Final answer:
The false statement about structured observation is that it increases potential observer bias; it is designed to decrease such bias while it increases reliability, and is used when hypotheses are known in both descriptive and causal research.
Step-by-step explanation:
The statement about structured observation that is NOT true is that it "increases potential observer bias." In fact, structured observation aims to decrease observer bias by using standardized methods to collect data.
Structured observation does enhance the reliability of observations because it involves consistent and systematic ways of looking at and recording behavior.
Moreover, while it does increase reliability, there is often a trade-off leading to a potential loss of validity due to over-structuring or failing to capture the richness of the observed phenomena. Structured observation is indeed utilized when hypotheses are known and can be employed for both descriptive and causal research.