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8 INTRODUCTION TO RESEARCH

be interested in investigating the factors that contribute to absenteeism as a mat-
ter of mere academic interest. After gathering information on this topic from sev-
eral institutions and analyzing the data, the professor may identify factors such
as inflexible work hours, inadequate training of employees, and low morale as
primarily influencing absenteeism. Later on, a manager who encounters absen-
teeism of employees in his organization may use this information to determine
if these factors are relevant to that particular work setting.
Thus, research done with the intention of applying the results of the find-
ings to solve specific problems currently being experienced in the organiza-
tion is called applied research. Research done chiefly to enhance the
understanding of certain problems that commonly occur in organizational set-
tings, and seek methods of solving them, is called basic or fundamental
research. It is also known as pure research. The findings of such research
contribute to the building of knowledge in the various functional areas of
business. Such knowledge generated is usually later applied in organizational
settings for problem solving.

Applied Research

Consider the following two situations cited in Business Week.

1. Oxford Health Plans Inc. saw trouble brewing. It was a company in dis-
tress experiencing computer problems. Turnover among Oxford’s pro-
grammers was unusually high and processing of claims became a big
nightmare. Clients started canceling their policies, claims for bypass
surgery and such were way up, and premiums paid out relative to
clients’ medical expenses, on a percentage basis, was close to 85%.
2. Xerox is insular and isn’t ready for the increasingly competitive, high-
tech world. Xerox still relies on old-fashioned and slow-selling analog
copiers for more than half its revenue and despite its double-digit
growth in digital products and services, its sales rose just 4%.

It is obvious that Oxford has a multitude of problems and an outside con-
sultant–researcher would perhaps be able to design a scientific study that
would look into them. Presumably, this would be a lengthy investigation that
could result in several different recommended solutions. The company man-
ager could then consider them, make the right decision, and thereby solve
Oxford’s problems.
In the second situation, Xerox also needs to look into the efficacy of the ana-
log technology used in copiers and examine what should be done to increase
efficiency and promote its sales. The two preceding examples illustrate the need
for applied research, whereby existing problems can be solved through investi-
gation and good managerial decision making.