RESEARCH METHODS FOR BUSINESS:
A SKILL BUILDING APPROACH
UME-SEKARAN AND ROGER BOUGIE (5th Edition)
CHAPTER 4:
THE RESEARCH PROCESS: THEORETICAL
FRAMEWORK AND
HYPOTHESIS DEVELOPMENT
Ali Raza Sultani (Doctoral Candidate - ABD)
Topics Discussed
2
1. The need for a theoretical framework
2. Variables
3. The theoretical framework and its five basic features
4. Hypothesis development
Ali Raza Sultani (Doctoral Candidate - ABD)
Chapter Objectives
3
After completing Chapter 4 you should be able to:
1. Identify and label variables associated with any given
situation.
2. Trace and establish the links among the variables and
evolve a theoretical framework.
3. Develop a set of hypotheses to be tested and state them in
the null and the alternate.
4. Apply what has been learned to a research project.
Ali Raza Sultani (Doctoral Candidate - ABD)
4
Ali Raza Sultani (Doctoral Candidate - ABD)
The Need for a Theoretical Framework
5
A theoretical framework is the foundation of
hypotheticodeductive research as it is the basis of the
hypotheses that you will develop.
It represents your beliefs on how certain phenomena (or
variables or concepts) are related to each other (a model)
and an explanation of why you believe that these variables
are associated with each other (a theory).
The theoretical framework offers the conceptual foundation
to proceed with the research, and involves nothing more
than identifying the network of relationships among the
variables considered important to the study of any given
problem situation.
Ali Raza Sultani (Doctoral Candidate - ABD)
The Need for a Theoretical Framework
6
The process of building a theoretical framework includes:
1. Introducing definitions of the concepts or variables in your model.
2. Developing a conceptual model that provides a descriptive
representation of your theory.
3. Coming up with a theory that provides an explanation for
relationships between the variables in your model.
From the theoretical framework, then, testable hypotheses
can be developed to examine whether your theory is valid
or not. The hypothesized relationships can thereafter be
tested through appropriate statistical analyses. Hence, the
entire research rests on the basis of the theoretical
framework.
Ali Raza Sultani (Doctoral Candidate - ABD)
Variables
7
A variable is anything that can take on differing or varying
values.
The values can differ at various times for the same object or
person, or at the same time for different objects or persons.
Examples of variables are production units, absenteeism,
and motivation.
Absenteeism: Today, three members in the sales department may be
absent; tomorrow, six members may not show up for work; the day
after, there may be no one absent. The value can thus theoretically
range from “zero” to “all” being absent, on the absenteeism variable.
Ali Raza Sultani (Doctoral Candidate - ABD)
Variables
8
Four main types of variables are:
1. The dependent variable (the criterion variable).
A variable whose value depends on other variables (which is being
effected by other variables). It is the main variable that lends itself for
investigation as a viable factor.
For example: (i) an applied researcher wants to increase the
performance of bank employees in a particular branch. Here,
performance of bank employees is dependent variable.
(ii) A marketing manager believes that limiting the availability of a
product increases product desirability. Here, product desirability is
dependent variable.
A basic researcher is interested in investigating the debt-to-equity
ratio of manufacturing companies in southern Germany. Here, the
dependent variable is the ratio of debt to equity.
Ali Raza Sultani (Doctoral Candidate - ABD)
Variables
9
2. The independent variable (the predictor variable).
An independent variable is one that influences the dependent variable
in either a positive or negative way.
When the independent variable is present, the dependent variable is
also present, and with each unit of increase in the independent variable,
there is an increase or decrease in the dependent variable.
For example, a manager believes that good supervision and training
will increase the efficiency of the workers. Here, good supervision and
training are independent variables, and efficiency of the workers is
dependent variable.
IDV DV
Good Supervision Efficiency of the
Training Workers
Ali Raza Sultani (Doctoral Candidate - ABD)
Variables
10
3. The moderating variable.
The moderating variable is one that has a strong contingent effect on
the independent variable–dependent variable relationship.
The presence of a third variable (the moderating variable) modifies
the original relationship between the independent and the dependent
variables.
For example, a manager finds that the intensity of e-Business
adoption is positively associated with sales performance. What's more,
when market uncertainty is high, this positive effect is strengthened.
MODV
IDV Market Uncertainty DV
E-Business Sales Performance
Ali Raza Sultani (Doctoral Candidate - ABD)
Variables
11
4. The mediating variable (the intervening variable)
A mediating variable is a variable that links the independent and the
dependent variables, and whose existence explains the relationship
between the other two variables.
For example, failure to follow accounting principles causes immense
confusion, which in turn leads towards wrong decisions. Those with vast
experience in bookkeeping, however, are able to avert the problems by
taking timely corrective action.
IDV MEDV DV
Accounting Principles Confusion Wrong Decisions
Experience
MODV
Ali Raza Sultani (Doctoral Candidate - ABD)
Theoretical Framework
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The theoretical framework is the foundation on which the
entire research project is based.
It is a logically developed, described, and elaborated
network of associations among the variables deemed
relevant to the problem situation and identified through
such processes as interviews, observations, and literature
review.
Experience and intuition also guide the development of the
theoretical framework.
Note that a good theoretical framework is not necessarily a
complex framework.
Ali Raza Sultani (Doctoral Candidate - ABD)
Theoretical Framework
13
There are three basic features that should be incorporated
in any theoretical framework:
1. The variables considered relevant to the study should be clearly
defined.
2. A conceptual model that describes the relationships between the
variables in the model
should be given.
3. There should be a clear explanation of why we expect these
relationships to exist.
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Theoretical Framework - Example
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Hypothesis Development
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A hypothesis can be defined as a tentative, yet testable,
statement, which predicts what you expect to find in your
empirical data.
Hypotheses can be defined as logically conjectured
relationships between two or more variables expressed in
the form of testable statements.
For example, If the pilots are given adequate training to
handle mid-air crowded situations, air safety violations will
be reduced.
Ali Raza Sultani (Doctoral Candidate - ABD)
Statement of Hypotheses: Formats
16
If–then statements
If employees are more healthy, then they will take sick leave less
frequently.
Directional and Non-directional Hypotheses
Directional Hypotheses - If, in stating the relationship between two
variables or comparing two groups, terms such as positive, negative,
more than, less than, and the like are used, then these are directional
hypotheses. For example, the greater the stress experienced in the
job, the lower the job satisfaction of employees.
Non-directional Hypotheses - Those hypotheses that do postulate a
relationship or difference, but offer no indication of the direction of
these relationships or differences. For example, there is a
relationship between age and job satisfaction.
Ali Raza Sultani (Doctoral Candidate - ABD)
Statement of Hypotheses: Formats
17
Null and Alternate Hypotheses
Null Hypotheses - A null hypothesis (Ho) is a hypothesis set up to be
rejected in order to support an alternate hypothesis (HA). For
example, (i) advertising does not affect sales, and (ii) There is no
relationship between stress experienced on the job and the job
satisfaction of employees.
Alternative Hypotheses - Which is the opposite of the null, is a
statement expressing a relationship between two variables or
indicating differences between groups. For example, (i) advertising
affects sales, and (ii) The greater the stress experienced in the job,
the lower the job satisfaction of employees.
Ali Raza Sultani (Doctoral Candidate - ABD)
Discussion Questions
18
1. “Because literature review is a time-consuming exercise, a good, in-
depth interview should suffice to develop a theoretical framework.”
Discuss this statement.
2. “Good models are complex. What's more, a good model should
include both moderating and mediating variables.” Discuss this
statement.
3. “Academic researchers usually develop more complex and elaborate
models than applied researchers.” Discuss this statement.
4. “In an applied research context you do not need to explain the
relationships between the variables in your conceptual model.” Discuss
this statement.
5. There is an advantage in stating the hypothesis both in the null and
in the alternate; it adds clarity to our thinking of what we are testing.
Explain.
Ali Raza Sultani (Doctoral Candidate - ABD)
Discussion Questions
19
6. It is advantageous to develop a directional hypothesis whenever we
are sure of the predicted direction. How will you justify this
statement?
7. Develop a conceptual model for the following case.
Once given, perks are extraordinarily hard to take away without
sapping employee morale. The adverse effects of these cuts far
outweigh the anticipated savings in dollars. Research has shown that
when the reason behind the cuts is explained to employees, morale
does not drop.
Ali Raza Sultani (Doctoral Candidate - ABD)
Practice Question 1
20
A production manager is concerned about the low output levels
of his employees. The articles that he has read on job
performance frequently mention four variables as being
important to job performance: skill required for the job, rewards,
motivation, and satisfaction. In several of the articles it was also
indicated that only if the rewards were valent (attractive) to the
recipients did motivation, satisfaction, and job performance
increase, not otherwise. Given this situation:
1. Define the problem.
2. Evolve a theoretical framework.
3. Develop at least six hypotheses.
Ali Raza Sultani (Doctoral Candidate - ABD)
Practice Question 2
21
Retention of minority women at the workplace is becoming more
and more difficult. Not finding an influential mentor in the
system who is willing to help them, lack of an informal network
with influential colleagues, lack of role models, and the dearth of
high-visibility projects result in dissatisfaction experienced at
work and the minority women ultimately decide to leave the
organization. Of course, not all minority women quit the system.
Only those who have the wherewithal (for example, resources
and self-confidence) to start their own business leave the
organization. Given this situation:
1. Define the problem.
2. Evolve a theoretical framework.
3. Develop at least six hypotheses.
Ali Raza Sultani (Doctoral Candidate - ABD)
