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company is more likely to be affected by internal organisational factors such as
management’s perception of decision analysis and the corporate culture than the
techniques or approach used by other companies.
In this case, the explanatory variable, the organisations’ use of decision analysis
techniques and concepts, has multiple levels and hence, the problem should be
regarded as a “several sample” problem.
This process highlights three tests as being applicable in this case: Kendall’s test for
correlation, Spearman’s test for correlation and the Kruskal Wallis test. First, consider the two correlation tests. Since the two tests rarely produce different results
(Leach, 1979 p192) and the researcher is familiar with the Spearman correlation test,
it will be used here. The procedure for carrying out the Spearman test for correlation
175 is outlined in Appendix 3. The null and alternative hypotheses that will be tested
using the Spearman test for correlation for each performance measure are:
H10: There is no or a negative relationship between the ranking of sampled companies
with respect to the performance measure under investigation and the ranking of
the sampled companies with respect to decision analysis sophistication in
H11: There is a positive relationship between the ranking of sampled companies with
respect to the performance measure under investigation and the ranking of the
sampled companies with respect to decision analysis sophistication in investment
The Kruskal Wallis test is a direct generalisation of the Wilcoxon Rank Sum test to
three or more independent samples. The test attempts to decide whether the samples
of scores come from the same population or from several populations that differ in
location. It assumes that the data are independent and ordinal. The procedure for
carrying out the test is outlined in Appendix 4. Since PR and TBV are two of the
criteria which are most indicative of the results of recent, past investment decisionmaking (section 7.4), Kruskal Wallis tests will only be carried out on them (there is
insufficient data for a Kruskal Wallis test for PSR). The null and alternative hypotheses to be tested will be:
H20: The TBV (or PR) of each company is independent of the decision analysis
sophistication rank achieved by each company
H21: The TBV (or PR) of each company come from populations that differ in location
according to the rank achieved by each company in the assessment of decision
If a significant result is achieved with this test for either or both of the criteria the
locus of the difference will be identified by carrying out multiple comparisons using
the Wilcoxon Rank Sum test. This test is also outlined in Appendix 4.
The following section investigates these hypotheses by calculating the appropriate test
176 7.6 RESULTS
In this section, the results of the statistical tests are presented and the null hypotheses
are accepted or rejected as appropriate.
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This document was uploaded on 03/30/2014.
- Summer '14
- The Land