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Understanding the Difference Between Formal Research Proposals and Business Proposals

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Understanding the Difference between Formal Research Proposals and Business Proposals


Formal research proposals and business proposals may appear very similar, but they have vast differences in their goals, proposal sections, design approach, and the role of research. Formal research proposals focus on finding specific information that can help a manager make better business decisions (Jane, 2012). Business proposals come after the research is done, and focus on the strategic and tactical goals like suggesting a new product or service and making a profit (2012). Even though they are different, they are both vital in the business setting and important for a manager to get accustomed to.

Compare and Contrast

A formal research proposal is a "formal written plan which communicates ideas about a proposed study in order to obtain approval to conduct the study or to seek funding" (Onwuegbuzie, 1997). A proposal may be required for a grant application, an academic degree, a conference seminar, or for ethical approval as part of a study (Vivar, 2007). The proposal presents a validation for the study that the researcher may want to explore. According to Baker and Foy (2008), the proposal is a crucial step in the development of the project because the success of the project relies on the quality of the proposal. On the other hand, business proposals are often used by business managers to suggest new products or services, and aid in the objective to make money. They are more tactical and practical, and they act as a sales tool for a new product, service, or business protocol. The formal research proposal accepts a theoretical approach to developing a project, while business proposals adopt a more practical approach to how the business or organization can make more money (Jane, 2012).

One of most significant and apparent differences between a formal research proposal and a business proposal is how they conduct and utilize research. As Sekaran and Bougie mention in their book, Research Methods for Business: A Skill Building Approach, research is "the process of finding solutions to a problem after a thorough study and analysis of the situational factors" (2010). Developing a clear and well though-out proposal is the first step in the research process for formal research (Lusk, 2004). As Heath and Tynan mentioned in Crafting a Proposal (2010), a proposal "offers a justification for the study, indicating why the research is worth doing and how it will be carried out." Formal research proposals suggest research topics and provide methods of searching for a solution. In a formal research proposal, research is conducted to find specific information or data that can help the manager make a good decision. A formal research proposal is mainly a theoretical approach to a problem because it asks the question: "What happens when...?" The formal research proposal usually encompasses a theoretical framework to define the theories that support the variables used in a hypothesis. "A theoretical framework is used in research to provide a structure for examining a problem and serves as a guide to explore relationships between variables to interpret the data" (Vivar, 2007). The theoretical framework is an important step in the research process, as it is used to determine whether the hypothesis can be tested or not.

In contrast to a formal research proposal, a business proposal utilizes research already conducted to find an optimal solution. The goal of the business proposal is to find the best possible solution to a business problem. Business proposals offer a more practical approach to a business problem, and usually attempt to increase profits by finding new ways of doing things (Jane, 2012). It asks the question: "How do we...?" Business managers can use business proposals to determine the best way to enter the market once a product has been developed (Jane, 2012). A great example of a business proposal is a Request for Proposal, or RFP. RFPs are mostly customer driven, and can be the most effective way to source the goods or services that the business organization is interested in (Wheaton, 2008). As Seng mentions in Ten Tips for Writing a Great RFP, RFPs can be used as a competitive way to win prestigious and vigorous new business (2012).

Formal research proposals and business proposals both start with business research, which is organized and systematic (Sekaran & Bougie, 2010). Managers must first understand the two different approaches to business research: basic research and applied research (2010). Basic research in the business setting is a broader approach to issues in an organizational situation, and the findings are specific to the issues. Applied research, on the other hand, is a more straight forward approach to a specific problem currently being observed in the business setting (2010).

Understanding these fundamentals of business research can aid in identifying the critical issues, gathering relevant information, analyzing the data in ways that help decision making, and implementing the right course of action (2010). Business research helps to generate alternative solutions for effective decision making. Bazerman and Moore (2009) illustrate six steps that managers can follow in order to effectively decide on an issue to pursue. These steps include (1) defining the problem, (2) identifying the criteria, (3) weighing the criteria, (4) generating alternatives, (5) rating each alternative on each criterion, and (6) computing the optimal decision. These steps should be well-thought out and carefully executed, although there are other research models that a business manager can follow (2009).

When the business manager defines the problem, he or she must begin the research process. Formal research proposals follow a rigidly structured research process. This process includes a number of steps that the manager may follow, including (1) observation, (2) preliminary data gathering, (3) problem definition, (4) theoretical framework, (5) generation of a hypothesis, (6) scientific research design, (7) data collection analysis and interpretation, (8) deduction, (9) report writing, (10) report presentation and (11) managerial decision making. On the other hand, business proposals may not be as structured or organized. The business proposal's main objective is to be persuasive and easy to read. They need to be clear yet precise, brief yet well-structured, simple yet descriptive (Forsyth, 2010). Although they are not as structured as formal research proposals, all business proposals should still include key elements including an executive summary, a statement of work or an implementation



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