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Market research is categorized into two distinct models, which are the bottom-up approach/ inductive model and the top-down approach/ the deductive model. The main difference between the two models is that deductive research, which is knowledge-driven, operates from a broader generalization to a narrow observation. On the other hand, the inductive research that is feature detective operates from narrow observations to wider generalizations.
Deductive/ inductive controversy
The deductive approach draws a clear-cut relationship between research and theory. The researcher formulates a hypothesis based on common knowledge about a specific domain, and of theoretical concerns about that domain. Such hypotheses are subsequently subjected to scientific or empirical examinations. The deductive approach is said to be systematic. For example, the process starts from an existing theory to hypothesis formulation, to observing, and finally to generalization (confirmation or rejection of the theory).
In the inductive approach, the theory represents the outcome of the research. The induction process entails converting observations into generalized inferences. In other words, the inductive approach is the reverse of the deductive approach because it operates from observation to theory. For example, Sackmann (1992) used the inductive theory to examine the creation and existence of organizational subcultures. She argued that this approach allowed the development of empirical knowledge, which in turn generated significant information into the complexity of culture.
This was through the understanding of various kinds of cultural knowledge shared by the organization members (Sackmann, 1992, p.143). She conducted open interviews among the respondents in three distinct research sites of medium-sized US corporations and compared the information to justify the existing theories. According to Sackmann, a new hypothesis emerged, which argued that cultural groupings might result based on functional differentiation. Subsequently, the interviewing members tested the hypothesis and discovered that operating subcultures circled the popularly known descriptions of events and things. Sackmann concluded that the findings or discoveries from her deductive approach might apply as a hypothesis for cultural studies.
Examples of Deductive/ inductive controversy
Powell (1995) carried out a study to confirm the economic value of total quality management to the company. This was to challenge the existing scientific research, which stated that total quality management is valuable. He argued that quality associations organized most of the studies or consulting firms with many interests in their products. Also, a great number of them did not follow the accepted form of methodological rigor. He later used 15 hypotheses to confirm whether the value of TQM was valuable. Some of these hypotheses were:
- firms offset non-TQM firms;
- term TQM offsets short term TQM firms;
- TQM offsets service TQM firms.
He used a measurement scale that considered the organizational structure and climate of firms that affected their performance. He also administered questionnaires randomly to the CEOs of all the firms in North-Eastern USA, regardless of whether or not they used TQM services. He interviewed the quality executives and CEOs of thirty different firms excluded from the postal questionnaire survey. Of the thirty, approximately twenty-three possessed the TQM services. His findings supported the underlying assumption that TQM gives economic value to the company, long-term TQM users are more comfortable with the program as compared to short-term users, and finally, service firms were extremely satisfied with the TQM program, unlike manufactures. He argued that long-term TQM adopters were more successful because they had mastered the TQM techniques. He also suggested that TQM could generate economic value to all companies but failed in some firms because success does not only rely on the application of TQM techniques and tools but the intangible factors.
It can be concluded that the two research models are inseparable. This is because of theory results in observations, which necessitate the identification of new patterns, resulting in the formulation of new theories.
Powell, T. C. (2004)Social research methods. Third Edition, Oxford: Oxford University Press.
Sackmann, C. Lewis, P., and Thorn-Hill, A. (2000). Research methods for business students. Harlow Essex, UK: Financial Times Prentice Hall, Pearson Education Limited.