Inductive Approach (Inductive Reasoning)

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[1].  Inductive research “involves the search for pattern from observation and the development of explanations – theories – for those patterns through series of hypotheses”[2]. 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.[3] 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[4]. 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”[5]

Inductive approach (inductive reasoning)

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

Statistical inference

Narrative description

Constant comparison

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.

  Qualitative Quantitative
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[6] and discuss the impacts of your choice of inductive approach on selection of primary data collection methods and research process.

Attribute Deductive Inductive
Direction “Top-Down” “Bottom-Up”
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
Spatial scales Single

(one landscape, one resolution)


(multiple landscape, one resolution)

Temporal scales Multiple




Cognitive scales Single

(homogenous preferences)


(heterogeneous preferences)

Aggregation scales Single

(core aggregation scale)

Single or multiple

(one or more aggregation scales)

Predictive vs. Stochastic accuracy High – Low

(one likely future)


(many likely futures)

Data intensity Low

(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 philosophyresearch designmethods of data collectiondata analysis and sampling are explained in this e-book in simple words.

John Dudovskiy

Inductive approach (inductive reasoning)

[1] Goddard, W. & Melville, S. (2004) “Research Methodology: An Introduction” 2nd edition, Blackwell Publishing

[2] Bernard, H.R. (2011) “Research Methods in Anthropology” 5th edition, AltaMira Press, p.7

[3] Saunders, M., Lewis, P. & Thornhill, A. (2012) “Research Methods for Business Students” 6th edition, Pearson Education Limited

[4] Neuman, W.L. (2003) “Social Research Methods: Qualitative and Quantitative Approaches” Allyn and Bacon

[5] Lodico, M.G., Spaulding, D.T &Voegtle, K.H. (2010) “Methods in Educational Research: From Theory to Practice” John Wiley & Sons, p.10

[6] Source: Alexandiris, K.T. (2006) “Exploring Complex Dynamics in Multi Agent-Based Intelligent Systems” Pro Quest