Examine practical applications of hypothesis testing. Make sure to read the chapter on hypothesis testing before posting. Without understanding the methodology and how to write the null hypothesis and the alternative hypothesis, you will not be able to complete this discussion.
Successful management is about making decisions to bring about desired change. A manager who has a specific objective will execute an action, hoping that the result will be the achievement of that objective. However, due to the multitude of factors that are in play in any real-life situation, it is difficult to tell if the desired outcome has been achieved or if the new numbers are only due to randomness.
For example, a sales manager implements a bonus system and sees the sales figures go up by 3% in the next month. She claims success, but was this really due to the bonus system or could the increase be the result of random fluctuations, something that would have happened anyway? Can the manager confidently claim that there has been a significant change, something that could not be the result of random fluctuations?
Another example may be where HR is worried there may be a difference between the salaries of men versus women that may need to be corrected. Is the difference between average salaries of the two genders significant, or could it be due to coincidence? Can someone claim there is discrimination at work?
Sample Solution