1 Business Research Methods Theoretical Framework Hypothesis Development

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Business Research Methods Theoretical Framework & Hypothesis Development 2

Theoretical Framework § After choosing a broad area of research, completing a literature review, and defining problem, one is now ready to develop a theoretical framework. § A theoretical framework represents your beliefs on how certain phenomena (or variables) are related to each other (a model) and an explanation on why you believe that these variables are associated to each other (a theory). § This theory flows logically from the documentation of previous research in the problem area. § In sum, theoretical framework discusses the interrelationships among the variables that are 3 deemed to be integral to the dynamics of the

Theoretical Framework § After theoretical framework, testable hypothesis can be developed and tested through appropriate statistical analysis. § So, a theoretical framework is none other than identifying the network of relationships among the important variables in the study. § Basic steps: – Identify and label the variables correctly – State the relationships among the variables: formulate hypotheses – Explain how or why you expect these 4 relationships

Variable § An image, perception or concept that is capable of measurement- hence capable of taking on different values! – The food is excellent; I don’t like this; I think this is wonderful; service quality is not good; There is no accountability; § A variable is anything that varies or changes in value. § The value can differ at various times for the same object or person, or at the same time for different objects or persons. E. g. absenteeism, motivation, production units, etc. § A concept that can be measured on any one of the 5 four types of measurement scale, which have

Variables § Difference between Concepts & Variables – Concepts are mental images or perceptions; therefore their meaning will be different from person to person – Variables are measureable, of course with varying degrees of accuracy – Measurability is the main difference – A concept cannot be measured and a variable can be subjected to measurement by crude /refined or subjective/objective units of measurement – Concepts are subjective impressions – their understanding may differ from person to person – which, if measured, would cause problems in comparing responses.

Types of Variables § Main types of variables: 1. Dependent variable (criterion, outcome, result or effect variable) 2. Independent variable ( predictor or cause variable) 3. Moderating variable 4. Mediating variable / Intervening variable

Types of Variables • Connecting or linking variables (4) • Cause • Connect or link • Effect • Outcome Variables (2) • Change variables (1) • Variables that effect the relationship (3)

Types of Variables § In-Dependent Variables § The cause supposed to be responsible for bringing about change(s) in a phenomenon or situation. § Dependent Variables § The outcome of the change(s) brought about by introduction of an independent variable § Moderating Variables – Factors may affect changes in the dependent variable; these factors not measured in the study, may increase or decrease the magnitude or strength of the relationship between dependent and independent variables § Mediating Variables – Confounding variables; links the independent and dependent variables. The cause variable will have the assumed effect only in the presence of an intervening variable

Dependent & Independent variable §Dependent variable (DV) – Is of primary interest to the researcher. The goal of the research project is to understand, predict or explain the variability of this variable. – It is the main variable which lends itself for investigation. – A study may have more than one DV (multivariate statistical analysis) §Independent variable (IV) – It is the variable which Influences the DV in either positive or negative way. That is when IV is 10 presented, the DV is also present, & with each

Example § Relationship between smoking(IV) and cancer (DV) § A manager is considered about sales of a new product launched after test marketing (S=DV) § A vice president is concerned that employees are not loyal to the organization and turnover rate is high (Org. commitment=DV) § Now respond § A marketing manager wonders why the recent advertising strategy does not work. What would be the dependent variable? § A researcher wants to increase the performance of organizational members? What would be the dependent variable here? § Relationship between counseling service 11 on

Example § Successful new product development has an influence on the stock market price of the company. The more successful the new product, higher will be the stock market. § So, the success of the new product is IV and stock market price is DV. § § Managerial values govern the power distance between superiors and subordinates. Here power distance is variable of interest thus is DV and managerial values are IV. § Now respond 12

Moderators § Moderator is qualitative (e. g. , gender, race, class) or quantitative (e. g. , level of reward) variable that affects the direction and/or strength of relation between independent and dependent variable. § Presence of this variable modifies the original relationship between DV and IV. 13

Mediating variable –surfaces between the time the independent variables start operating to influence the dependent variable and the time their impact is felt on it. 14