Dr.

Saqib Rehman Lecture 4 Business Research

Reference Book: Uma Sekaran
The Research Process (Step 4/ Step 5)

Theoretical Framework
Theoretical Framework
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 in developing the
theoretical framework.
The theoretical framework elaborates the relationships among the variables, explains the theory
underlying these relations, and describes the nature and direction of the relationships. Just as the
literature review sets the stage for a good theoretical framework, this in turn provides the logical
base for developing testable hypotheses.
Components of Theoretical Framework
A good theoretical framework identifies and labels the important variables in the situation that
are relevant to the problem defined. It logically describes the inter connections among these
variables. The relationships among the independent variables, the dependent variable(s), and if
applicable, the moderating and intervening variables are elaborated. Should there be any
moderating variable(s), it is important to explain how and what specific relationships they
would moderate. An explanation of why they operate as moderators should also be offered. If
there are any intervening variables, a discussion on how or why they are treated as intervening
variables would be necessary. Any interrelationships among the independent variables
themselves, or among the dependent variables themselves (in case there are two or more
Dr. Saqib Rehman Lecture 4 Business Research
Reference Book: Uma Sekaran
dependent variables), if any, should also be clearly spelled out and adequately explained.

There are five basic features that should be incorporated in any theoretical framework.
1. The variables considered relevant to the study should be clearly identified and labeled in the
discussions.
2. The discussions should state how two or more variables are related to one another. This
should be done for the important relationships that are theorized to exist among the variables.
3. If the nature and direction of the relationships can be theorized on the basis of the findings of
previous research, then there should be an indication in the discussions as to whether the
relationships would be positive or negative.
4. There should be a clear explanation of why we would expect these relationships to exist. The
arguments could be drawn from the previous research findings.
5. A schematic diagram of the theoretical framework should be given so that the reader can see
and easily comprehend the theorized relationships.

Define Variables and discuss types of variables in detail.

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.

Types of Variables
1. The dependent variable (also known as the criterion variable).
2. The independent variable (also known as the predictor variable).
3. The moderating variable.
4. The intervening variable.

Dependent Variable
The dependent variable is the variable of primary interest to the researcher. The researcher‘s
goal is to understand and describe the dependent variable, or to explain its variability, or predict
it. In other words, it is the main variable that lends itself for investigation as a viable factor.
Through the analysis of the dependent variable (i.e., finding what variables influence it), it is
possible to find answers or solutions to the problem. For this purpose, the researcher will be
interested in quantifying and measuring the dependent variable, as well as the other variables
that influence this variable.

Independent Variable
An independent variable is one that influences the dependent variable in either a positive or
negative way. That is, 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 also. In other words, the variance in the dependent variable is
accounted for by the independent variable. To establish causal relationships, the independent
variable is manipulated.

Moderating Variable
A moderating variable is one that has a strong contingent effect on the independent variable-
dependent variable relationship. That is, the presence of a third variable (the moderating
variable) modifies the original relationship between the independent and the dependent variable.
For example, a strong relationship has been observed between the quality of library facilities
(X) and the performance of the students (Y). Although this relationship is supposed to be true
Dr. Saqib Rehman Lecture 4 Business Research
Reference Book: Uma Sekaran
generally, it is nevertheless contingent on the interest and inclination of the students. It means
that only those students who have the interest and inclination to use the library will show
improved performance in their studies. In this relationship interest and inclination is moderating
variable i.e. which moderates the strength of the association between X and Y variables.

Intervening Variable
An intervening variable is one that surfaces between the time the independent variables start
operating to influence the dependent variable and the time their impact is felt on it. There is thus
a temporal quality or time dimension to the intervening variable. The intervening variable
surfaces as a function of the independent variable(s) operating in any situation, and helps to
conceptualize and explain the influence of the independent variable(s) on the dependent
variable.
A theory of suicide states that married people are less likely to commit suicide than single
people. The assumption is that married people have greater social integration (e.g. feelings of
belonging to a group or family). Hence a major cause of one type of suicide was that people
lacked a sense of belonging to group (family). Thus this theory can be restated as a three-
variable relationship: marital status (independent variable) causes the degree of social
integration (intervening variable), which affects suicide (dependent variable). Specifying the
chain of causality makes the linkages in theory clearer and helps a researcher test complex
relationships.

Continuous Variable
Variables have different properties and to these properties we assign numerical values. If the
values of a variable can be divided into fractions then we call it a continuous variable. Such a
variable can take infinite number of values. Income, temperature, age, or a test score are
examples of continuous variables. These variables may take on values within a given range or, in some
cases, an infinite set.

Discontinuous Variable
Any variable that has a limited number of distinct values and which cannot be divided into
fractions, is a discontinuous variable. Such a variable is also called as categorical variable or
classificatory variable, or discrete variable. Some variables have only two values, reflecting the
presence or absence of a property: employed-unemployed or male-female have two values.
These variables are referred to as dichotomous. There are others that can take added categories
such as the demographic variables of race, religion. All such variables that produce data that fit
into categories are said to be discrete/categorical/classificatory, since only certain values are
possible. An automotive variable, for example, where “Chevrolet” is assigned a 5 and “Honda”
is assigned a 6, provides no option for a 5.5 (i.e. the values cannot be divided into fractions).

What are Hypotheses? Discuss its types and characteristics.

Hypothesis
Once we have identified the important variables in a situation and established the relationships
among them through logical reasoning in the theoretical frame- work, we are in a position to test
whether the relationships that have been theorized do in fact hold true. By testing these
relationships scientifically through appropriate statistical analyses, or through negative case
analysis in qualitative research (described later in the chapter) we are able to obtain reliable
information on what kinds of relationships exist among the variables operating in the problem
situation. The results of these tests offer us some clues as to what could be changed in the
situation to solve the problem. Formulating such testable statements is called hypotheses
Dr. Saqib Rehman Lecture 4 Business Research
Reference Book: Uma Sekaran
development.
A hypothesis can be defined as a logically conjectured relationship between two or more
variables expressed in the form of a testable statement. Relationships are conjectured on the
basis of the network of associations established in the theoretical framework formulated for the
research study. By testing the hypotheses and confirming the conjectured relationships, it is
expected that solutions can be found to correct the problem encountered.

Characteristics of Testable Hypothesis

I. Hypothesis must be conceptually clear.
II. Hypothesis should have empirical referents.
III. Hypothesis must be specific.
IV. Hypothesis should be related to available techniques of research.
V. Hypothesis should be related to a body of theory.

Directional and Non-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 hypotheses are
directional because the direction of the relationship between the variables (positive/negative) is
indicated, as in Example: Greater the stress experienced in the job, the lower the job satisfaction
of employees.

Null and Alternate Hypotheses

 The null hypothesis proposes that there is no relationship or difference between variables. It
serves as a default or starting point for testing and is generally formulated to be rejected or
disproven. Example: There is no difference in performance between employees trained in-house and
those trained externally.

 The alternative hypothesis is the opposite of the null hypothesis, proposing that there is a
significant effect or relationship between variables. It is accepted if the null hypothesis is
rejected. Example: Employees trained in-house perform better than those trained externally.

Types of Hypotheses
1. Descriptive Hypothesis
Descriptive hypothesis contains only one variable thereby it is also called a univariate
hypothesis. Descriptive hypotheses typically state the existence, size, form, or distribution of
some variable. The first hypothesis contains only one variable. It only shows the distribution of
the level of commitment among the officers of the organization which is higher than average.
Such a hypothesis is an example of a Descriptive Hypothesis.
Researchers usually use research questions rather than descriptive hypothesis. For example a
question can be: What is the level of commitment of the officers in your organization?
2. Relational Hypothesis
These are the propositions that describe a relationship between two variables. The relationship
could be non-directional or directional, positive or negative, causal or simply correlational.
While stating the relationship between the two variables, if the terms of positive, negative, more
than, or less than are used then such hypotheses are directional because the direction of the
relationship between the variables (positive/negative).
Dr. Saqib Rehman Lecture 4 Business Research
Reference Book: Uma Sekaran
A. Correlational hypotheses
State merely that the variables occur together in some specified manner without implying that
one causes the other. Such weak claims are often made when we believe that there are more
basic causal forces that affect both variables. For example: Level of job commitment of the
officers is positively associated with their level of efficiency. Here we do not make any claim
that one variable causes the other to change. That will be possible only if we have control on all
other factors that could influence our dependent variable.
B. Explanatory (causal) hypotheses
Imply the existence of, or a change in, one variable causes or leads to a change in the other
variable. This brings in the notions of independent and the dependent variables. Cause means to
“help make happen.” So the independent variable may not be the sole reason for the existence
of, or change in the dependent variable. The researcher may have to identify the other possible
causes, and control their effect in case the causal effect of independent variable has to be
determined on the dependent variable. This may be possible in an experimental design of research.