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32 SCIENTIFIC INVESTIGATION

hypotheses are generated should also be collected. These data then form the
basis for further data analysis.

Data Analysis
In the data analysis step, the data gathered are statistically analyzed to see if the
hypotheses that were generated have been supported. For instance, to see if
stock levels influence customer satisfaction, one might want to do a correlational
analysis and determine the relationship between the two factors. Similarly, other
hypotheses could be tested through appropriate statistical analysis. Analyses of
both quantitative and qualitative data can be done to determine if certain con-
jectures are substantiated. Qualitative data refer to information gathered in a nar-
rative form through interviews and observations. For example, to test the theory
that budgetary constraints adversely impact on managers’ responses to their
work, several interviews might be conducted with managers after budget restric-
tions are imposed. The responses from the managers who verbalize their reac-
tions in different ways might be then organized to see the different categories
under which they fall and the extent to which the same kinds of responses are
articulated by the managers.

Deduction
Deduction is the process of arriving at conclusions by interpreting the meaning
of the results of the data analysis. For instance, if it was found from the data
analysis that increasing the stocks was positively correlated to (increased) cus-
tomer satisfaction (say, .5), then one can deduce that if customer satisfaction is
to be increased, the shelves have to be better stocked. Another inference from
this data analysis is that stocking of shelves accounts for (or explains) 25% of the
2
variance in customer satisfaction (.5 ). Based on these deductions, the researcher
would make recommendations on how the “customer dissatisfaction” problem
could be solved.
In summary, there are seven steps involved in identifying and resolving a
problematic issue. To make sure that the seven steps of the hypothetico-deduc-
tive method are properly understood, let us briefly review two examples in an
organizational setting and the course of action taken in the seven steps.

Two Examples of the Application of the Hypothetico-Deductive Method
in Organizations

Example 2.2 THE CIO DILEMMA

Observation
The Chief Information Officer (CIO) of a firm observes that the newly installed
Management Information System (MIS) is not being used by middle managers as