CHAPTER TWO

Research Processes (Overview) and Formulation of the

Research Problem and Hypothesis

1
Unit 2: Research processes (Overview) and Formulation of the
Research Problem and Hypothesis

2.1 Research processes (Overview)

2.2 Choosing Research Topic
2.3 Review of Literature (importance)
2.4 Formulation of Research Problem
2.5 Specification of Research Objective
2.6 Operationalization of Research Objective
2.7 Development of Research Hypothesis

2
 2.1 Formulating and
Clarifying Research Topics

3
Objectives
• Generate ideas that will help in the choice of a suitable research topic
• Identify the attributes of a good research topic
• Turn research ideas into a research project with clear research question(s) and
objectives.

4
Formulating and clarifying research topics is:
• A starting point of a research project
• Time-consuming
• Generating research ideas
• Then turning them into research questions and objectives.

5
Attributes of a good research topic
A good student graduation research:
• Meet the examining body’s requirements
• Linked to theory
• Ensuring symmetry of potential outcomes
• You are capable of undertaking
• E.g., You might not be able to develop a foreign language skills in a project’s life time
• Capability is also affected by your ability to find the time and financial resources to undertake
the research
• Access to any data you might need to collect
• One that excites your imagination.
• Matching your career goals
6
Generating research ideas
Rational thinking technique:
• Examining your own strengths and interests
• Looking at past projects
• Discussion
• Searching the literature.

7
Generating research ideas
Creative thinking technique:
• Keeping a notebook of ideas
• Exploring personal preferences using past projects
• Relevant trees
• Brainstorming.

8
 Identifying a Research Topic

• Defining the problem is the first step and one of the most difficult in
research undertaking.
• Criteria for selecting a research topic:
• Relevance/Significance
• Avoidance of duplication
• Urgency of data needed (timeliness)
• Feasibility of study
• Applicability of results
• Interest to the researcher
• Ethical acceptability

9
Writing research questions
Begin with one general focus research question which flows from
your research idea. Examples:

Research idea General focus research question

The sponsorship of What benefit do commercial

the city football club organizations derive from their
sponsorship?
The adoption of by Will do manufacturing companies
manufacturing devide their workforces into “core” and
companies of “peripheral” workers?
“flexible workforces”
Openning a Where does the shop locate?
handicraft shop 10
Writing research questions
Lead to several more detailed research questions or the
definition of research objectives. Examples:

General focus research Detailed research question

question
Job recruitment via the How effective is recruiting for
internet new staff via the internet in
comparison with traditional
methods?

11
Writing research objectives
Greater specificity than the research questions. Examples:

Research questions Research objectives

•Why have •To identify organizations’ objectives

organizations for team briefing.
introduced team
briefing?

•Has team briefing •To describe the extent to which the

been effective? effectiveness criteria for team briefing
have been met.

12
The importance of theory
• ‘A formulation regarding the cause and effect relationships b/w two
or more variables, which may or may not have been tested’
• If A is introduced, B will be the consequence
• e.g., Marketing manager may theorize that the introduction of loyalty cards
by a supermarket will lead to customers being less likely to shop regularly at a
competitor supermarket

13
2.2 THE RESEARCH
PROCESS

14
 THE RESEARCH PROCESS

• The research process is similar to undertaking a journey.

• For a research journey there are two important decisions to make-
1) What you want to find out about or what research questions (problems) you want to
find answers to;
2) How to go about finding their answers.
• There are practical steps through which you must pass in your research journey
in order to find answers to your research questions.
• The path to finding answers to your research questions constitutes research
methodology.
• At each operational step in the research process you are required to choose
from a multiplicity of methods, procedures and models of research methodology
which will help you to best achieve your objectives.
• This is where your knowledge base of research methodology plays a crucial role.

15
Phases of research process

16
 RESEARCH PROCESS

Research Problem

Literature Review

Research Questions Questions

Quantitative Research Qualitative Research

Research Designs

Quantitative Designs Qualitative designs

Combined Designs •Action research
-Experimental -Mixed methods •Grounded theory
-Correlational - •-Ethnography
-Survey •-Narrative

Sampling Instruments/Pr
N Data Analysis Interpretation
otocols

Discussion, Conclusions, Limitations, Future Research

17
 The Research Process for Basic and Applied
Research
①
OBSERVATION
Broad area
of research
interest
identified

④ ⑦
③ THEORETICAL
PROBLEM FRAMEWORK ⑤ ⑥ DATA
COLLECTION
DEFINITION GENERATION SCIENTIFIC ANALYSIS,
Research OF RESEARCH AND
problem Variables clearly HYPOTHESES DESIGN INTERPRETATION
delineated identified and
labeled

② ⑧
DEDUCTION
PRELIMINARY Hypotheses
DATA GATHERING substantiated?
Interviewing Research question
literature survey answered?
18
 Preliminary Data Collection
• Nature of data to be collected
 Background information on the organization
 Information on management philosophy and structural
factors
 Perceptions, attitudes, and behavioral responses

• Literature survey
 Reasons for literature survey
 Conducting the literature survey
• Identifying the relevant sources
• Bibliographical indexes
 Extracting the relevant information
 Writing up the literature review
19
 The eight-step of research process
• Research methodology is taught as a supporting subject in several ways in many
academic areas and nonacademic areas of management at various levels by people
committed to a variety of research paradigms.
• Though paradigms vary in their contents and substance, their broad approach to
inquiry are similar.
• Such ideas have also been expressed by Festinger and Katz, who in the foreword of
their book, Research Methods in Behavioral Sciences, say that, “Although the basic
logic of scientific methodology is the same in all fields, its specific techniques
and approaches will vary, depending upon the subject matter’.
• Therefore, the model developed here is generic in nature and can be applied to a
number of disciplines in the social sciences, including management.
• It is based upon a practical and step-by-step approach to a research inquiry and each
step provides a smorgasbord of methods, models and procedures.

20
 Considerations
Methods and
and steps in
tools of data
The Research Process
formulating a
research problem collection

Research design: Sampling theory Methods of data

functions and designs processing;
Use of computers and Principles of
statistics scientific writing
Literature
review

Constructing
Formulating Conceptualizing Writing a Writing a
an instrument Selecting Collecting Processing
a research a research research research
For data a sample data data
problem design proposal report
collection

Field test of Editing of Coding

Study designs the the
research data
tool
Variables and Validity and
hypotheses: reliability of the Contents of the Developing a
definition research tool research proposal code book
and typology

What How Conducting of the study 21

 Research process…
• Step I: Formulating a Research Problem
• Formulating a research problem is the first and most important step in the research
process.
• A research problem identifies your destination: it should tell you, your research
supervisor and your readers what you intend to research.
• The more specific and clear you are the better, as everything that follows in the
research process—study design, measurement procedures, sampling strategy,
frame of analysis and the style of writing of your thesis or research report—is
greatly influenced by the way in which you formulate your research problem.
• It is extremely important to evaluate the research problem in the light of the financial
resources at your disposal, the time available, and your own and your research
supervisor’s expertise and knowledge in the field of study.
• It is equally important to identify any gaps in your knowledge of relevant disciplines,
such as statistics, required for analysis. Also, ask yourself whether you have sufficient
knowledge about computers and software if you plan to use them.
22
Problem

• Problem: any situation where a gap exists between an actual and a

desired ideal state.

Slide 3-23
Problem Definition
• A problem does not necessarily mean that something is seriously
wrong with a current situation, which needs to be rectified
immediately. A “problem” could simply indicate an interest in an issue
where finding the right answers might help to improve an existing
good situation. Thus, it is fruitful to define a problem as any situation
where gap exists between the actual and the desired ideal state.

24
Broad Problem Area
• The broad problem area refers to the entire situation where
one sees a possible need for research and problem solving.
• The specific issues that need to be researched within this
situation may not be identified at this stage. Such issues
might pertain to:
1. Problems currently existing in an organizational setting
that need to be solved.
2. Areas in the organization that a manager believes need
to be improved.
3. A conceptual or theoretical issue that needs to be
tightened up for the basic researcher to understand
certain phenomena.
4. Some research questions that a basic researcher wants
to answer empirically.
25
Examples of The Broad Problem Area
• Examples of broad problem areas that a manager
could observe at the workplace:
• Training programs are not as effective as anticipated.
• The sales volume of a product is not picking up.
• Minority group members are not advancing in their
careers.
• The newly installed information system is not being used
by the managers for whom it was primarily designed.
• The introduction of flexible work hours has created more
problems than it has solved in many companies.

Slide 3-26
Symptoms versus Problems

• It is important that symptoms of problems are not defined as the real

problem.
• One way of determining that the problem, rather than the symptom,
is being addressed is a technique called ‘5 Whys’ or ‘5 times why’.
• This approach will help you to get to the root cause (the most basic
cause) of a problem.

Slide 3-27
Symptoms versus Problems
• Keep asking “Why?” until the most basic cause is arrived at.
• Example: My best employees are leaving the organization.
• Why? They are not satisfied with their jobs.
• Why? They don’t find a challenge in their jobs.
• Why? They don’t have control over their work.
• Why? They don’t have enough influence over
planning, executing, and evaluating their work.
• Why? We have been reluctant to delegate.

Slide 3-28
From Problem to Feasible Research Topic

• We need to transform the broad problem into a feasible topic for

research by:
a) making it more specific and precise;
b) setting clear boundaries;
c) selecting a perspective from which we investigate the subject
(Machi and McEvoy, 2012).

• Preliminary research will help us to make these transformations.

Slide 3-29
Preliminary Information Gathering

• Nature of information to be gathered:

1. Information on the organization and its environment – that
is, the contextual factors.
2. Information on the topic of interest.

Slide 3-30
First Review of the Literature

• Helps the researcher to:

• Structure research on work already done
• Develop problem statement with precision and clarity

• Is beneficial in both basic and applied research projects

Slide 3-31
What Makes a Good Problem Statement?

• Good problem statement includes both:

• The research objective
• Research questions

Slide 3-32
A Good Problem Statement

• Research objective: why of the research

• Research objective applied research:

• to solve a specific problem in a work setting;
• to change something.

• Example:
• To determine factors that increase employee commitment to the organization;

• Allows manager to increase commitment and hence to decrease turnover,

absenteeism and increase performance levels.
Slide 3-33
Example

The purpose of this study is twofold:

1. to identify the factors that influence the passenger’s waiting
experience and
2. to investigate the possible impact of waiting on customer
satisfaction and service evaluations.

Slide 3-34
A Good Problem Statement
• Research questions:
• what of the research (what do you want to learn?)
• Translates problem into a specific need for information
• Research questions:
• Are related to the objective
• If objective is unclear we will not be able to formulate research questions
• Example:
• What are the factors that affect the perceived waiting experience of airline
passengers
• To what extent do these factors affect the perception of waiting times?
• What are the affective consequences of waiting
• How does affect mediate the relationship between waiting and service
evaluations?
• How do situational variables (such as filled time) influence customer reactions
to the waiting experience?
Good Problem Statement

• Relevant
• for the organization
• Feasible
• you are able to answer the research questions within the
restrictions of the research project.
• Interesting
• to you!

Slide 3-36
 Step II: Conceptualizing a Research Design
• An extremely important feature of research is the use of scientific methods.
• Research involves systematic, controlled, valid and rigorous establishment of
associations and causation that permit the accurate prediction of outcomes under a
given set of conditions.
• It also involves identifying gaps in knowledge, verification of what is already known
and identification of past errors and limitations.
• The validity of what you find largely rests on how it was found.
• The main function of a research design is to explain how you will find answers to your
research questions. The research design sets out the logic of your inquiry.
• A research design should include the following:
• the study design per se and the logistical arrangements that you propose to
undertake,
• the measurement procedures, the sampling strategy,
• the frame of analysis and
• the time-frame.

37
Step II: Conceptualizing a Research Design…
• For any investigation, the selection of an appropriate research design is crucial in
enabling you to arrive at valid findings, comparisons and conclusions. A faulty design
results in misleading findings and is therefore tantamount to wasting human and
financial resources.
• In scientific circles, the strength of an empirical investigation is primarily evaluated
in the light of the research design adopted.
• When selecting a research design it is important to ensure that it is valid, workable
and manageable.
• There is an enormous variety of study designs and you need to be acquainted with
some of the most common ones.
• Select or develop the design that is most suited to your study.
• You must have strong reasons for selecting a particular design; you must be able to
justify your selection; and you should be aware of its strengths, weaknesses and
limitations.
• In addition, you will need to explain the logistical details needed to implement the
suggested design.
38
 Step III: Constructing an Instrument for Data Collection
• Anything that becomes a means of collecting information for your study
is called a “research tool” or a “research instrument.”
• For example, observation forms, interview schedules, questionnaires,
and interview guides are all classified as research tools.
• The construction of a research tool is the first ‘”practical” step in
carrying out a study.
• You will need to decide how you are going to collect data for the
proposed study and then construct a research instrument for data
collection.
• If you are planning to collect data specifically for your study (primary
data), you need to either construct a research instrument or select an
already constructed one.
• If you are using secondary data (information already collected for
other purposes), develop a form to extract the required data.
• In order to determine what information is required, go through the
same process as described for primary data above. 39
Step III: Constructing an Instrument for
Data Collection….
• Field testing a research tool is an integral part of
instrument construction.
• As a rule, the field test should not be carried out on the
sample of your study but on a similar population.
• If you are planning to use a computer for data analysis,
you may wish to provide space for coding the data on the
research instrument.

40
Step IV: Selecting a Sample

• The accuracy of your estimates largely depends upon the way

you select your sample.
• The basic objective of any sampling design is to minimize,
within the limitation of cost, the gap between the values
obtained from your sample and those prevalent in the
population.
• The underlying premise in sampling is that, if a relatively small
number of units is scientifically selected, it can provide—with a
sufficiently high degree of probability—a fairly true reflection of
the sampling population that is being studied.
• Sampling theory is guided by two principles:
(1) the avoidance of bias in the selection of a sample; and
(2) the attainment of maximum precision for a given outlay
of resources. 41
Step IV: Selecting a Sample…
• There are three categories of sampling design (we’ll focus on):
(1)Random/probability sampling designs;
(2)Non-random/probability sampling designs; and
(3) ‘Mixed’ sampling design.
• There are several sampling strategies within the first two categories.
• You need to be acquainted with these sampling designs to select the one most
• appropriate for your study.
• You need to know the strengths and weaknesses of each and the situations in
which they can or cannot be applied in order to select the most appropriate
design.
• The type of sampling strategy you use also determines your ability to generalize
from the sample to the total population and the type of statistical tests you can
perform on the data.

42
Step V: Writing a Research Proposal
• Now, step-by-step, you have done all the preparatory work.
• Next put everything together in a way that provides adequate information, for your
research supervisor and others, about your research study.
• This overall plan tells a reader about your research problem and how you are planning
to investigate, and is called a research proposal.
• Broadly, a research proposal’s main function is to detail the operational plan for
obtaining answers to your research questions.
• In doing so it ensures—and reassures the readers of—the validity of the methodology
to obtain answers accurately and objectively.
• Universities and other organizations may have differing requirements regarding the style
and content of a research proposal, but the majority of institutions would require most of
what is set out here.
• Requirements may also vary within an institution, from discipline to discipline or from
supervisor to supervisor.
• A research proposal must tell you, your research supervisor and a reviewer the following
information about your study:
• What you are proposing to do;
• How you plan to proceed; and
• Why you selected the proposed strategy. 43
Step V: Writing a Research Proposal…

• Therefore it should contain the following information about your study:

• a statement of the objectives of the study;
• a list of hypotheses, if you are testing any;
• the study design you are proposing to use;
• the setting for your study;
• the research instrument(s) you are planning to use;
• information on sample size and sampling design;
• information on data processing procedures;
• an outline of the proposed chapters for the report;
• the study’s problems and limitations; and
• the proposed time-frame.

44
Step VI: Collecting Data

• Having formulated a research problem, developed a study design,

constructed a research instrument and selected a sample, you then
collect the data from which you will draw inferences and conclusions
for your study.
• Many methods could be used to gather the required information.
• As a part of the research design, you decided upon the procedure
you wanted to adopt to collect your data.
• At this stage you actually collect the data.
• For example, depending upon your plans, you might commence
interviews, mail out a questionnaire, conduct nominal/focused
group discussions, or make observations.
• Collecting data through any one of the methods may involve some
ethical issues, for which you need to think carefully.
45
Step VII: Processing Data
• The way you analyze the information you collected largely depends upon two things:
(1) the type of information—descriptive, quantitative, qualitative or attitudinal; and
(2) the way you want to write your dissertation/report.
• There are two broad categories of report: quantitative and qualitative.
• As mentioned before, the distinction is more academic than real as in most studies you need to
combine quantitative and qualitative skills.
• Nevertheless, there are some solely qualitative and some solely quantitative studies.
• Yes, we’ll look at different ways of analyzing quantitative data and various methods of displaying
analyzed data.
• In addition to the qualitative—quantitative distinction, it is equally important for data analysis that you
consider whether the data is to be analyzed manually or by a computer.
• If your study is purely descriptive, you can write your dissertation/report on the basis of your field notes,
manually analyze the contents of your notes (content analysis), or use a computer program.
• If you want quantitative analysis, it is also necessary to decide upon the type of analysis required (i.e.,
frequency distribution, cross-tabulations, or other statistical procedures, such as regression analysis, factor
analysis, analysis of variance) and how it should be presented. Also identify the variables to be subjected to
these statistical procedures.
46
Step VIII: Writing a Research Report
• Writing the report is the last and, for many, the
most difficult step of the research process.
• This report informs the world of what you have
done, what have you discovered and what
conclusions you have drawn from your findings.
• If you are clear about the whole process, you will
also be clear about the way you want to write your
report.
• Your report should be written in an academic style
and be divided into different chapters and/or
sections based upon the main themes of your study.

47
 Qualities of a Good researcher: Skills Needed for Research
• Research requires a number of qualities and skills, some of which you
may already have; others you will need to develop during the course of
your research.
1. Communication skills- written and verbal communication, Writing and editing skills
2. Intellectual skills-Knowledge (or memory) comprehension;
Application;Analysis;Synthesis (or creativity);and Evaluation skills:Long attention
spans.
3. Library and Information technology and quantitative skills.
4. Organizational skills-time management.
5. Motivation and Curiosity to solve puzzles.
6. Independence

48
Important Ethical Issues in Conducting Research

• Learn about the procedures involved in applying for

approval from your campus institutional review
board
• Recognize guidelines from professional
associations
• Use ethical practices throughout research
• Use respectful data collection procedures
• Show respect to audiences who read and use
research study information

49
2.3 Review of Literature
(importance)

50
 2.3 Review of Literature
 Literature Review involves a systematic search of
published and unpublished sources of information to
identify items relevant to a particular requirement.
― With advancement of technology, it may be accessed in
the form of books, journal articles, videos, cassette tapes,
conference papers, reports, theses, patents, standards or
other types of information sources.
― Its purpose is to become familiar with the existing
literature in the area of the topic in general and in the
selected topic in particular

51
Cont’d…
 Reading or review for research could take place in three stages
of the research project. Theses include the following
1. At the beginning of the research: the objective here is
• To check what other research has been done
• To focus your idea, and
• To explore the context for your project

52
Cont’d…
2. During your research: with the objectives of
 keeping your interest and up to date with development
 helping you better understand the method you are using and the
field you are researching and,
 serving as a source of data
3. After your research, with the objectives of
 seeing what impact your own work has had, and
 helping you develop ideas for further research project

53
Importance of Reviewing Literature
 Once a researcher has chosen a specific topic, the next
step is reviewing the existing literature in that topic
area.
 Review can be done on
 research which is directly related to your
research topic and
 research which is indirectly related to it which
may be simplified if it is identified through the
article title and the abstract.

54
 Cont’d…
 Reviewing literature can be time-consuming, daunting and
frustrating, but it is also rewarding and absolutely indispensable
task because it answers several questions related to the topic area.
 Has the work already been done?
 Who are the experts in the field?
 What are the main theoretical perspectives?
 What are the common research methods in the topic?
 What are the main problems in researching the topic?
 Are there any major controversies in this topic area?
 Is the topic open to hypothesis testing?
 Is the topic a trivial one?

55
 What Should the Literature Review Do?
By providing answers to the earlier questions, review is done so
as :
• to sharpen and focus your initial research questions or even suggest
new research questions.
• to provide a wide and deep knowledge of the theoretical, empirical
and methodological issues
• to provide a ‘bridge’ between your research questions and your
research findings.
• to enable you to speak with authority on your research topic and the
wider subject area.
• to compare your research methods, theoretical framework and
findings with work already done.
• to set the scope and range of your research topic.

56
Some General Points in Literature Reviewing
Reviewing academic literature is not the same as
just reading it, but Critical Reading!
You need to think about the ideas, the research
methods, how the data was collected, and how the
findings have been interpreted.
• Here are some questions which you should keep in
mind when studying (not just reading) academic
literature

61
Cont’d…
For any given piece of work:
• Is there a theoretical framework?
• If so, what is it and how does it fit into this topic?
• Does the work provide links to other work in the topic?
• Is there an empirical aspect to the work?
• If so, what is its basis?
• Does the work relate to a specific social group?
• Does it relate to a particular place?
• How applicable might it be outside the latter two?
• How old is the work?
• Is it still valid?
62
 Obtaining Literature Sources
Literature searching involves a systematic and methodical search of published sources
of information to identify items relevant to a particular requirement.
The sources of literature including journals, books, reports, abstracts, and electronic
websites, among others.
• The ‘literature’ involved may be in the form of books, journal articles, videos, cassette tapes,
conference papers, reports, thesis, patents, standards or other types of information sources.
• Using library search engines, Internet search engines and other databases.
Though World Wide Web (www) can provide good materials, one has to ensure the
credibility of the material/article( referred journals)

63
 ASSESSING THE QUALITY OF
LITERATURE
 In assessing the quality of published work, you need to
consider the following questions
• Who takes ultimately responsibility and legitimate for
the contents ?- official approval and copyright
holder?
• Are the contents in the report writing accurate /free
from error and can it be verified ?
• When was submitted and get accepted for publication

64
Steps in Reviewing Literature

There are four main steps in conducting a literature

review.
1. Search for existing literature in your area of study
2. Review the literature selected
3. Develop a theoretical and empirical framework
4. Writing up literature.

65
 1. Plan your information search
Spent time to think about what you really want to find information on the
wider idea already in mind.
Consider the following aspects of your search:
• Scope—is the information you require—a core element of your topic, or
tangential to your central topic?
• Timescale—how far back is the information of relevance? Must it be
recent? Published in the last five years? Or historical?
• Range—do you need local information only? Regional? National or
international?
Most importantly, select the key concepts: search involve from these
concepts, generate a number of subjects or keywords from broader to more
specific to the topic.

66
 2. Review the Literature Selected
• Consult library catalogues, general subject guides and
bibliographies to establish indexing tools that can bring
most useful for your topic
• Using the selected sources search through the subject
indexes to trace relevant articles
• Be methodical and patient. Information searching can be
frustrating, and there are times when you will either find
too much or too little
• When you do find relevant articles or books, note down
the full bibliographic reference.
• Depending on the results, you may wish to extend your
search by accessing information sources outside the
library.
67
 Cont’d…
• Literature review needs to critically review published works
done in the area.
A Critical Review involves structuring and building a logical
and coherent argument. It should flow smoothly from one point
to the next, drawing upon evidence, and where possible, present
alternative viewpoints
• It might also involve evaluating the quality of the evidence
presented to support an argument, and not simply describing it.
In other words, ‘critical evaluation’ helps one to assess the
quality of other peoples work, their limitations and gives a
positive indication for future research

68
Cont’d…
Critical review involves critical reading, thinking
and analysis of published works.
Critical Reading involves recognizing not only what a text
says but also how the text portrays the subject matter.
―The goals of critical reading are therefore:
• To recognize an author’s purpose.
• To understand tone and persuasive elements.
• To recognize bias by the author(s)

69
Cont’d…
Critical Thinking involves to:
• Reply with reason rather than emotion.
• Require evidence, ignore no known evidence,
• Are concerned more with finding the best explanation
than being right.
• Analyze apparent confusion and ask questions.
• Weigh the influence of motives and biases.
• Recognise our own assumptions, prejudices, biases or
points of view, alternative interpretations.
• Evaluate all reasonable inferences & Accept new
priorities
• Accept a new explanation, model or paradigm
70
 Cont’d…
In thinking critically about what you read, it is
useful to answer a range of questions to help focus
your thoughts.
 Summary and Definition Questions
• What is (are)…?
• Who…?
• When…?
• How much…?
• How many…?
• What is an example of…?

71
 Cont’d…
Analysis Question
• How…?
• Why…?
• What are the reasons for…?
• What are the functions of…?
• What is the process of…?
• What other examples of…?
• What are the causes/results of…?
• What is the relationship between…and…?
• How does…apply to…?
• What is (are) the problem(s) or conflict(s) or issue(s)…?
• What are possible solutions/resolutions to these problems or conflicts or issues…?
• What is the main argument or thesis of…?
• How is this argument developed…?
• What evidence or proof or support is offered?
• What are other theories or arguments from the authors? 72
 Cont’d…
Hypothesis Question
• If…occurs, then what happens…?
• If…had happened, then what would be different…?
• What does theory X predict will happen…?
Evaluation Questions
• Is…good or bad…?
• Is…correct or incorrect…?
• Is…effective or ineffective…?
• Is…relevant or irrelevant…?
• Is…clear or unclear…?
• Is…logical or illogical…?
73
 Cont’d…
• Is…applicable or not applicable…?
• Is…proven or not proven…?
• Is…ethical or unethical…?
• What are the advantages /disadvantages of…?
• What are the pros and cons of…?
• What is the best solution to the problem/conflict/issue?
• What should or should not happen…?
• Do I agree or disagree…?
• What is my opinion of…?
• What is my support for my opinion?

74
3. Develop Theoretical and Empirical Framework
 The information obtained from different books and
journals need to be sorted under :
• the main themes and theories
• highlighting agreements and disagreement among the
authors and
• identifying the unanswered questions or gaps.

75
 4. Writing Literature
It has three components: The introduction, The body and conclusion.
i. The introduction should:

Define or identify the general topic, issue, or area of concern, thus

providing an appropriate context for reviewing the literature.

Point out overall trends in what has been published about the topic; or
conflicts in theory, methodology, evidence, and conclusions; or gaps in
research

Establish the writer's reason (point of view) for reviewing the

literature; explain the criteria to be used in analyzing and comparing
literature

76
 Cont’d…
ii. The body should:

• Group research studies and other types of literature

(reviews, theoretical articles, case studies, etc.) according
to common denominators such as research approaches,
conclusions of authors, specific purpose or objective, etc.

• Summarize individual studies

• Make comparisons and analyses.

77
 Cont’d…
iii. The conclusion should:

 Summarize major contributions of significant studies and

articles to the body of knowledge under review, maintaining the
focus established in the introduction.

 Evaluate the current "state of the art" by pointing out major

methodological flaws or gaps in research, inconsistencies in
theory and findings, and areas or issues pertinent to future study.

 Conclude by providing some insight into the relationship

between the central topic of the literature review and a larger
area of study (rationale)

78
 Cont’d…
 Questions to ask yourself when writing up
What are
What are
the
the key
epistemolo
What are theories,
gical and
the key concepts
ontological
sources? and ideas?
grounds for
the
What are the
discipline? main
What are questions
the major
Literature and
issues and search and problems
debates review on that have
about the been
topic? your topic addressed
How tois
date?
What are knowledge
the What are on the
political the origins topic
standpoint and structured
s? definitions and
of the organised?
topic?

79
 Evaluating the Literature
It is evaluated from its Relevance and Sufficiency point of
view and Checklists for evaluating literature include:
 How recent is the literature?
 Is the item likely to have been superseded?
 Does the literature support or contradict your arguments?
 Does the literature appear to be biased?
 Is the context sufficient?
 What are the methodologies used in the study and are
they appropriate?

80
2.4 Formulation of Research
Problem

81
2.4 Formulation of Research Problem
 After selecting a specific research topic and conducting a
thorough literature review, you are ready to take the next
step in planning a research study: clearly articulating the
research problem and it is often the most difficult.
• It must be identified with adequate specificity.
• It is at this point in many studies that hypotheses are
generated.
• Variables must be identified and defined adequately so
that necessary data can be collected

82
Cont’d
A Research Problem is some difficulty which an individual or
organization faces in the context of either a theoretical or a practical
situation and wishes to obtain a solution for the same.
• A researcher must find the problem and formulate it so that it becomes
susceptible to research.
• A research problem must contain the following.
a. An individual or an organization which has the problem
b. They must occupy some environment /condition/ to which the
difficulty pertains.
c. Some objective/goal to be attained
d. Some alternative course of action through which these objectives
can be attained.
e. Researcher must have some doubts regarding the selection of
possible alternatives.

83
 Importance of Formulating a Research Problem
 Clear definition/formulation of research problem is
important, beacause:
• Formulating a research problem is foundation/ prerequisite -the

first and most important step in the research process than its
solution
• It is like determination of the destination before undertaking a

journey.
• In order to discriminate relevant data from irrelevant ones.

• Reduce hurdle and misleading outcome from Ill-defined

problem .
• Considered as a problem clearly stated is a problem half solved.

84
 Cont’d…
 In general, the way you formulate your research

problem determines almost every step that follows

in the research process:
 the type of study design that can be used;
 the type of sampling strategy that can be employed;
 the research instrument that can be used; and
 the type of analysis that can be undertaken.
 the quality of the research report (output)

85
 Statement of Problem
 The statement of problem is the focal point of your research. It is
just one sentence that can be easily identified
 The problem statement is one sentence, accompanied by several

paragraphs that elaborate the problem, which may include:

 Persuasive arguments why the problem is important enough to

study.
 The brief opinion of other researchers (empirical) and the gap

 Explanations as to how the problem relates to business, social or

political trends by presenting data that demonstrates the scope and

depth of the problem.
 Statement of the problem usually may end up with research

questions.

86
 Research Questions
Research Questions (RQs) are refined statements of the
specific components of the problem.
The fundamental questions that must be answered by the
researcher at this point are:
o What is the problem and why should it be studied?
o Why do we want to carry out research?
o What do we hope to achieve?
 These questions require
 Problem identification
 Problem analysis and prioritization
 Justification
 Developing critical research questions
 Formulation of general and specific objectives
 Formulation of hypothesis

87
Sources of Research Problems/Topics
 where and how can we find research topic?
 Reading/literature
 Academic Experience
 Daily experience and observation
 Exposure to field situation
 Consultation and discussion with others
 Brainstorming
 Research
 Intuition
 New Innovation and others

88
 Steps in Formulating Problems
 The formulation of a research problem is the most
crucial part of the research journey on which the
quality of the entire project depends. Steps include:
1. Identify a broad filed or subject area of interest:
• What is it that really interest me as a professional? This

will help you to find an interesting topic and one which

may be of use to you in the future.
2. Dissect the broad area in to subareas:
• Exhaustively list the subareas from the various sources.

89
 Cont’d…
3. Select what is of most interest to you:
• it is neither advisable nor feasible to study all subareas. Select one
with which you are more passionate about. Your interest should be
the most important determinant for selection
4. Raise research questions:
• Within your chosen subarea, list whatever questions you want to find
answers and if you think they are too many to be manageable, go
through a process of deletion.

90
 Cont’d…
5. Formulate objectives:
• Formulate your main and sub objectives. Your objectives

grow out of your research questions

 The main difference between objectives and research questions is
the way in which they are written.
 Research questions are obviously questions while objectives

transform these questions in to aims by using appropriate action

oriented words such as “to find out, to determine, to ascertain, to
examine and soon…”.

91
 Cont’d…
6.Reassess your objectives:
• Examine your objectives to ascertain the feasibility of achieving
them through the research endeavor (SMART). Consider each of the
objectives in light of time, resources (human and financial) and
technical expertise at your disposal.
7. Double check:
• Go back and check that
 You are really interested in the study
 You agree with the objectives
 You have adequate resources
 You have the technical expertise to undertake the study

92
How to Evaluate a Research Problem
 Research problem shall be evaluated in terms of:
 Specificity and clarity
 Feasibility:
• sufficient resources (time, money, skills…)
• levels of difficulty & potential reward
• access – groups /individuals /records
• ethical concern
 Provable or testable
 Academically interesting/significant
 fill a gap in theory
 important (influential /critical/special/unique ) population
 unique methods or provide opportunities for a fruitful exploration
with known techniques
 implications for a wide range of practical problems
 timely

93
2.5 Specification of Research
Objective

94
 2.5 Specification of Research Objective
 The main objective is an overall statement of the thrust of
the study. It is also a statement of the main association and
relationships that the researcher seeks to discover or
establish.
 The sub objectives are the specific aspects of the topic that

the researcher want to investigate with in the main

framework of his/her study
 The way the main and sub objectives are worded

determines how your research is classified( descriptive,

exploratory, explanatory, correlational etc..)

95
Cont’d…
 Characteristics of research objective:
1. Clear
2. Complete
3. Specific
4. measurable
 The objective should start with words such as:
 To determine
 To find out
 To ascertain
 To measure
 To explore etc…

 There should not be a place for ambiguity, non-specificity or

incompleteness either in the wording of the objectives or in
the ideas they communicate.
96
2.6 Operationalization of Research Objective

97
 2.6 Operationalization of Research Objective
 The main aim of formulating a research problem is to clearly and
precisely define the research problem. In defining the problem, the
researcher may use certain words or items that are difficult to measure
and/or the understanding of which may vary from respondent to
respondent.
 In a research study it is important to develop, define or establish a set of

rules, indicators or yardsticks in order to clearly establish the meaning of

such words/items.
 In this regard, having a clear understanding of unit of analysis, concepts,

constructs and variables will be essential in operationalizing a research

objective/problem.

98
 Cont’d…
Unit of Analysis (UoA)- refers to the person, collective, or object that is
the target of the investigation, which typically include individuals, groups,
organizations, countries, technologies, objects, and such.
• Eg. Individual in shopping behavior; groups in characteristics of
teamwork; firms in improvement of profitability; country in
differences of national cultures; web page in attractivness of web pages
more attractive; and soon
• Understanding the UoA is important because it shapes what type of data
you should collect for your study and who you collect it from.

99
 Cont’d…
It may sometimes be fairly complex task to identify unit of analysis.
o Examples
• In a study why certain banks have high nonperforming loan, the UoA
becomes the bank, and not loan or borrowers dishonoured the loan. Because
the object of our inquiry is the bank and not borrowers.
• To compare different types of loans in different banks, such as Short Term,
Medium term, Long term & so forth, our UoA becomes the loan.
• To study why borrowers failed to pay what they owed, then the UoA
becomes the borrowers

100
Conversion of Concepts in to Variables

Concept Indicators Variables

Concept Indicators Variables Decision level
(Example) ( Working definition)

Rich • Income • Income per year • Rich If > Birr 100,000

• Assets • Total values of • Rich If > Birr 250,000
assets

High • Average marks • Percentage of • High achiever if > 75%

academic marks
achievement obtained in
examination

112
 Cont’d…
Types of Variables
I. Depending on their Intended Use
1. Independent variable (IV): that explain/affect other variables.
2. Dependent Variable (DV): explained /affected by other variables.
3. Extraneous Variable: IVs that are not related to the purpose of the
study, but may affect the dependent variable.
4. Mediating /Intervening Variable: explained by independent
variables while also explaining dependent variables,
5. Moderating Variable: strong contingent effect on the relationship
between independent and dependent variables

113
Dependent variable
• The dependent variable is the variable of primary interest to the
research. The researcher’s goal is to explain or predict the variability
in the dependent variable.

114
Independent variable
• An independent variable is one that influences the dependent
variable in either a positive or a negative way. That is, when the
independent variable is present, the dependent variable is also
present, and with each unit of increase in the independent variable,
there is an increase or decrease in the dependent variable also.

New product Stock market

success price

Independent variable Dependent variable

Managerial values Power distance

Independent variable Dependent variable

115
Moderating variable
• The moderating variable is one that has a strong contingent
effect on the independent variable-dependent variable
relationship. That is the presence of a third variable (the
moderating variable) modifies the originally expected
relationship between the independent and the dependent
variables.

Number of books Reading abilities

Independent variable Dependent variable

116
 Number of books Reading abilities

Independent variable Dependent variable

Parents literacy

Moderating variable

Organizational
Workforce diversity
effectiveness

Independent variable Dependent variable

Managerial
expertise

Moderating variable
117
Intervening variable
• An intervening variable is one that surfaces between the time the
independent variables operate to influence the dependent variable
and their impact on the dependent variable. There is thus a temporal
quality or time dimension to the intervening variable.

Willingness to learn

Training programs
Growth needs 118
 Effects for those high in
growth needs

Willingness to learn

Effects for those low in

growth needs

Training programs

119
Time: t1 t2 t3

Workforce diversity Creative Reading abilities

synergy
Independent variable Dependent variable
Intervening variable

Time: t1 t2 t3

Workforce diversity Creative Reading abilities

synergy
Independent variable Dependent variable
Intervening variable

Managerial
expertise

Moderating variable
120
 Cont’d…
Example:
The Impact 0f Advertisement on Profitability of the Firm

Intervening Variable
•Frequency of ads.
•Quality of ads
Independent Dependent Variable
Variable
Advertisement Profit

•Size Extraneous variable

•Age
•Financial policy
121
 Cont’d…
II. Depending on Unit of Measurement Used
Categorical Variables: are variables that cant take specific value and
1.
can be measured on nominal or ordinal measurement scales and
Includes:
a) Constant-when a variable can have only one value or category as
water, taxi, etc
b) Dichotomous-when variable can have only two categories as
male/female, yes/no, good/bad, rich/poor, etc.
c) Polytomous- when a variable can be divided in to more than two
categories as religion ( Christian, Muslim, Hindu, buhdisim).
 Note that most of categorical variable are Qualitative Variables as

both use either nominal or ordinal measurement scales.

122
 Cont’d…
2. Continuous Variables: are variables having continuity in
their measurement.
Example: age(child, young, old), income (low, middle,
high) etc..
 Note that most of continuous variable are Quantitative
Variables as both use either interval or ratio measurement
scales. Articulate Invoke

123
2.7 Development of
Research Hypothesis

124
2.7 Development of Research Hypothesis
The word hypothesis is made up of two Greek
words(Hypo+ thesis=Hypothesis)
 Hypo- tentative or subject to the verification
 Thesis= means statement about solution of a
problem
• Hypothesis is the principal instrument of research.
• A predictive statement, capable of being tested
by scientific methods, that relates an independent
variable to some dependent variable
• “A hypothesis is a proposition to be tested or a
tentative statement of a relationship between two
variables” (Neumann, 2000)
125
 Cont’d…
Hypothesis is a set of suggested tentative solution of a
research problem/question.
Hypotheses is an assumption about a phenomena,
relationship or situation, the reality or truth of which you do
not know.
A hypothesis is a proposition, condition, or principle
which is assumed perhaps without belief, in order to draw
out its logical consequences and this method to test its
accord with facts which are known or may be determined.
Hypothesis is a proposition that is stated in a testable form
and that predicts a particular relationship between two or
more variables.
Hypothesis is a tentative statement about something, the
validity of which is usually unknown.
126
Importance of Hypothesis
1. It places clear and specific goals
2. It provides direction to research
3. It sensitizes the individual facts and conditions that might otherwise
be overlooked
4. It is a guide to the thinking process and the process of discovery.
5. It help to focuses on research.
6. It may enable you to add to the formulation of theory and help you
to bridge the gaps in the body of knowledge.
7. It serves as a framework for drawing conclusions.
8. It prevents from doing a blind research.

127
Characteristics of Good Hypotheses
1. A hypothesis should be simple, specific, and conceptually
clear. A good hypothesis is the one which is based on the
operationally defined concepts. It should be uni-dimensional,
that it should test only one relationship at a time.
2. It should not be framed as a question- i.e. it should be
framed as a descriptive statement.
3. A hypothesis should be capable of verification: Methods
and techniques must be available for data collection and
analysis. It should be formulated in a way that can be tested
directly and found to be probably true or probably false.

128
 Cont’d…
4.A hypothesis should be related to the body of knowledge: It
is important that your hypothesis emerges from the existing
body of knowledge, and that it adds to it, as this is an
important function of research. This can only be achieved if
the hypothesis has its roots in the existing body of knowledge.
5. A hypothesis should be operationalisable: That is, it can be
expressed in terms that can be measured. If it can not be
measured, it can not be tested and hence no conclusions can
be drawn.

129
 Approaches to Develop Hypothesis
1. Discussions with colleagues and experts about the problem,
its origin and the objectives in seeking a solution;
2. Examination of data and records, if available, concerning
the problem for possible trends, peculiarities and other clues;
3. Review of similar studies in the area or of the studies on
similar problems; and
4. Exploratory personal investigation which involves original
field interviews on a limited scale with interested parties and
individuals with a view to secure greater insight into the
practical aspects of the problem.

130
Types of Hypothesis
 Hypothesis of Difference Vs Relationship
 Hypothesis of Difference- a hypothesis in which a

researcher stipulates that there will be a difference but does

not specify its magnitude
Eg. There is no significant difference in the proportion of
male and female employees in private sector
 Hypothesis of Point Prevalence – a hypothesis that state the

outcome of a treatment program in quantitative units since

the researcher might have enough knowledge about the topic
to speculate almost the exact prevalence of the situation
Eg. Sixty percent of males and thirty percent of females are
employed in private sector.

131
 Cont’d…
 Hypothesis of Association- a hypothesis that speculates the
extent of a relationship
Eg. There are twice as many male employees as female
employees in private sector.

132
 Cont’d…
 Preposition Vs If-then Form of Hypothesis
 Prepositions- hypothesis are stated in declarative statement

form.
Eg: Employees who are more healthy will take sick leave
less frequently.
 If…, then Statement- hypothesis are stated in
clause/conditional form
Eg: If employees are more healthy, then they will take sick
leave less frequently.

133
 Cont’d…
 Direction of Hypothesis
 Directional Hypothesis- postulate the direction of the

relationship or difference using phrases like positive,

negative, less than, more than and soon.
Eg: The higher the risk, the higher the expected return
Women are more motivated than men

 Non-Directional Hypothesis- postulate the presence or

absence of relationship or difference, but do not show the
direction of relationship or difference.
Eg: There is no relationship Between Risk and Return.

134
 Cont’d…
 Null Vs Alternative Hypothesis
 Null Hypothesis (H0)— is the presumption that is supported
as correct unless there is strong/ sufficient evidence against it
or to reject it or proved to be false.
 It is the hypothesis to be tested

• It is the one the researcher wishes to disprove or trying to

reject based on evidence

 Failing to reject Ho doesn’t prove that Ho is true , but simply

the evidence failed to disprove Ho.

• Because proving Ho to be true needs to use/know the whole

population parameter, which is not the case in point. Hence,

Ho can never be accepted; we can only fail to reject a
hypothesis
135
 Cont’d…
• This is the same as the situation in the courts. In courts we
heard judges saying, “Found not guilty” when they release a
suspect free. They never say “he is innocent”. The suspect is
released may be because the prosecutor or the police fail to
provide the court with convincing evidence beyond
reasonable doubt that the suspect has committed the crime.
• Ho contain the word “no” or “equal sign”
Eg- Ho: There is no relationship between Risk and Return

136
 Cont’d…
 Alternative Hypothesis (Ha)— is an opposite of the null
hypothesis and it is thus supported when H0 is rejected.
• Ha is the research hypothesis
• Ha is usually the one which one wishes to prove
Eg- Ho: There is relationship between Risk and Return

 Decision Rule is the statistical rule that specifies the

conditions under which the hypothesis may be rejected.
• We decide whether or not to reject the hypothesis by following the
decision rule.

137
Procedures for Hypotheses Testing
 Hypothesis Testing- is a procedure based on sample
evidence and probability theory to determine whether the
hypothesis is a reasonable statement.
• Making a Formal Statement-Ho And Ha
• Select the Significant Level
• Deciding the Distribution to Use
• Selecting Random Sample and Computing an
Appropriate Value
• Calculation of The Probability
• Comparing the Probability with Table Value.

138
Procedures for Hypotheses Testing
• Exampe: If a hypothesized mean is 70 and the sample
mean is 69.5 we musts make a judgment about the
difference 0.5. Is it a true difference, i.e a significant
difference, or is due to chance / sampling. To answer this
question we conduct a test of significance, commonly
referred to as a test of hypothesis

139
 Cont’d…

Step I. Making a Formal Statement-Ho And Ha

• Specify the hypothesis clearly
Step II. Select the Significant Level
• It is sometimes called Level of Risk and denoted by
Alpha- 
• Level of Significance is the probability of rejecting the
null hypothesis when it is True.
• There are three standard significance levels expressed in
percentage and these are ( = 1%, 5% and 10%) which
should be chosen with great care, thought and reason
• It is the maximum risk assumed and Usually determined in
advance before testing the hypothesis

140
 Cont’d…
To illustrate how it is possible to reject a true hypothesis
suppose that a computer manufacturer purchase a
components form a supplier. Suppose the contract specifies
that the manufacture’s quality assurance department will
sample all incoming shipment of component. If more than
6% of the components sampled are substandard, the
shipment will be rejected.
The null hypothesis is:
Ho: the incoming shipment of components contains 6% or
less substandard components.
i.e. Ho: µ ≤ 6%
The alternative hypothesis is:
Ha: More than 6% of the components are defective.
i.e. Ha: µ > 6%
141
 Cont’d…
Type I Error-Case I: Sample Case
• A sample of 50 components just received revealed
that 4 components or 8% (Sample Statistics) were
substandard.
• Decision: Reject the Ho (µ ≤ 6%) and support Ha (µ >
6%), thus the shipment was cancelled because it
exceeded maximum of 6%.
• Thus, If the shipment was actually substandard, then
the decision to return the component to the supplier
was correct.

142
 Cont’d…
Type I Error-Case II: Population Case
• However suppose the 4 components selected in the sample
were the only substandard components in the shipment of
4,000 components. That means only 1% (population
parameter) were defective.
• Decision: supported the Ho (µ ≤ 6%) and rejected Ha (µ >
6%), thus in that case cancelling the shipment was an error.
• In terms of hypothesis testing, we rejected the null
hypothesis that the shipment was not substandard when we
should not have rejected it.
• By rejecting a true hypothesis, we committed a Type I
Error.

143
 Cont’d…
• Type I Error is rejecting the null hypothesis-Ho,
when it is actually true.
Eg: Cancelling the shipment, but the shipment fulfil
the standard quality
• The probability of committing another type of error,
Type II Error, is designated , beta, failure to reject
Ho when it is actually false.
Eg: Accepting the shipment, but the shipment do not
fulfil the standard quality

144
 Cont’d…
• Type I Error-Case I: Sample Case
• Suppose 2 of the 50 component in the sample (4%)
tested were substandard and 48 were good.
• Decision: supported the Ho (µ ≤ 6%) and rejected Ha (µ >
6%), thus in that case accepting the shipment was an correct.
• Thus, If the shipment actually fulfil quality standard,
then the decision to accept the shipment was
correct.

145
 Cont’d…
Type II Error-Case II: Population Case
• However suppose the 600 components selected were
substandard components in the shipment of 4,000
components. That means only 15% (population parameter)
were defective.
• Decision: Reject the Ho (µ ≤ 6%) and Support Ha (µ > 6%),
thus in that case accepting the shipment was an error.
 Thus, in terms of hypothesis testing. we support the null
hypothesis that the shipment was not substandard when we
should have rejected it.
• By rejecting a true hypothesis, we committed a Type II
Error.

146
 Cont’d…
Thus, when a hypothesis is tested, there are four
possible outcomes:
1.The hypothesis is true and our test may lead to
acceptance.
2.The hypothesis is false and our test may lead to rejection.
3.The hypothesis is true but our test may lead to rejection.
4.The hypothesis is false but our test may lead to
acceptance

147
 Cont’d…
AAdecision
 decision may
may be
be correct
correct in
in two
two ways:
ways:
Fail
 Fail to
to reject
reject aatrue
true H0
H0
Reject
 Reject aa false
false H0
H0
AAdecision
 decision may
may be
be incorrect
incorrect in
in two
two ways:
ways:
Type
Type II Error:
Error: Reject
Reject aa true
true H0
H0
•• The
The Probability
Probability ofof aaType
Type II error
error isis denoted
denoted by .
by .
•• isiscalled
calledthe
thelevel
levelof
ofsignificance
significanceof ofthe
thetest
test
Type
Type II II Error:
Error: Fail
Fail to
to reject
reject aa false
false H0H0
•• The
The Probability
Probability ofof aaType
Type IIII error
error isis denoted
denoted by .
by .
•• 11--isiscalled
calledthe
thepower
powerof ofthe
thetest.
test.
  and
 and  are
are conditional
conditional probabilities
probabilities
148
 Cont’d…
A Contingency Table illustrates the possible outcomes of a
statistical hypothesis test.

149
 Cont’d…
Step III: Find the Test statistic
Test Statistic – a value, determined from sample
information, used to reject or not to reject the null
hypothesis.
• There are many test statistics, Z (the normal distribution
for n  30), the student t test, F, and X2 -the chi –square.
• In hypothesis testing the test statics, Z is computed as:

150
 Cont’d…
Step IV: Determine the Decision Rule
 Decision Rule is a statement of the conditions
under which the null hypothesis is rejected and the
conditions under which it is not rejected.
• The region or area of rejection defines the location
of all those values that are so large or so small that
the probability of their occurrence under a true null
hypothesis is rather remote. i.e the alpha
• Sampling distribution for the statistic Z, 0.05 level of
significance.

151
 Cont’d…

The above chart portrays the rejection region for a test of

significance.
Standard test statistic Z is normally distributed .
The level of significance selected is 0.05.
Critical Value is the corresponding value of the test
statistic for the selected level of significance (5%) is 1.645
& it separate two parts
The null hypothesis is not rejected left of 1.65
The area of rejection is to the right of 1.65
152
…

153
 Cont’d…
Steps V: Take a Sample and Made a Decision
Test the data of sample and make decision to reject
or not to reject the null hypothesis.
 There are two methods to make decisions:
• Critical Value Method
• P-Value Method

154
 Cont’d…
1. Critical Value Method
 Compare test statistics calculated with test
tabulated/CV, and If the value of Test Statistics is
greeter than the Critical Value, Reject Ho.
 Test Statistics is calculated value using formula
 Critical Value is table value to be read from table
• CV for one tail= Test Tabulated of ( 0.5 -  )
• CV for two tail= Test Tabulated of (0.5 - /2 )

155
 Cont’d…
2. P-Value Method
 Compare P-Value with Level of Significance, and If
P-Value is less than the Level of Significance, Reject
Ho.
• Probability Value (P-Value) –refers to the probability of
observing a sample value as extreme as, or more extreme
than the value observed, given the null hypothesis is True
• How confident we are in rejecting Ho?
• P-Value provide the strength of rejection or acceptance
• Smaller P-Value indicates that there is little likelihood the
Ho is true and Higher P-Value indicate that there is little
likelihood the Ho is False.
156
 Cont’d…
P-value can be obtained from:
• Statistical packages that provide its value
• P-Value can also be calculated as:
 P-Value for one tail= ( 0.5 – probability of the Test Calc)
 P-Value for two tail= 2( 0.5 – probability of the Test Calc)
The result of P-Value can be interpreted as:
• If P-Value < 0.10, we have some evidence that Ho is not true.
• If P-Value < 0.05, we have strong evidence that Ho is not true.
• If P-Value < 0.01, we have very strong evidence that Ho is not true.
• If P-Value < 0.001, we have extremely strong evidence that Ho is
not true.

157
 One-Tailed and Two-Tailed Tests
1. Two Tailed
• The region of rejection consists of to tail of the curve and
does not state a direction (for Non-Directional Hypothesis)
Eg: Whether a new Production brought change in Quantity produced
assuming that old capacity= 200;  = 1%; n = 50; S.d = 16 & mean =
203.5
H0: µ1 = 200 & H1: µ1 ≠ 200
2. One Tailed Test
• The region of rejection is only in one tail of the curve (for
Directional Hypothesis)
Eg: Whether a new Production improved Quantity
produced (from 200)
Ho: µ1 ≤ 200 & H1: µ1 > 200
158
 Cont’d…

P-Value……………….0.1212…………………………………..........................…0.0606

Deision: Fail to reject Ho in both cases that 159