Top management of a large multinational corporation wants to create a culture of
ID: 3361628 • Letter: T
Question
Top management of a large multinational corporation wants to create a culture of innovativeness and change. A consultant hired to assess the company's organizational culture finds that only 15% of employees are open to new ideas and approaches toward their work. One of his recommendations for the company is to conduct seminars for employees in order to disseminate and reinforce the new corporate philosophy. This is done for a six month trial period after which its value in changing employee attitudes will be assessed. Suppose a hypothesis test is made to see whether the percentage of employees that are open to new ideas has increased or not. Moreover, an alpha level of 5% has been chosen. Type I error in this context would be
Question 5 options:
failing to detect an increase in the percentage of employees open to new ideas, when in fact it has taken place. This conclusion has a probability of 5%.
failing to detect an increase in the percentage of employees open to new ideas, when in fact it has taken place. This conclusion has a probability of 95%.
concluding that the percentage of employees open to new ideas has increased, when in fact it has not. This conclusion has a probability of 5%.
concluding that the percentage of employees open to new ideas has increased, when in fact it has not. This conclusion has a probability of 95%.
failing to detect an increase in the percentage of employees open to new ideas, when in fact it has taken place. This conclusion has a probability of 5%.
failing to detect an increase in the percentage of employees open to new ideas, when in fact it has taken place. This conclusion has a probability of 95%.
concluding that the percentage of employees open to new ideas has increased, when in fact it has not. This conclusion has a probability of 5%.
concluding that the percentage of employees open to new ideas has increased, when in fact it has not. This conclusion has a probability of 95%.
Explanation / Answer
Here the hypothesis test is made to see whether the percentage of employees that are open to new ideas has increased or not. thus the null hypthesis would be that it has remained the same i.e not increased. Type 1 error would be concluding that it has increased given that the null hypothesis test is true.thus, concluding that the percentage of employees open to new ideas has increased, when in fact it has not. This conclusion has a probability of 95%. option D