CHAPTER-TWO

DEFINING THE RESEARCH PROBLEM AND HYPOTHESIS FORMULATION

Chapter objectives
After completing this unit, you will be able to:
 Define research problem
 Identify Components of research problem
 Identify the various techniques & approaches to problem definition
 Formulate research Problem, hypothesis and research question
 Identify Criteria for hypothesis formulation
Introduction
In research processes, the first step happens to be identifying and properly defining a research
problem. The researcher first must find any social, economic, business problem and formulate it
into research problem. Like a medical doctor, a researcher must examine all the symptoms
(presented to him or observed by him) concerning a problem before he can diagnose correctly.

Problem formulation from the researcher point of view represents translating the managers,
social and other problems in to a research problem. In order this to happen the researcher must
understand the origin and nature of the management (economic, environmental, and etc.)
problems and then be able to rephrase it into meaningful terms from analytical point of view.

2.1. What is a Research problem?

The term 'problem' means a question or issue to be examined or any situation where a gap exists
between the actual and the desired state.
A problem does not necessarily mean that something is seriously wrong. It could simply
indicate an interest in improving an existing situation. Thus, problem definitions can include
both existing problems in the current situation as well as the quest for idealistic states in the
future.
A research problem, in general, refers to some difficulty, which a researcher faces (experiences)
in the context of both a theoretical or practical situation and wants to obtain a solution for the
same. Problem is any question or matter involving doubt, uncertainty or difficulty. Problem also
denotes here a question proposed for solution or discussion
2.1.1. Components of the research problem

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The problem is consists of the following components
1. The decision-maker (which can be individual, organization, etc.,) who has some
difficulties or problem.
2. There must be some objectives (goals) to be attained at. If one wants nothing then,
cannot have a problem. The objective of the decision-maker provides motivation to solve
the problem.
Objective can be defined from different perspective
 From economics point of view: objective can profit maximization
 From Marketing view point - increasing market share, creating product image and
prestige, increasing sale and so on can be considered as an objective.
 From Management perspective - objective can be motivating workers thereby increase
labor productivity
 Finance- increase return on investment
3. Alternative courses of action: There must be alternative means to achieve the desired
objective. This means that there must be at least two means available to a researcher for if s/he
has no choice of means, S/he cannot have a problem.
E.g. Increase market share implies increasing sales relative to other firms.
 These can be achieved by
 Increasing total sale by:
 Decreasing price,
 Increasing quality,
 Changing package,
 Developing new product line and the like.
4. The environment (or context of the problem) to which the difficulty pertain. These
environmental factors can be;
Government regulation (exogenous)
Price factor (Exogenous in competitive market)
Market place (exogenous)
Technology (endogenous)
Level of education and the like etc (endogenous)

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5. A state of doubts as to which course of action is the best. This means that researcher must
answer the question concerning the relative efficiency.

Selection of a Problem for Research

The selection of a problem for research is not an easy task; itself is a problem.
It is least amenable to formal methodological treatment. Vision, an imaginative insight, plays an
important role in this process.
Sources of Problems
 Reading: books and articles relating to subject of our interest
 Academic Experience: Classroom lectures, class discussions, seminar discussions and
out-of-class exchanges of ideas with fellow students and professors
 Daily Experience
 Exposure to field situations: Field visits; internship training and extension work provide
exposure to practical problems
 Brain storming: Intensified discussion within a group of interested persons may often be
a means of identifying pertinent questions, and of developing new ideas about a problem.
 Research: Research on one problem may suggest problems for further research.
 Intuition: Sometimes new ideas may strike to one's mind like a flash. Reflective mind is
a spring of knowledge.
How are problems identified?
1. Observation – manager/researcher senses that changes are occurring, or that some new
behaviors, attitudes, feelings, communication patterns, etc., are surfacing in one’s
environment. The manager may not understand exactly what is happening, but can
definitely sense that things are not what they should be.
2. Preliminary Data Collection – use of interviews, both unstructured and structured, to
get an idea or “feel” for what is happening in the situation.
3. Literature Survey – a comprehensive review of the published and unpublished work
from secondary sources of data in the areas related to the problem.
2.1. 2. Defining the Research Problem
What does one mean when he/she wants to define a research problem?

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The answer may be that one wants to state the problem along with the bounds within which it is
to be studied.

It involves the task of laying down boundaries within which a researcher shall study the
problem.

• Problem definition or problem statement is a clear and precise statement of the

question or issue to be investigated.

How to define a research problem is undoubtedly a herculean/exceptional task.

Defining the Problem

Defining a problem means “To pin-point the problem or defining a problem to reach the
core of the problem.”
Defining the research problem is crucial and very hard part of a research process.
It is crucial because, the problem identified will provide us with the topic of the designed
research and the objective of the research.
It is the most difficult and hard part of the research study because; there is a cause and
effect issue.
It is commonly difficult to distinguish effect of a problem from the cause of the problem.
Need of defining a problem
The definition of a problem serves the following purposes:

The definition of a problem

sets the direction of the study.
reveals the methodology or procedure of the study.
helps the researcher to control subjectivity or biases of the researcher.
suggests and specifies the variables to be taken up into the investigation through a
problem involved into so many variables.

Therefore, defining a research problem properly is a prerequisite for any study and a very
important step. Even it is more essential than its solution.

Defining the problem clearly will help to find answers to questions like:

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 o What data are to be collected?
o What characteristics of data are relevant and need to be studied
o What relations are to be explored
o What techniques are to be used for the purpose
o In the formal definition of the problem the researcher is required to describe the
background of the study, its theoretical basis and underlying assumptions in concrete,
specific and workable questions.
The problem statement should make a convincing argument that there isn’t sufficient knowledge
available to explain the problem or there is, at least, a need to test what is known and taken as
fact.
 Some ways to show that you are adding to the knowledge in your field:
Gap: A research gap is an area where no or little research has been carried out.
The research problem is defined by asking a question to which the answer is unknown, and
which you will explore in your research.
◦ Counter-claiming: A conflicting claim, theory or method is put forward.
◦ Continuing a previously developed line of enquiry: Building on work already
done, but taking it further (by using a new sample, extending the area studied,
taking more factors into consideration, taking fewer factors into consideration,
etc).
The researcher should be focused, and should single out and clearly state the problem.
S/He should ask whether the problem is:
 Amenable to empirical investigation or evaluation through collection and analysis
of relevant data
 Brief, clear and precise
 Researchable in respect to appropriate sources of data/information that can
provide solutions to the problem identified
 Solvable
 Fitting itself well to established theories or concepts
 In defining the statement of the problem, the following questions could be helpful:
 Who is affected and how?
 What is missing and where?

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  What went wrong and to what extent?
 What are the notable effects, where, extent for whom?
 Is the problem self-expressive or does it generate other problems?
 What have others to say about it? Establishing the gap!
2.1.3. Techniques Involved In Defining A Problem
The technique involved in defining a research problem has a number of steps
1. Statement of problem in a general way:
 First of all the problem should be stated in a broad general way keeping with
some practical, scientific and intellectual interest
 In social science it is advisable to do some field observation and / or preliminary
survey (pilot survey).
 Then the researcher can himself state the problem or can seek guidance of the
subject expert.
2. Understanding the nature of the problem:
The best way of understanding the problem is:
To discuss with those who first raised the problem in order to know how the problem originally
come in view.
To discuss it with those who have a good knowledge of the problem concerned or similar other
problem.
3. Survey the available literature. All available literature concerning the problem must be
studied and examined before defining research problem.
This means the researcher must be familiar with:
 The relevant theory in the area
 Reports and records and other literature in the concerned area
 Review research works undertaken on related problem.
 Generally, survey literature will enable researcher to know
If there are certain gap in the theory

 Whether the existing theory applicable to the problem and consistent with each other.
 Whether the findings of the research do or do not follow a pattern consistent with the
theoretical expectation.

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Study on a related problem is also useful for indicating the type of difficulty that may be
encountered in the present study
4. Developing ideas through discussion:
 Various new ideas can be discovered and developed through it.
 The researcher should discuss his problem with colleagues and others who have enough
experience in the same area.
 Such practice is called ‘experience survey”
 The discussion sharpens the researcher’s focus of attentions on specific aspects of the
study.
5. Rephrasing the research problem (reformulation of the problem):
 Finally the researcher at this stage should be able to reformulate the problem that has
been stated in broad and general way in to working proposition.
 The researcher should narrow and break down the problem into its components variables
and relationship.
 That is, problem should be expressed as:
 a relationship between two or more variable
 the problem should be stated either in question form or hypothesis form
When a researcher state the problem in question form the formulated problem should be free
from ambiguity and the relationship among variables should be clearly expressed
E.g.
 Does a relationship exist between income of university students and score on their
exams?
 Is there a relationship between employees' age and their productivity?
 Does a relationship exist between the men circumcision and sensitivity to HIV virus?

Evaluation of the problem

Research problem should be evaluated in terms of the following criteria.
 Is the problem researchable?
 Is the problem new?
 Is the problem significant?
 Is the problem feasible?
 Researcher Competence

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  Interest and enthusiasm/eagerness
 Financial consideration
 Time requirement:
Typical Business Research Problems:
1. Training programs are not as effective as anticipated.
2. Sales volume of products/services is not increasing.
3. Balancing of accounting ledgers is becoming increasingly difficult.
4. The newly installed information system is not being used by the employees for whom it
was designed.
5. Introduction of flexible work hours has created more problems than it has solved.
6. Anticipated results of a recent merger/acquisition have not been realized.
7. Inventory control systems are not effective.
8. Frequent interruptions in production.
9. Low employee morale.
10. Frequent customer complaints.
11. Installation of an MIS keeps getting delayed.
12. Ad campaign is not generating new sales prospects.
Examples of Well-Defined problems:
1. Has the new packaging affected the sales of the product?
2. How do price and quality rate on consumers’ evaluation of products?
3. Is the effect of participative budgeting on performance moderated by control systems?
4. Does better automation lead to greater asset investment per dollar of output?
5. Has the new advertising message resulted in higher recall?
6. To what extent do the organizational structure and type of information systems account
for the variance in the perceived effectiveness of managerial decision-making?
7. Will expansion of international operations result in an improvement in the firm’s image
and value?
8. What are the effects of downsizing on the long-range growth patterns of companies?
9. What are the components of “quality of life”?
10. What are the specific factors to be considered in creating a data warehouse for a
manufacturing company?

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2.2. Hypothesis Formulation

Hypothesis form is employed when the state of the existing knowledge and theory permits
formulation of reasonable prediction about the relationship among variables.
The word hypothesis is a compound of two words, “hypo” and “thesis”.
 ‘Hypo’ means, under or below and ‘thesis’ means a reasoned theory or
rational viewpoint.
 Thus, hypothesis would mean a theory, which is not fully reasoned.
Hypotheses are a set of suggested tentative solution of a research problem, which can be or may
not be a real solution.
Hypotheses are preconceptions/ presumptions/ the researcher develops regarding the
relationships represented in the data, typically based on theory, practice or previous research.

Research hypothesis differs from research question in that, hypothesis both indicate the
question in testable form and predict the nature of the answer.

Examples
“The average number of cups of coffee students drink during finals will be greater than the
average they consume at other times.”
“Younger, part-time employees in all organizations are more likely to search for a new job.”
Establishing a hypothesis should follow rules like:
 The variables must be clearly specified and measurable by some techniques we
know

 The relationship between them must be stated precisely.

Importance of Hypothesis
A well-grounded hypothesis provides the following advantages
 Represents specific objective, which determine the nature of the data needed to
test the proposition
 Offer basis for selecting the sample, the research procedure, and the statistical
analysis needed.
 Keeps the study restricted in scope thereby preventing it from becoming too broad
 Sets a framework for reporting the conclusion of the study.

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 Types of Hypothesis
Hypothesis can be formulated in either of the following two ways:

(i) Null Hypothesis (Ho): It states that there is no much (significant) difference between the
parameter and statistic. In other words, H  states that the difference between sample statistic and
the claimed population parameter is due to chance variation in sampling. Null hypothesis is
normally preferred in testing process. It enables the researcher to test it. The random selection of
the samples from the given population makes the tests of significance valid for us. For applying
any test of significance we first set up a hypothesis - a define statement about the population
parameter(s). Such a statistical hypothesis, which is under test, is usually a hypothesis of no
difference between statistical and parameter. Hence it is called Null hypothesis. In the words of
R.A. Fisher null hypothesis is the hypothesis which is tested for possible rejection under the
assumption that it is true.
(ii) Alternative Hypothesis (H1): It is true when H is false. It is the statement about the population
that must be true if null hypothesis is false. Any hypothesis which is complementary to the null
hypothesis is called an alternative hypothesis. It is important to explicitly state the alternative
hypothesis in respect of any null hypothesis, because the acceptance or rejection of H  is
meaningful only it is being tested against a rival hypothesis

The characteristics of good hypotheses are:

(i) it should be empirically testable;

(ii) it should be possible to draw certain inferences, which in turn can be tested by observation in
the field;
(iii) it should be conceptually clear; (iv) the hypothesis must be specific; and

(v) it must be related to a study of theory of some theoretical orientation.

Procedure for Hypothesis Testing

The first and foremost problem in any testing procedure is the setting up of the null hypothesis. As the
name suggests, it is always taken as a hypothesis of no difference. The decision maker or researcher
should always adopt the neutral or null attitude on the part of the researcher before drawing the sample is
the basis of the null hypothesis.

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The following points may be borne in mind in setting the hypothesis.

1. If we want to test significance of the difference between a statistic and the parameter or between
two sample statistics then we set up the null hypothesis, that the difference is not significant. This
means that the difference is just due to fluctuations of sampling.
2. Setting the level of significance: The hypothesis is examined on a predetermined level of
significance. In other words the level of significance can be either 5% or 1% depending upon the
purpose, nature of enquiry and size of the sample.
In hypothesis testing, two kinds of errors are possible viz., Type I error and Type II error.

Type I error means rejection the null hypothesis when it happens to be true. Type II error means
accepting null hypothesis when it is false.
The following tables being explain the type of error
Position of Hypothesis Null Hypothesis-Accept Null hypothesis-Reject

H TRUE Correct Decision Type: I Error

H FALSE Type II Error Correct Decision

For instance the level of significance is 5%. It means that five cases of out of 100 are rejecting the H 
which is true. It is possible to reduce type I error by lowering down the level of significance. Both the
type of errors cannot be reduced simultaneously. We have to balance between them.

3. The next step in the testing of hypothesis is calculation of Standard Error (SE). The standard
deviation of the sampling distribution of a statistic is known as Standard Error. The concept of
standard error (SE) is extremely useful in the testing of statistical hypothesis. Note that the SE is
calculated differently for different statistical value.
4. Calculation of Significance ratio: Significance ratio is symbolically described as‘t’. It is
calculated by dividing the difference between parameter and statistic by the standard error
5. Deriving the inference: Compare the calculated value with critical value (table value). If the
observed value is less it is insignificant and vice-versa.
Criteria of usable hypotheses
Hypotheses should be
 Clearly and precisely formulated
 Formulated in such way that, they can be tested or verified (should be testable)

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  Should state explicitly the expected relationship between variables
 Limited in scope. Hypotheses of global significance are not usable as they are not
specific and simple for testing and drawing conclusions.
 Consistent with the known facts.

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