Chapter 4 :

Theoretical Framework and Hypothesis Development

Variables
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.

Type

of variables:

The dependent variable. The independent variable (also known as the predictor variable) The moderating variables. The intervening variables. Variables can be discrete or continuous

Dependent Variable

The dependent variable is the variable of primary interest to the researcher. The researchers goal is to understand and describe the dependent variable, or to explain its variability, or predict it. It is the main variable that lends itself for investigation as a viable factor. Through the analysis of the dependent variable, it is possible to find answers or solutions to the problem. It is possible to have more than one dependent variable in a study. For example there is a tussle between quality and volume of output, low cost production and customer satisfaction, (Multivariate statistical analysis)
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Independent Variable
The 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. (the variance in the dependent variable is accounted for by the independent variable.
Example: Cross-cultural research indicates that managerial values govern the power distance between superiors and subordinates. Here, power distance is the subject of interest and hence the dependent variable. Managerial values that explain the variance in power distance is the independent variable.
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Moderating Variable
The moderating variable is one that has a strong contingent effect on the independent-dependent variable relationship. That is, the presence of a third variable (the moderating variable) modifies the original relationship between the independent and the dependent variables.

Example 1: An applied researcher wants to increase the performance of organizational members in particular bank. Answer: The dependent variable is organizational performance because it is the primary variable of interest to the applied researcher. Independent variables could be Wages, bonuses, Organizational culture, etc Example 2: A marketing manager wonders why the recent advertisement strategy does not work. What would be the dependent variable here? Answer: The dependent variable is advertisement strategy because the marketing manager is interested in knowing why the recent strategy does not work. And IV could be advertising channel, distributer, market segment, etc. Example 3: Research studies indicate that successful new product development has an influence on the stock market price of the company. That is, the more successful the new product turns out to be, the higher will be the stock market price of the firm. Answer: Dependent Variable is the stock market price. And new product success is independent variable.
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The Moderating Variable

Example: It has been found that there is a relationship between the availability of Reference Manuals that manufacturing employees have access to, and the product rejects. That is, when workers follow the procedures laid down in the manual, they are able to manufacture products that are flawless. Although this relationship can be said to hold true generally for all workers, it is nevertheless contingent on the inclination or urge of the employees to look into the Manual every time a new procedure is to be adopted. In other words, only those who have the interest and urge to refer to the manual every time a new process is adopted will produce flawless products. Other who do not will not be benefited and will continue to produce defective products. 7

Intervening Variable
The intervening variables 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 varaible(s) operating in any situation, and helps to conceptualize and explain the influence of the independent variable(s) on the dependent variable.
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The Intervening Variables

Example: It would be interesting to see how the inclusion of the moderating variable managerial expertise in the foregoing example would change the model or affect the relationships. The new set of relationships that would emerge in the presence of the (moderator). As can be seen there from, managerial expertise moderates the relationship between workforce diversity and creative synergy. In other words, creative synergy will not result from the multifaceted problem-solving skills of the diverse work force unless the manager is capable of harnessing that synergy by creatively coordinating the different skills. If the manager lacks the expertise to perform this role, then no matter how many different problemsolving skills the diverse workforce might have, synergy will just not surface. Instead of functioning effectively, the organization might just remain static, or 9

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, observation, and literature survey. Experience and intuition also guide in developing the theoretical framework. 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. 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. 4. There should be a clear explanation of why we would expect these relationships to exist. 5. A schematic diagram of the of the theoretical framework should be given so that the reader can see and easily 10 comprehend the theorized relationships.

The Need for a Theoretical Framework

A theoretical framework is a conceptual model of how one theorizes or makes logical sense of the relationships among the several factors that have been identified as important to the problem. The Theoretical framework discusses the interrelationships among the variables that are deemed to be integral to the dynamics of the situation being investigated. Developing such a conceptual framework helps us postulate or hypothesizes and test certain relationships and thus to improve our understanding of the dynamics of the situation. From the theoretical framework, then, testable hypotheses can be developed to examine whether the theory formulated is valid or not. The hypothesized relationships can thereafter be tested through appropriate statistical analysis.

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Delta Airlines Example

With airline deregulation, there were price wars among the airlines that cut costs in different ways. According to reports, Delta Airlines faced charges air-safety violations when there were sevsral near collisions in midair, and one accident that resulted in 137 deaths in1987. Four important factors that seem to have influenced these are poor communication among the cockpit crew members themselves, poor coordination between ground staff and cockpit crew, minimal training given to the cockpit crew, and management philosophy that encouraged decentralized structure. The following is the conceptual framework to show if these factors did indeed contribute to the safety violations.
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Copyright 2003 John Wiley & Sons, Inc. Sekaran/RESEARCH 4E

FIGURE 5.8 14

Definition of Hypothesis
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.

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Hypotheses Development
Once we have identified the important variables in a situation and established the relationships among them through logical reasoning in the theoretical framework, we are in a position to test whether the relationships hold true. By testing these relationships scientifically through appropriate statistical analysis, or through negative case analysis in qualitative research. Formulating such testable statements is called hypotheses development.

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Statement of Hypotheses: Formats

If Then statements: A hypothesis can also test whether there are differences between two groups (or among several groups) with respect to any variable or variables. To examine whether or not the conjectured relationships or differences exist, these hypotheses can be set either as propositions or in the form of ifthen statements. Example: If Employees who are more healthy, then they will take sick leave less frequently.
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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 is indicated. Example: The greater the stress experienced in the job, the lower the job satisfaction of employee Example: Women are more motivated than men

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Directional and Non-directional Hypotheses

Non-directional hypotheses are formulated either because the relationships or differences have never been previously explored and hence there is no basis for indicating the direction, or because there have been conflicting findings in previous research studies on the variable. Example: There is a relationship between age and job satisfaction. Example: There is a difference between the work ethic values of American and Asian employees.
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Null and Alternate Hypotheses

The null hypothesis is a proposition that states a definitive, exact relationship between two variables. That is, it states that the population correlation between two variables is equal to zero or that the difference in the means of two groups in the population is equal to zero (or some definite number). The Alternate hypothesis, which is the opposite of the null, is a statement expressing a relationship between two variables or indicating differences between groups.

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Hypothesis Testing

The steps to be followed in hypothesis testing are:

1. State the null and the alternate hypotheses. 2. Choose the appropriate statistical test depending on whether the data collected are parametric or nonparametric. 3. Determine the level of significance desired. 4. See if the output results from computer analysis indicate that the significance level is met. 5. When the resultant value is larger than the critical value, the null hypothesis is rejected, and the alternate accepted.
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Hypothesis Testing With Qualitative Research: Negative Case Analysis

Hypotheses can also be tested with qualitative data. For example, a researcher has developed a theoretical framework, that unethical practices by employees are a function of their inability to discriminate between right and wrong(1), or due to a dire need for money(2), or the organizations indifference to such practices. To test the hypothesis that these three factors are the primary ones that influence unethical practices. When even a single case does not support the hypothesis, the researcher would refute it, and the theory would be 22 revised.

Definition of Hypotheses:
A logical relationship between two or more variables (DV & IV) expressed in the form of a testable statement. (e.g.) Women are more motivated than men. Good hypothesis:
Must be adequate (sufficient/satisfactory) for its purpose Must be testable Must be better than its rivals

Can be:
Directional Non-directional
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DIRECTIONAL HYPOTHESES:
The direction of the relationship between the variables (positive/negative) is indicated.
Example: The greater the stress experienced in the job, the lower the job satisfaction of employees. Women are more motivated than men.
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NON DIRECTIONAL HYPOTHESES:

are those which shows no indication of the direction of the relationships between variables.

Example: There is a relationship between age and Job satisfaction. There is a differences between the work ethic values of American and Arabian employees.
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Null Hypotheses:
is a proposition that states a definitive, exact relationship between two variables. In general, the null statement is expressed as no (significant) difference between two groups. M = w It can also be stated as the population correlation between two variables is equal to zero (or some definite number). H0: M - w = 0 Where H0 represents the null hypotheses, M is the mean motivational level of the men, w is the mean motivational level of women.
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Alternate Hypotheses
is a statement expressing a relationship between two variables or indicating differences between groups. (e.g.) Women are more motivated than men. The alternate hypotheses for the above example is HA : M < w If we reverse the above statement like Men are more motivated than women. HA : M > w Where HA represents the alternate hypotheses.
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Examples for the Non directional relationship

There is a difference between the work ethic of American and Arabian employees. The null hypotheses would be: Ho: AM = AR Or Ho: AM - AR = 0 Where,
AM is the mean work ethic value of Americans AR is the mean work ethic value of Arabs.

The alternate hypotheses for the above example would statistically be set as: HA: AM AR HA represents the alternate hypotheses.
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