Application of Business Research

Hypothesis
• A hypothesis can be defined as a
logically relationship between two or
more variables expressed in the form
of a testable.
• Hypotheses bring clarity and focus to
a research problem, but are not
essential for a study.
Hypothesis
• You can conduct a valid investigation
without constructing a single formal
hypothesis.
• On the other hand, within the context
of a research study, you can construct
as many hypotheses as you consider
being appropriate
A Hypothesis should be simple,
specific and clear
• To be able to develop a good
hypothesis you must be familiar with
the subject area.
• More insight you have into a
problem, the easier it is to construct
a hypothesis.
“Hypothesis is a statement which describes the attributes of
the variable”

With the help of

hypothesis we can find
correct problem solution

Whenever hypothesis is
proven true we say that it
is Significant and if it is
false then Non-
Significant
COMPONENTS OF HYPOTHESIS

 The variables.

 The population.

 The relationship between the

variables.
TYPES OF RELATIONSHIPS

 Positive

 Negative

 None
TESTABLE STATEMENTS
• Several testable statements or hypotheses can be
drawn from the theoretical frame work
formulated:
ALTERNATE HYPOTHESIS
• If the pilots are given adequate training to
handle midair air-safety, violations will be
reduced.
TESTABLE STATEMENTS
• The above is testable statement. By
measuring the extent of training given to
the various pilots and the number of safety
violations committed them over a period
of time.
• We can statistically examine the
relationship between these two variables
TESTABLE STATEMENTS
• The above is testable statement.
• By measuring the extent of training given
to the various pilots and the number of
safety violations committed them over a
period of time.
• We can statistically examine the
relationship between these two variables
HYPOTHESIS DIFFERENCE
Hypothesis can also test whether there are
differences between two groups:
• Employees who are healthier will take sick
leave less frequently.
• Women are more motivated than men.
• There is difference between the work ethic
values of American and Asian employees.
TYPES OF DATA IN HYPOTHESIS

PARAMETRIC: Easily written in numerical e.g.: Literacy

rate is 20%
NON-PARAMETRIC: How much you like chocolate: Very much
TYPES OF HYPOTHESIS:

 Directional Hypothesis

 Non-Directional Hypothesis

 Null Hypothesis

 Alternate Hypothesis
 DIRECTIONAL HYPOTHESIS

 Positive

 Negative

 More Then

 Less Then

Greater the stress in the job, will lower the job

satisfaction of the employees.

Women are more motivated then men.

Null Hypotheses
• A Null Hypothesis is pre-assumed as true until
statistical evidence makes it false.
• The null statement is expressed is expressed is
no (significant) difference between two variables
or no (significant) difference between two
groups.
• In general, the null statement is expressed no
(significant) difference between two groups.
NULL HYPOTHESIS
To explain it further is setting up
the null hypothesis, we are
stating that there is no
difference between what we
might find in the population
characteristics and sample we
are studying.

Ho: Fail to reject null hypothesis

 ALTERNATE HYPOTHESIS

Alternate hypothesis is opposite of null

hypothesis.
Alternate Hypothesis
• Difference between in two population groups
(say men and women) or relationship
between two variables (say sales and profit).
• The alternative hypothesis, which is the
opposite of the null, is a statement expressing
a relationship between two variables or
indicating differences between groups.
The seven-step process in the
hypothetic-deductive method
1. Identify a broad problem’ area
2. Define the problem statement
3. Develop hypotheses
4. Determine measures
5. Data collection
6. Data analysis
7. Interpretation of data
Identify a broad problem area
• A drop in sales
• frequent production interruptions
• low-yielding investments
• Dis-interestedness of employees in their
work
• customer switching etc.
Define the problem statement
• Research starts with a definite aim or
purpose.
• To find solutions for identified
problems, a problem statement that
states the general objective of the
research should be developed.
Define the problem statement
• Gathering initial information about the factors
that are possibly related to the problem will help
us to narrow the broad problem area and to
define the problem statement.
• This could be done by a literature review or to
other relevant sources
• This allows us to develop a specific problem
statement.
Develop Hypotheses
• In this step variables are examined as to their
contribution or influence in explaining why the
problem occurs and how it can be solved.
• For instance, at this point, we might hypothesize
that specific factors such as overpricing,
competition, inconvenience, and unresponsive
employees affect customer switching.
Data analysis
• In the data analysis step, the data gathered are
statistically analyzed.
• Hypotheses are tested through appropriate
statistical analysis.
• Analyses of both quantitative and qualitative
data can be done
POSSIBLE OUTCOMES OF HYPOTHESIS
TESTING
TYPE I ERROR:
Pr (H0 is rejected |H0 is true) =α
(Significance level)

TYPE II ERROR:
Pr (H0 is accepted |H1 is true) =β

SPECIFICITY:
Pr (H0 is accepted |H0 is true) = 1-α

SENSITIVITY:
Pr (H0 is rejected |H1 is true) = 1-β
(Power of test)