Business Research Methods

Lec # 3
Research process
The Hypothetico-Deductive Method

Dr. Sadaqat Ali

Department of Management Sciences

National University of Modern Languages
 The Building Blocks of Science in Research
Deduction and Inductions
“Answers to issues can be found either by the
process of deduction or the process of
induction, or by a combination of the two”.
 Deduction
• Deduction is the process by which we arrive at a reasoned
conclusion by logical generalization of a known fact.

Example: we know that all high performers are

highly proficient in their jobs.
(e.g.) If John is a high performer, we then conclude that he is highly proficient in his
job
 Induction
• Induction is a process where we observe certain
phenomena and on this basis arrive at conclusions.

In other words, in induction we logically establish a

general proposition based on observed facts.
The Hypothetico-Deductive Method
 The Hypothetico-Deductive Method (OLD
VERSION- 4th Edition)

The Seven-step process in the Hypothetico-Deductive Method

1.Observation (Broad Problem Area)

2.Preliminary Information Gathering (Problem
Identification/Specification)
3.Theory Formulation (Theoretical Framework)
4.Hypothesizing
5.Further Scientific Data Collection (Research Design)
6.Data Analysis
7.Deduction (Conclusion)
 Observation

Observation is the first stage, in which one

senses that certain changes are occurring
or that some new behaviors, attitudes and
feelings are surfacing in one’s environment
(i.e., the work place).
 Preliminary Information Gathering

• It involves the seeking of information in depth, of what is observed.

• This could be done by talking informally to several people in the work setting or
to clients or to other relevant sources, thereby gathering information on what is

happening and why. (Unstructured interviews)

• Then it is followed by structured interviews.

• Additionally by doing library research or obtaining information through other
sources, the investigator would identify how such issues have been tackled in

other situations.
 Theory Formulation

• It is an attempt to integrate all the information in a logical manners,

so that the factors responsible for the problem can be on

conceptualized and tested.

• The theoretical framework formulated is often guided by Theory

and reasons along with experience and intuition.

• In this step the critical variables are identified and examined as

to their contribution or influence in explaining why the problem

occurs and how it can be solved.

 Hypothesizing

• It is the next logical step after theory formulation.

• From the theorized network of associations among the
variables, certain testable hypotheses or educated conjectures

can be generated.

• Hypothesis testing is called deductive research. Sometimes,

hypotheses that were not originally formulated do get generated

through the process of induction.

 Further Specific Data Collection

•After the development of the hypotheses,

data with respect to each variable in the
hypotheses need to be obtained.

•Further data are collected to test the

hypotheses that are generated in the
study.
 Data Analysis

•Data gathered are statistically analyzed to

see if the hypotheses that were generated
have been supported.

•Co-relational method will be used to analyze

and determine the relationship of two or
more factors in the hypotheses for example:
stock availability and customer satisfaction.
 Deduction

•Deduction is the process of

arriving at conclusions by
interpreting the meaning of
results of the data analysis.
 The Value of Business Research for Managers – (1)
• Reduction of uncertainty and improvement in
the quality of decision-making with several
consequent advantages (e.g. strategic, operational)
and benefits for organizations

• Business Research Methods can be employed in

each of the following four stages:

(1) Identification of problems and/or opportunities

– Useful for strategy planning, analysis of internal and
external organizational environment
 The Value of Business Research for Managers – (2)

• (2) Diagnosing and Assessment of problems and/or

opportunities

– Its purpose is to gain insight into the underlying

reasons and causes for the situation. If there is a
problem, it asks what happened and why? If there is an
opportunity, it seeks to explore, clarify and refine the
nature of the opportunity and, in the case of multiple
opportunities, seeks to set priorities

• (3) Selection and Implementation of Courses of Action

– After alternative courses of action have been
determined, selection of the best possible course.

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 The Value of Business Research for Managers – (3)

– An important consideration is the quality of

forecasting which is an essential tool of research

• (4) Evaluating the Course of Action

– Business Research Methods are used after a course of

action has been implemented in order to determine
whether activities have been properly implemented and
have accomplished what they intended to do

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• The ValueResearch
Evaluation of Business Research
– It is the for Managers
formal objective – (4)and
measurement
evaluation of the extent which an activity, project or programme has
achieved its goal, and the factors which influence performance (e.g.
audits). It is also the formal objective measurement and evaluation of
the extent to which on-going activities, projects or programmes are
meeting their goals (performance-monitoring research)

– Examples of performance-monitoring research:

(1) Are railway passengers satisfied with the level of service the railway
company is providing? If not, then research may need to be
undertaken to ascertain the reasons for customer dissatisfaction and
propose corrective measures
(2) What are the trends in retail and wholesale sector? Can research
suggest new ways to improve efficiency in purchase transactions

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