In every Business or industry, a group of experts is dedicated to doing business research. This business research helps the managers of the company to forecast sales, recognize trends, earn more profits, etc. On the other hand, it also helps them to identify if any corporate practices or metrics are not up to their standards.
Hypothesis testing is a way to find out whether a particular theory is correct. Often managers order the team of business researchers to carryout hypothesis testing after which important decisions of the company are made. Although hypothesis testing does not remove the uncertainties of the managers but it helps them in knowing the probability of decision errors which later can be measured or controlled.
The procedure of Hypothesis testing involves the formulation of Null hypothesis (represented by the symbol Ho) and Alternative hypothesis (represented by the symbol HA). The gathered data would either accept Null hypothesis or reject it. If the sample data does not show any contradictory evidence against the Null hypothesis then it is accepted and if it does show contradictory evidence or significant deviations then it is rejected and suitable Alternative hypothesis is accepted. (Hogg & Elliot. 2005. p. 34)
Usually in companies hypothesis testing is done to see if a situation has changed or. For example, XYZ Company wanted to find out if increasing the lunch break minutes for the employees this year during office hours would affect their productivity level. The Null and Alternative hypothesis derived from this statement would be as follows:
Ho Increasing the lunch break minutes for the employees would not affect their productivity level
HA Increasing the lunch break minutes for the employees would affect their productivity level
Now the manager W will test the hypothesis by collecting a sample from the employees and after evaluating the sample he will come to the conclusion whether the Null hypothesis is correct or incorrect. (Pellissier. 2007. p. 107)
References
Hogg, Robert V., and Elliot A. Tanis. (2005). Probability and Statistical Inference, 7th ed. Upper Saddle River, NJ: Prentice Hall. P. 34
Pellissier, R. (2007). Business Research Made Easy. Cape Town, South Africa: Juta & Co. P. 107
