Session 2

Problem Definition and

Hypothesis Construction
 Overview of the Scientific Method
• Problem Definition
• Development of hypotheses / models
• Design of research to test hypotheses
• Acquisition of meaningful empirical data
• Analysis and evaluation of data
• Explanation of the phenomenon
• (Recommendations as to action)
 Data, Information and Knowledge
• Data – Facts or recorded measures
• Information – A body of facts in a format which
facilitates decision making or defines
relationships
• Knowledge – A blend of information,
experience, and insights which provide a
framework for assessing new information
• Database – Collection of raw data arranged in a
logical manner and stored on a computer.
 How data is used at Tesco (1).
• Every purchase by every customer is
recorded
• 92% of customers who shop at Tesco
have a Clubcard
• A Clubcard entitles the owner to a 1%
discount on everything purchased – as a
“thank you” for the information
• Tesco make about 3.5% extra profit due to
this information
 How data is used at Tesco (2).
• Data is analysed by cluster sampling
• Data is segmented by demographics,
ACORN, geography and benefits
• Customisation (CRM)
• Customer Retention / Loyalty / Advocacy
• Stock control / Logistics / JIT
• Faster reactivity to changing trends
Learning: Link to Research

Kolb (1979) linked theory to practice and

characterised this link by an attempt at
explaining observations. One could loosely
infer from his cycle that from explanations,
predictions and expectations could result.
These actions have links to a research
approach.
 Kolb Cycle
Concrete
Experience
(Feeling)

Active Reflective
Experiment Observation
-ation (Watching)
(Doing)

Abstract
Conceptualisation
(Thinking)
 Reasoning

Answers to questions surrounding theories

and hypotheses in research can enable us
to distinguish research methods, broadly
into those that are deductive and those
that are inductive. Additionally, if we relate
this to Kolb’s learning cycle, the deductive
approaches can be seen to correspond to
those traits on the left hand side of the
cycle and the inductive approaches to
those on the right hand side
Kolb Cycle and Reasoning
Concrete
Experience
(Feeling)

Active Reflective
Experiment Deductive Inductive
Observation
-ation (Watching)
(Doing)

Abstract
Conceptualisation
(Thinking)
 Deduction
• Thailand is a hot country

• Thai people like hot spicy food

• People who live in hot countries will like

hot spicy foods!
 Induction
• I observe hotel prices in Thailand go down
when there is political unrest in the country

• I induce from this that there is a

relationship between hotel prices in
Thailand and political stability in the
country
Empiricism, Concepts, Propositions
and Theories
• Empiricism: We experience or observe “reality”
and events
• Concepts: An abstraction of reality – it is the
words we use to describe the empirical feelings
• Proposition: The relationship between concepts
• Theories: The relationship between propositions
which may be tested through the development of
an hypothesis
 An Example
• Reality: I feel sweaty, I cannot
concentrate, I feel sleepy.
• Concept: I call this feeling “hot”
• Proposition: I suggest this is due to the
high temperature
• Theory: The higher the temperature the
hotter I feel
(This could potentially be tested as an
hypothesis)
 Types of Research
• Exploratory research: To examine the
variables which may be involved in a
situation. Few firm conclusions
• Descriptive research: To describe “what is”
• Diagnostic research: To answer the
question “why” (qualitative research)
• Causal research: To establish cause and
effect relationships
 Causal research
• 1920’s: Apparent association between
smoking and lung cancer.

• 1970’s: Sufficient evidence to propose a

cause and effect between smoking and
lung cancer.

• Therefore ban smoking!

 Causal research
• Establish the order or sequence of events

• Measure the variation between the

presumed cause and presumed effect (a
double blind trial)

• Recognise the presence or absence of

alternative explanations or causal factors.
 Problem Definition
• You are presented with symptoms not
problems!
• Assume there is politics present in the
situation!
• Differentiate between total breaks and
partial breaks
• Never assume the problem can be solved
by research
 What are the variables in the
research?
• Discreet: Limited by a set number of
values. Gender / Religion. Generally fixed
or constant over time.

• Continuous: No limit on number of values.

No definition on number of categories or
points of change. Continuous movement
between categories.
Questions to ask in formulating the
problem
• Metrics relative to competition
• Is the problem researchable?
• Is the problem worth researching (or at
what cost is it worth researching)?
• Am I being used in a wider political game
re decision making?
• To what degree is the outcome of the
research a foregone conclusion, i.e. it is
confirmatory research
 The Research Proposal
• Purpose of the Research
• Research Objectives / What outcomes are likely
to be.
• Research design: This might include broad
methodologies, research instruments, and
indicative areas of questioning
• Sample / Experimental Design
• Data Gathering / Data Processing
• Report Presentation
• Budget (Price!) and Time Schedule.