Chapter 14.5, Problem 28E

Traditionally, U.S. labor unions have been content to leave the management of companies to managers and corporate executives. In Europe, worker participation in management decision making is an accepted idea that is becoming increasingly popular. To study the effect of worker participation, 100 workers were interviewed in each of two separate German manufacturing plants. One plant had active worker participation in managerial decision making; the other plant did not. Each selected worker was asked whether he or she approved of the managerial decisions made within the plant. The results follow.

1. a Do the data indicate a difference in the proportions of workers in the two plants who generally approve of managerial decisions? Test at the .05 significance level using the χ² test.
2. b Construct a 95% lower confidence bound for the difference in the proportion of workers who approve of managerial decisions in the plants with and without worker participation. Does the resulting confidence bound indicate that a greater proportion of workers approve of managerial decisions in the plant with active worker participation? Why?
3. c Could the conclusion that you reached in part (b) have resulted from the χ² test implemented in part (a)? Why?