacts businesses, the context of applied business research in Jamaica and its history, why Jamaican business needs research, and the risk these Jamaican businesses face by disregarding business research.
Having done this then can disagree or agree on the premise set before us. The Nature of Business Research and its Impact on Businesses According to (Zikmund, Babin, Carr, & Griffin, 2010), The basis of research is to provide managers /business owners with knowledge regarding the business in terms of the market, economy, government regulations, or any other area of uncertainty that may affects the business. Questions ranging from “What kind of training do I need to provide to empower my employees? ” to “Will I be able to source funding for this project” are questions answered by reliable business research within an organization.
Therefore business research encompasses all marketing research activities, financial research, organizational behavior research and all other research activities that supports executive decision making. Decision is often made using the alternative methods to business research for reasons such as; cost considerations, insufficient time to conduct research, or management’s belief that enough is already known but, the ultimate goal of research is to supply accurate information that reduces the uncertainty in managerial decision making.
The alternative methods will at times be successful but business decisions consistently made without research will eventually lead to losses. The ultimate goal of research is to supply accurate and unbiased information to support decision-making processes. The data collected must be collected in a clear and systematic way and the data should be analyzed carefully employing research ethics as the rigor of the analysis will form the basis of whether the information is valid or not (Greener, 2008). How Business Research Impacts Businesses
Valid information is critical to a business success. According to Greener 2008, inaccuracies will lead to poor investment decisions. Not many businesses have the finances to bounce back from investment errors and this is one of the main reasons businesses fail. By making investments into ventures with limited information business take huge financial risk and only a few have done it successfully. If a company is market oriented then the focus is on the value it will bring to its customers and customer retention and increasing market share.
It therefore means that research for this company will focus and gathering correct information on the customer’s needs, beliefs and attitudes will be better able to meet these needs and quickly adjust to the changes in the market (Zikmund, Babin, Carr, & Griffin, 2010). Consequently, the business will increase revenue and allow for profit maximization. Business research allows for managers to keep abreast of changes in the market and assist in avoiding financial disasters.
Effective and reliable business research assists in key areas such as identifying problems or opportunities, diagnosing and assessing problems or opportunities, selecting and implementing a course of action, evaluating the course of action. Once these key areas are dealt with it is highly unlikely that the business will make irrational decisions that will lead to its demise. In saying this however timely use of the information gathered must be considered as the market conditions can change and render the information invalid and this is cause for concern.
In most economies time lags between implementation of strategies or action plan and their development cause severe damages to business and government alike (John Solomon, 2010). Thus if not used accurately and in time the research that could have resulted in success can in fact result in losses. Business research also assists in businesses acquiring funds to finance its business activities; not only in terms of identifying the most appropriate lending institution, but to also provide the information necessary to the lending institution so that the will provide the much needed financing for the business.
This so as many growing businesses face cash flow problems that may cause failure even in a profitable business. However armed with an important resource as information the manager will be able to seek financing and keep the business profitable. Business Research in Jamaica Business research is not a prominent feature in the 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 islands research had not been focused on business development but mostly on applied sciences as its oldest research center the Scientific Research Council of Jamaica (SRC) will attest to. Consequently, the country is at a stage where it is trying to catch up with the international scene as many businesses in Jamaica viewed business research as a last resort and not necessarily the first option when making business decision. The alternatives to research methods have brought them thus far and they now need to adopt business research into its culture.
Business research has caught the eyes of some local businesses but mostly in reaction to companies coming into the local market who have already done their research and as such poses a threat to their viability. An important point to note is that the University of the West Indies (UWI) celebrates 64 years of existence this year and in 1998, 14 years ago in its 50th year UWI hosted its first research day in recognition of the importance of research and in a bid to increase awareness; suggesting it is a new phenomenon to local businesses.
Major businesses however such as Jamaica National Building Society, Grace Kennedy Inc. and others have used business research and has benefitted greatly. According to Richard Kelly of the planning institute of Jamaica the Government has increased expenditure on Research & Development (R&D) from 0. 1 per cent of GDP to 0. 3 representing a 57 per cent from 2001 to 2004 in an effort to improving the shortage of research in the country. It is however evident that this is not enough as businesses continue to fail.
The planning institute of Jamaica, records reflects in the Economic and Social survey 2010 table 13. 2 that at the end of 2010 there were 6920 registered micro enterprise and 3541 small business based on the GCT returns filed. While in the previous year there was 10671 micro enterprises and 3662 small businesses these covers a wide cross section of businesses ranging from agriculture, financial services to Government services. It therefore means that within one year 3751 micro enterprise went out of business.
There are several reasons including lack of funding but there is also the lack of business research. All other underpinning reasons could have been solved or mitigated by proper business research. Business research is mostly applied in the area of marketing in the Jamaican business environment and this is mostly done for existing businesses. It is important to note though that the few Jamaican companies that have employed these aspects have enjoyed success such as Courts Jamaica Ltd. Why Jamaican Businesses Needs Research
In this current global, dynamic and competitive business environment where the market place can no longer be defined in a geographic context the utilization of a scientific tool such as business research in the Jamaican business community will aid in the economic development of the country and will also reduce our unemployment and poverty levels. This is a very broad statement and my seem superfluous, but take into consideration the facts concerning the country’s economic status and poverty levels.
In 2004 Jamaica’s unemployment level averaged at approximately 15% and represents an impediment to poverty reduction (Salmon, 2004). In 2010 then Prime Minister Bruce Golding spoke on the increase in the country’s poverty levels; in 2008 it was at 12. 5% but 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 the since the socio-economic realities of each parish is unique then the approach to alleviate the situation must vary accordingly.
It therefore stands to reason that research is the most viable option to provide the wealth of information necessary to create such widespread change. Micro Businesses provides a means for the reduction in the unemployment level and already contributes significantly. Dr. Salmon also postulates that since it is generally agreed that Micro Business offers great potential for economic development by providing employment across Jamaica then it is only wise that the application of science and technology be improved in this sector.
Table 1 Select examples of micro-business employment (2003) Agency# of Active Loans# of Jobs Created Jamaica National6,8739,596 Micro Enterprise Financing5791489 (estimated) Mida1,5983665 Self-Start Fund206n/a NCB Reproduced from (Salmon, 2004) The above table shows the number of jobs created by small businesses in Jamaica from data collated from selected financial companies in an effort to show the contribution of the micro enterprise to unemployment.
It therefore means that should business research be applied in this sector and the information garnered be utilized to increase growth it follows that the unemployment levels would decrease and with it the nation’s poverty levels. Dr. Salmon also postulates that “the consensus among development experts is that science and technology if properly introduced in a country, is one of the most powerful tools available to spark sustainable development in the developing countries of the world.
It follows then, that if business research is appropriately applied to the micro business sector, the sector would be a major force in the creation of new employment opportunities, particularly for the poor. It would also lead to the development of new products and services, which would contribute to economic growth” Businesses in Jamaica would benefit from the application of business research on an individual basis in terms of acquiring market share and also enable them to compete on the international scene.
Technology has brought international competition as well as international markets to their doorstep and they need to adopt a more calculated way of operating in order to remain viable. Business research is the ultimate tool to assist them in this venture, it will provide them with information on the requisite staffing, financing, product line, market niche, and image that will allow them to increase revenues, remain viable and compete effectively. In doing so, they will also avoid financial pitfalls, poor investment choices e. g. arketing the right product to the wrong target market, or applying the wrong solutions to the problem of declining sales. Digicel Jamaica Limted though not a Jamaican owned Company has made Jamaica its home, based on information gathered from 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 100 days of its entry and in ten years increased their customer base to over 2million users island wide.
Today, Digicel proudly covers 70% of the country’s telecommunications market share and at 2008 provided 5500 jobs locally. This company has made giant steps in the industry and as such has shown us the astronomical effects of the application of business research. It is a lesson to be learnt by the Jamaican businesses. There are local companies such as Mother’s patty company who could have and can still experience growth by conducting the necessary research and may even spread their wings on the international scene. Risks Jamaican Businesses face by not Investing in Business Research
Companies in Jamaica who fail to invest in and act upon the information provided by business research will continue to pay dearly for this. These companies will continue making 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 a micro financing sector without investing in the requisite research necessary and experienced losses amounting over one hundred million dollars of their members’ money. Additionally, market share can be eroded by competition and companies that were once market leaders will find their positions drastically changed.
This was the case for Cable &Wireless Jamaica in 2001 when Digicel entered the market. At the time, Cable & wireless was the dominant player in the market they chose to rely on the alternatives methods to business research and could not withstand the forces of the competition and as purported earlier Digicel now dominates the Jamaican Market. It also follows that with the right information enhanced by technology small hotels and guest houses will be able to gain market share internationally if they can tailor their images for the right target markets.
After all not every visitor to Jamaica can afford the super all inclusive hotels and not only the rich take vacations. The only way to find out if this is a viable option is through market research and not doing so they will find that they have lost opportunities to expand and increase revenue. The same can happen to any service industry in the local market such as restaurants which could become major food chains, fashion designers who could become internationally renowned. Lack of business research result in businesses especially the smaller ones being unable to access loans from financial institutions.
This is a sore point in the micro-financing sector. As a field officer who provides funding to small businesses in Hanover on behalf of JN Small Business Loans Ltd. the leading Micro finance company in Jamaica, it has been my experience that a number of loans are denied on a daily basis simply because the individuals did not do the requisite research and as such cannot represent themselves well to procure the loan. They lack the understanding of their own business processes, are unable to formulate a business plan, unable to project their sales and income and cannot define their market.
They therefore lack the knowledge to move their businesses to the next level even though they are currently experiencing profit. This lack of business research also resulted in many failures of start-up businesses which were funded by the company to the extent that in April 2010 the company upon conducting a review of the BizStart product found it prudent to remove it from its list of products offered. Reasons Businesses in Jamaica fail to invest in Business Research There are several reasons businesses may choose not to invest in Business Research.
As purported earlier business research is a highly valued but an expensive commodity and therein lies the challenge for most Jamaican businesses. Though major corporations in Jamaica have the resources and have invested heavily in research they really do not represent the majority of Jamaica’s business. Jamaica as at 2010 had 14333 registered micro and small businesses island wide (PIOJ, 2010). This represents a very large part of the Jamaican business community. These businesses lack the financial resources to carry out the necessary research needed to push the businesses forward.
Subsequently, despite the great value that business research would bring to these businesses they prefer to rely on the alternatives such as experience, tradition and authority to make decisions for the future of their businesses. Even those who are able to afford some measure are hesitant to do so as a result of the expense to procure the necessary information. According to Kelly, Research and Developement in the private sector is relatively weak with few firms having the confidence to carryout 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 and 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 the empirical data. (Zikmund, Babin, Carr, & Griffin, 2010). Another contributing factor is the lack of proper management skills. Most Jamaican small business entrepreneurs created there business on an impulse, therefore the management skills to support the investment is sadly lacking. Since this is so it means the five pillars of management is non-existent or highly underutilized and so the business research would therefore not be seen as the important tool it is in this regard. If one does not understand a concept nor is not aware of its benefits then the individual will not be drawn to utilize it.
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. This does not mean however 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 it becomes possible. Therefore, the small businesses where possible need to come together as a unit to create greater possibilities. Salmon, 2004) The research and development centers in Jamaica that focuses on the small business sector needs to be developed and additional funding provided to them so they will be able to meet the demands of the nation. The Jamaica Business Development Corporation is a case in point and even now some are not aware of the services that they offer to aid the growth of business development in Jamaica. The non-financial services such as technical support and training is not adequately provided for in Jamaica and according to Salmon the availability of this service is very poor in the urban areas and non-existent in the rural areas.
It is therefore recommended by Salmon that: •Non-financial services are to made available to the small business community through additional funding from the Government and the private sector in Jamaica •Establish small and micro-business incubators to provide entrepreneurs with the requisite hands on experience •Establish funding dedicated to research and development •Establish transparent process for accessing these funds provided for R&D in the micro and small business sector Business research is an important tool that can greatly enhance the development of Jamaica’s business.
It cannot be denied that it is expensive but there are ways to circumvent this hurdle with a collective effort. Despite its expense it cannot be purported as unnecessary to the Jamaican business community based on the benefits to be had from conducting a proper business research. Therefore based on the aforementioned premise one must strongly disagree that business research will yield little or no value to Jamaica’s businesses on the other hand agree that it is expensive but the juice outweighs the squeeze. Bibliography Jamaica’s Poverty Levels Increase. (2010, 10 11). Retrieved 02 20, 2012, from RJR News: http://rjrnewsonline. om/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 Hall. Kelly, R. (2008, 11 1). JAMAICA’S INNOVATION INFRASTRUCTURE: A COMPARATIVE ANALYSIS. Retrieved 02 22, 2012, from Planning Institute of Jamaica: http://www. pioj. gov. m/Portals/0/Sustainable_Development/Innovation-Jamaica. pdf PIOJ, P. I. (2010). Economic and Social Survey Jamaica 2010. Kingston: Planning institute of Jamaica. Salmon, J. U. (2004). Micro Business and Employment Generation for poverty Reduction. Workshop on Science and Technology for Social Development, (pp. 1-6). Wikipedia. com. (n. d. ). Digicel. Retrieved 02 20, 2012, from Wikepedia, The free Encyclopedia: http://en. wikipedia. org/wiki/Digicel Zikmund, W. G. , Babin, B. J. , Carr, J. C. , & Griffin, M. (2010). Business Research Methods, Eighth Edition. Canada: South Western, Cengage learning.