The main difference between inductive and deductive approaches to research is that whilst a deductive approach is aimed and testing theory, an inductive approach is concerned with the generation of new theory emerging from the data.
A deductive approach usually begins with a hypothesis, whilst an inductive approach will usually use research questions to narrow the scope of the study.
For deductive approaches the emphasis is generally on causality, whilst for inductive approaches the aim is usually focused on exploring new phenomena or looking at previously researched phenomena from a different perspective.
Inductive approaches are generally associated with qualitative research, whilst deductive approaches are more commonly associated with quantitative research. However, there are no set rules and some qualitative studies may have a deductive orientation.
One specific inductive approach that is frequently referred to in research literature is grounded theory, pioneered by Glaser and Strauss.
This approach necessitates the researcher beginning with a completely open mind without any preconceived ideas of what will be found. The aim is to generate a new theory based on the data.
Once the data analysis has been completed the researcher must examine existing theories in order to position their new theory within the discipline.
Grounded theory is not an approach to be used lightly. It requires extensive and repeated sifting through the data and analysing and re-analysing multiple times in order to identify new theory. It is an approach best suited to research projects where there the phenomena to be investigated has not been previously explored.
The most important point to bear in mind when considering whether to use an inductive or deductive approach is firstly the purpose of your research; and secondly the methods that are best suited to either test a hypothesis, explore a new or emerging area within the discipline, or to answer specific research questions.
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Inductive approach, also known in inductive reasoning, starts with the observations and theories are proposed towards the end of the research process as a result of observations. Inductive research “involves the search for pattern from observation and the development of explanations – theories – for those patterns through series of hypotheses”. No theories or hypotheses would apply in inductive studies at the beginning of the research and the researcher is free in terms of altering the direction for the study after the research process had commenced.
It is important to stress that inductive approach does not imply disregarding theories when formulating research questions and objectives. This approach aims to generate meanings from the data set collected in order to identify patterns and relationships to build a theory; however, inductive approach does not prevent the researcher from using existing theory to formulate the research question to be explored. Inductive reasoning is based on learning from experience. Patterns, resemblances and regularities in experience (premises) are observed in order to reach conclusions (or to generate theory).
Application of Inductive Approach (Inductive Reasoning) in Business Research
Inductive reasoning begins with detailed observations of the world, which moves towards more abstract generalisations and ideas. When following an inductive approach, beginning with a topic, a researcher tends to develop empirical generalisations and identify preliminary relationships as he progresses through his research. No hypotheses can be found at the initial stages of the research and the researcher is not sure about the type and nature of the research findings until the study is completed.
As it is illustrated in figure below, “inductive reasoning is often referred to as a “bottom-up” approach to knowing, in which the researcher uses observations to build an abstraction or to describe a picture of the phenomenon that is being studied”
Here is an example:
My nephew borrowed $100 last June but he did not pay back until September as he had promised (PREMISE). Then he assured me that he will pay back until Christmas but he didn’t (PREMISE). He also failed in to keep his promise to pay back in March (PREMISE). I reckon I have to face the facts. My nephew is never going to pay me back (CONCLUSION).
Generally, the application of inductive approach is associated with qualitative methods of data collection and data analysis, whereas deductive approach is perceived to be related to quantitative methods. The following table illustrates such a classification from a broad perspective:
|Concepts associated with quantitative methods||Concepts associated with qualitative methods|
|Type of reasoning||Deduction|
|Type of question||Pre-specified|
|Type of analysis||Numerical estimation|
However, the statement above is not absolute, and in some instances inductive approach can be adopted to conduct a quantitative research as well. The following table illustrates patterns of data analysis according to type of research and research approach.
|Inductive||Grounded theory||Exploratory data analysis|
|Deductive||Qualitative comparative analysis||Structural equation modeling|
When writing a dissertation in business studies it is compulsory to specify the approach of are adopting. It is good to include a table comparing inductive and deductive approaches similar to one below and discuss the impacts of your choice of inductive approach on selection of primary data collection methods and research process.
|Focus||Prediction changes, validating theoretical construct, focus in “mean” behaviour, testing assumptions and hypotheses, constructing most likely future||Understanding dynamics, robustness, emergence, resilience, focus on individual behaviour, constructing alterative futures|
(one landscape, one resolution)
(multiple landscape, one resolution)
(core aggregation scale)
|Single or multiple|
(one or more aggregation scales)
|Predictive vs. Stochastic accuracy||High – Low|
(one likely future)
(many likely futures)
(group or partial attributes)
(individual or group attributes)
My e-book, The Ultimate Guide to Writing a Dissertation in Business Studies: a step by step assistance contains discussions of theory and application of research approaches. The e-book also explains all stages of the research process starting from the selection of the research area to writing personal reflection. Important elements of dissertations such as research philosophy, research design, methods of data collection, data analysis and sampling are explained in this e-book in simple words.
 Goddard, W. & Melville, S. (2004) “Research Methodology: An Introduction” 2nd edition, Blackwell Publishing
 Bernard, H.R. (2011) “Research Methods in Anthropology” 5th edition, AltaMira Press, p.7
 Saunders, M., Lewis, P. & Thornhill, A. (2012) “Research Methods for Business Students” 6th edition, Pearson Education Limited
 Neuman, W.L. (2003) “Social Research Methods: Qualitative and Quantitative Approaches” Allyn and Bacon
 Lodico, M.G., Spaulding, D.T &Voegtle, K.H. (2010) “Methods in Educational Research: From Theory to Practice” John Wiley & Sons, p.10
 Source: Alexandiris, K.T. (2006) “Exploring Complex Dynamics in Multi Agent-Based Intelligent Systems” Pro Quest