# Hypothetico-Deductive Method in Business Research

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Continued from: Types of Research

Hypothetico is derived from the term "hypothetical" which means academic, contestable, contingent, disputable, imaginary, questionable, refutable, theoretical and unconfirmed.

Under this method, one tries to list down possible reasons concerning any problem and finds solutions considering one reason at one time. In this way, all invalid reasons may be eliminated and a valid reason may come up. This is simple but called scientific method as it is a step-by-step approach.

## Hypothetico-deductive method

For example, a person finds that the picture on his TV screen is blurry. He can think of few reasons such as (i) loose cable connections, (ii) defective tuner, (iii) picture tube no good or (iv) disrupted transmission from TV station. The person would check cable connections and if it is OK, would call his friends or neighbors if the reception of their TV is normal. Having confirmed this, he would call Electronic Technician for a checkup. It may transpire that fault for blurry picture lies in the picture tube requiring replacement. If the TV is under warrantee, replacement would pose no problem, else the poor fellow would have to cough up Rs.6,000-10,000 for picture tube, parts and installation. If so, the problem is solved.

Why called hypothetico-deductive because one has to identify the problem, guess out reasons thereof and examine them one by one. An educated guess is known as "hypothesis" which means assumption, belief, presupposition, proposal, starting point and theorem. Observations which run contrary to those predicted are taken as evidence against the hypothesis; observations which are in agreement with those predicted are taken as corroborating the hypothesis. It is the same as we solve everyday problems but there is only a small twist which is termed as ‘Null & Alternate Hypothesis”. Given below is a simple example of blurry picture:

Null Hypothesis: There is no problem with the connections.

Alternate: There is some problem with the connections.

If we check and find out the connections were indeed loose, we would reject the “Null” and accepting the Alternate. If by adjusting the connection, our problem is solved, well and good else we move to next set of Null and Alternate Hypothesis concerning TV Transmission and so on so forth. This would be discussed later.

As Karl Popper suggested, it very difficult to prove a reason as valid by induction i.e. specific to general. Suppose we found one MBA who is intelligent. On this specific basis alone, we cannot generalize that all MBAs are intelligent. (It is not a case of natural science but social science). We can be proved wrong just by citing an example of one unfortunate MBA who happened to be a stupid. As Karl pointed out "no amount of evidence assures us that contrary evidence will not be found." He proposed that using deduction method *general to specific), one can falsifty a statement making the alternate true like:

Null Hypothesis: No MBA is intelligent.

Alternate: All MBAs are intelligent.

We can reject Null Hypothesis by citing example of an MBA, Omer Khan, who had secored an IQ of 120 . If null-hypothesis is rejected or proved false, the alternate would become true and all MBAs would be considered as intelligent even though all may not be so. In fact, the researcher hides his findings in the alternate hypotheses for acceptance by simply rejecting the Null Hypotheses.

Falsification is the main characteristic of hypothesis testing. It involves making a specific statement and then finding contrary evidence through experiments or observations. This is known as the hypothetico-deductive method.

Being scientific in nature, the aforesaid method is common to all disciplines like economics, physics or biochemistry. It has basic four stages as shown below:

1. Identify the hypothesis to be tested
2. Generate prediction from the hypothesis
3. Use experiments to check whether predictions are correct.
4. If the predictions are correct, then the hypothesis is confirmed. If not, then the hypothesis is disconfirmed.

For better explanation, the four stages can be increased to seven stages as shown in the diagram.

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## An example of business research

In a local chain store, ChenOne, there was a large turnover of employees in the first half of 2009. The management became perturbed and asked around reasons for leaving the job. There were no satisfactory answers. Maybe the reasons for job-turnover were evident like (i) opening up of few chain stores of international repute, (ii) boom condition in North of the country or in Dubai or (iii) closure of one branch spreading fear that the chain stores are gradually being closed down. If so, one need not conduct research.

In the second stage, an investigator should collect secondary data which may be helpful in solving the problem. Job turnover may have been experienced in some other stores or industries, what were the reasons thereof and how the problem was tackled. If possible, secondary data may be obtained on the basis of age, gender and experience. At the same time, the investigator should find out opportunities for advancement and job satisfaction in the company as well as in industry. Some structured interviews may be conducted of personnel leaving the jobs known as “exit-interview”

In the third stage, the problem should be narrow down from general phenomena to a specific research question like “to what extent age, gender, work experience and opportunities predict organizational commitment". A researcher is expected to find positive correlation between organizational commitment and all those factors. This would be helpful making hypothesis or testable proposition like “as an employee gets older, it increases his or her commitment to organization”. (If subsequent data collection pointed out that older employees have shown more job-turnover, the investigator would look somewhere else for a solution.

There are various ways to test the hypothesis like correlational studies, analytical studies, and cross-sectional studies. All employees may be interview or only a reasonable sample through a random selection or systematic.

At the final stages, the data collected be processed, presented and analyzed and interpreted. It may transpire that the job-turnovers were triggered by some out of turn promotions. The management was advised to implement a career plan, make job-enriched and assure a fair policy in promotion. Also special bonuses may be given for completing five or ten years of service.

If per chance, a good solution had not come up with all the effort, the investigator would go back to the third phase and re-vise the hypothetical model.

## DEDUTIVE METHOD

Business research is a systematic process of gathering information for aid in making business decisions and development of business standards and processes. It covers all areas of business such as accounting, finance, MIS, market, human resource management and operations management. Some major areas are stated as under:

Market research

It addresses issues pertaining to advertising, product image, packaging and pricing, after-sale services and demand analysis. Market Research is widening through application of econometrics to marketing and political marketing techniques.

Technology and Operations Management

Business research under this area covers a variety of subjects like organizational design, simulation, and management of technology, new product development and innovation.

Management research

Topics such as employee attitude and behavior, impact of changing demographics on management practices are studies.

Accounting

Two main concerns in accounting are: reporting profitability and finding true cost of each product. Various systems have been evolved like ABC and EVA etc. Similarly, in order to achieve targeted profit, a company must have a budgetary control which entails further studies of the business environments. Further, area of research includes capital markets, social responsibility and environment accounting, ethics and behavioral implications.

Finance:

Topics are studied like appropriateness of financial structure, raising funds through equity or debt, financial leverages and impact on profitability. There are various other issues as valuation methods, risk mitigation with options and future contracts.

NEXT HUB: The researach Process

shahid qazi awan on September 15, 2014:

shahid, sir i am from Pakistan, just started study on ARM u have explained it in an excellent way cant find words to appreciate and thank u .really superb

Mohamed on May 10, 2014:

i'm looking for an example for

For more explanation, follow up the Seven-Step Process in the Hypothetic-Deductive Method:

• Identify a broad problem area

• Define the problem statement

• Develop hypotheses

• Determine measures

• Data collection

• Data analysis

• Interpretation of data

a lot of thanks for your help

kashif ahmad on January 28, 2013:

Thank you sir,

Allah apko jaza-e-khair ata farmai.

hafeezrm (author) from Pakistan on January 27, 2013:

It depends upon the final shape of the report. Researchers tend to quantify the qualitative data. If there is a remark like "Fully satisfied", you have to count it, work out percentages and graph. If so it would be a quantitative report. But if you write that a large number of people interviewed said that they were fully satisfied, it would be qualitative report.

Rarely any is either qualitative or quantitative. It is blend of both.

Kashif Ahmad on January 27, 2013:

salam sir,

my topic is "Comparative Study of Islamic and Conventional Banking

Based on Customer Satisfaction", questionnaire will be use for collection of primary data,

please tell me sir that this is Qualitative or Quantitative Or what type of research.

thanks,

naseem khan on July 03, 2012:

Exemple of tv is so knowlsdgsble. Very nice.

hafeezrm (author) from Pakistan on April 24, 2012:

Thanks @Conradofontanilla for visiting my page. You are very knowledgeable and intelligent.

conradofontanilla from Philippines on April 24, 2012:

Null Hypothesis: No MBA is intelligent.

Alternate: All MBAs are intelligent.

I find the null and alternative method of hypothesis difficult to handle. I prefer the "concepts and relationships among concepts" as Einstein puts it. In your example above, MBA may be considered as a concept but intelligent may not be. Is "intelligent" a relationship? A relationship between MBA and intelligent is not posited. Einstein says a theory consists of concepts and relationship(s) among concepts. At least two concepts are involved and one or two relationship(s) is or are involved. Otherwise relationship is absent in your example. A prediction or a statement of fact can be drawn from a hypothesis. It can be said that a hypothesis consists of concepts and relationship(s) among concepts. Then a theory is a hypothesis that had been proven or verified. I have Hubs "How to test a free radical hypothesis of rheumatic heart" and "A theory of Salk Vaccine: How do size and shape of killed polio virus incite immunization?"

hafeezrm (author) from Pakistan on April 10, 2012:

Ahsan Mahmood on April 10, 2012:

thankyou sir

we are proud of you.

hafeezrm (author) from Pakistan on April 09, 2012:

MNaeem on April 09, 2012:

thanx a lot sir its very benificial for the research intersted people

hafeezrm (author) from Pakistan on March 19, 2012:

Humayra Sharif on March 19, 2012:

i have searched for this topic Hypothetico deductive method in various web pages but everywhere i found critical explanations. Only this page makes me satisfied. Thank you very much for sharing this topic.

hafeezrm (author) from Pakistan on March 01, 2012:

I have traveled a lot in Nigeria.

Nusirat ololade ibrahim on February 29, 2012:

Am a student of kwara state university studying bus. And entrepreneurship. Interested in major are of business research

hafeezrm (author) from Pakistan on February 28, 2012:

Maqsood Ahmed on February 28, 2012:

sir,i am doing Ms.management sciences from Iqra University Islamabad.Your writing on hypothetico deductive method helped me out from cumbersome situation...

Ocean of thanks

Maqsood Ahmed

hafeezrm (author) from Pakistan on January 25, 2012:

mustafa hussain on January 25, 2012:

sir i m doing mphil in linguistics from minhaj uni. i m really glad to see such a remarkable and easy practical approach to research from my homeland thank you sir once again for sharing your knowledge.

hafeezrm (author) from Pakistan on January 25, 2012:

neelam on January 25, 2012:

this is my e.mail id

neelamhabib93@yahoo.com

neelam on January 25, 2012:

but plz sen me soft copy of this lecture plz

hafeezrm (author) from Pakistan on January 19, 2012:

This question has been answered in response to your previous question. If secondary data is available and is dependable, one would prefer deductive method. If none, the other method will be the only alternative.

Yunus on January 18, 2012:

This is highly comprehensive analysis,you have indeed removed many victims from darkness of ignorance.May Allah's mercy be upon you.Ameen

my question is how can we deduce the merits and the demerits of the approaches ie inductive and deductive relatively to business studies.

hafeezrm (author) from Pakistan on December 17, 2011:

https://hubpages.com/education/The-Research-Proces...

and you will find the format. Depending on the research question, the format may differ.

I have been to your beautiful country many times. Last year, I went up the Adam's Peak.

Dear sir,

I am from sri lanka and reading for my MBA at Sri Jayawardanapura university. please be kind enough to send me the format of a project proposal.(anuradha.senadheera@gmail.com)

Thank you

hafeezrm (author) from Pakistan on May 01, 2011:

I am sorry,I have no info on philosophy of research.

Mohammad Azam on April 30, 2011:

Can i get information regarding the philosophy of research in simple terminology? i.e. Ontology, epistemology, positivism, etc...

hafeezrm (author) from Pakistan on November 07, 2010:

It is one of the most important business research method.

bushra on November 07, 2010:

u hav nt discuss here the utility or imortance of this method

arfa on November 03, 2010:

sir thank u for sharing such information

Minhas Ahmed on October 07, 2010:

thanks for sharing such information

Aziz on September 19, 2010:

Thank you

Aziz on September 19, 2010:

dear sir,

Kindly send me Hypothetico-Deductive Method in Business Research soft copy for my better understanding the topic, also please guide me as i have just started my MS in management sciences. it will be kind of you if you provide any subject book soft copy that relates to Business research & quantiative tools for research.

Thank you and best regards

Aziz

hafeezrm (author) from Pakistan on September 14, 2010:

Dear Korbey,

korbey prosper on September 14, 2010:

I like the informations provided but the diagram on scientific method is blur

kamran on April 06, 2010:

regards

kamran

kamran on March 22, 2010:

sir......it is a nice lecture good combination of deductive and hypothesis..........thnx

hafeezrm (author) from Pakistan on January 29, 2010:

Thanks Maita.

prettydarkhorse from US on January 29, 2010:

very nice and informative as well, Maita

hafeezrm (author) from Pakistan on January 28, 2010:

Rufi Shahzada from Karachi on January 28, 2010:

Dear Sir,

This is such a nice HUB, the MBA example is a splendid approach...

Thanks a lot for providing a great platform of knowledge...

Regards,