Research is done everyday. Research is used in the many different situations managers encounter everyday. Research is part of the problem-solving manager do to make decisions. Research is defined as “the process of finding solutions to problem after thorough study and analysis of the situational factor” (Sekaran, p3, 2003). Managers use research for daily operational problem as well as bigger problems that can require hired research consultants. Managers who use research are able to communicate with the hired consultants because they understand the process of inquiry, investigation, examination, and explanation. Managers are also, capable of understanding the difference in good and bad studies, and can apply the research done to solve their problems (Sekaran, 2003).
There are two types of research. Both have many similarities in the scientific process of the research; however the end results differ in their use. Both types of research can be business research. “Business research is described as a systematic and organized effort to investigate a specific problem encountered in the work-setting that needs a solution” (Sekaran, p5, 2003). The first type of research is formal research. Formal research is often referred to as basic research. Basic research is research done on commonly occurring problems that different organizations may face. This research finds a solution to these common problems in order for organizations to use it later. Research development departments and professors are two researchers who use formal research in order to study specific interests focusing on developing solutions for different organizations who might encounter the same problems (Sekaran, 2003). Managers use the second type of research more in their organizations. This research is applied research. Applied research is evident in many business proposals. Applied research is “aimed at solving a currently experienced problem” (Sekaran, p10, 2003). This research can be as simple as finding solutions to daily operational problems. One problem managers consistently want research on is the relationship between customer satisfaction and loyalty. The research found on the relationship of customer satisfaction and loyalty spans over the past decade. Many researchers argue that there is no relationship between customer satisfaction and loyalty while others find direct correlations between the two and a business’s profitability. In Roger Hadowell’s study, he defines loyalty as both behavioral and attitude while conducting his research on a banking organization. He states that behaviors including continuance, increased relationship, and recommendations are all behaviors of loyalty to an organization (Hadowell, 1996). His research illustrates the “relationship of profitability to customer related outcomes that managers can influence directly” (Hadowell, 1996). His findings support the hypothesis that customer satisfaction influences customer loyalty increasing profitability. Hadowell addresses two difficulties that he encountered during his research. First, work with the organization in order to develop the ideal measurement system used for the research. Secondly, focus on data collected over a period of time with strong organizations (Hadowell, 1996). In the White Page Series, researcher Burke found that satisfied customers were likely to stay customers of the company and tell very few of positive experience that have occurred. On the contrary, those customers who have had negative experience with companies are more likely to tell others about the experience. Burke uses three basic methods to measure customer satisfaction, value, loyalty and their effect to financial performance (Burke, 2004). According to Burke, the major method of predicting customer satisfaction impact on loyalty and on organizations profitability is projection. One study from the Journal of Retailing, researched how consumer behavioral patterns of...
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