In order to effectively apply the null hypothesis concept in addressing management dilemma, five steps are identified:
(i) Stating the null hypothesis: This is stating the null hypothesis that is being tested, such as the cholesterol levels of Fortune 500 CEOs is 205. High cholesterol levels among CEOs may be a concern reflected in reduced productivity rates of CEOs as they may visit hospitals frequently for treating. The researcher must the null hypothesis so that it clearly and perfectly describes a particular situation.
(ii) Selecting a level of significance: This is the probability of rejecting the null hypothesis when it is true. Some times it is also called the level of risk, because rejecting a null hypothesis when it is true constitutes a risk.
(iii) Selecting the test stastic: This is a value which is determined from sample information. It is used to determine whether to reject the null hypothesis.
(iv) Formulating the decision rule: The decision rule is used to state the conditions when the null hypothesis is rejected.
(v) Making a decision: This is the final step in hypothesis testing. The purpose is to determine whether or not to reject the null hypothesis. The researcher or scholar-practitioner bears a responsibility--that should never be taken lightly--whether or not to accept the hypothesis
Question: Based on the above five steps, how would you ensure that your Hypothesis testing yields credible results?