THEORETICAL THEORETICAL FRAMEWORK FRAMEWORK

and and Hypothesis Hypothesis

DevelopmentDevelopment

Business Research MethodsBusiness Research Methods

MGMT 381MGMT 381

TheoryTheory

An interrelated set of An interrelated set of statements of statements of relationshipsrelationships whose purpose is to explain or whose purpose is to explain or predictpredict

Device for interpreting, criticizing Device for interpreting, criticizing established laws, modifying them, guiding established laws, modifying them, guiding to discovery of new theories/generalizationsto discovery of new theories/generalizations

Purpose of theoryPurpose of theory: to a) explain or b) : to a) explain or b) predict of occurrences of certain predict of occurrences of certain phenomena and to c) highlight the phenomena and to c) highlight the important concepts and relationships in a important concepts and relationships in a problem situation problem situation

How are theories How are theories generated?generated?

DeductiveDeductive reasoning reasoning (conclusion (conclusion derives from something known to be derives from something known to be true)true) 1. 1.Identify problem Identify problem 2.Define purpose 2.Define purpose

3.Develop research questions 3.Develop research questions 4.Conduct review of literature4.Conduct review of literature 5.Develop hypotheses5.Develop hypotheses

6. Determine measures6. Determine measures

7. Collect data7. Collect data

8. Analyze data8. Analyze data

9. Interpret data9. Interpret data

How are theories How are theories generated?generated? Science is accomplished by Science is accomplished by

deductiondeduction

How are theories How are theories generated?generated? InductiveInductive reasoning reasoning (conclusion (conclusion

derives on the basis of derives on the basis of observation of phenomena or observation of phenomena or facts)facts)

We observe cars on a street and note We observe cars on a street and note that 10 cars in a raw are white. But that 10 cars in a raw are white. But this does not mean 11this does not mean 11thth car will be car will be whitewhite

Why does this happen? Develop Why does this happen? Develop hypothesis. Test hypothesis.hypothesis. Test hypothesis.

Where do original Where do original ideas come from?ideas come from? Intensive case study investigationIntensive case study investigation Rules of thumbRules of thumb Hypotheses testingHypotheses testing

Good TheoryGood Theory

Guides the studyGuides the study Limits what the study wants to Limits what the study wants to

achieveachieve Suggests the most appropriate Suggests the most appropriate

research designresearch design Provides a framework for the Provides a framework for the

studystudy

Theoretical FrameworkTheoretical Framework

A conceptual framework of how a A conceptual framework of how a researcher theorizes the relationships researcher theorizes the relationships among different phenomena and among different phenomena and explains these phenomena and why explains these phenomena and why they are associated with each otherthey are associated with each other

Identifies several factors and variables Identifies several factors and variables that are important to the problem at that are important to the problem at hand hand

Theoretical FrameworkTheoretical Framework

It is a logically developed, It is a logically developed, described and elaborated network described and elaborated network of associations among variables of associations among variables identified through interviews, identified through interviews, observations and literature reviewobservations and literature review

Theoretical FrameworkTheoretical Framework

Identifies the relationships among the Identifies the relationships among the variables considered important to the variables considered important to the study of a problemstudy of a problem

Explains the theory underlying these Explains the theory underlying these relationshipsrelationships, describes the nature and , describes the nature and direction of these relationships direction of these relationships

Foundation of the entire research Foundation of the entire research projectproject

The process of The process of building theoretical building theoretical frameworkframework Introducing definitions of the Introducing definitions of the

concepts examined or variablesconcepts examined or variables Developing a conceptual model that Developing a conceptual model that

provides a descriptive representation provides a descriptive representation of the theory developedof the theory developed

Introducing a theory that provides an Introducing a theory that provides an explanation of relationships between explanation of relationships between the variables in the modelthe variables in the model

Components of the Components of the Theoretical FrameworkTheoretical Framework Variables relevant to the studyVariables relevant to the study Relationships among variablesRelationships among variables Nature and direction of the Nature and direction of the

relationship based on previous relationship based on previous research. Positive ? Negative?research. Positive ? Negative?

Explanation of why we would Explanation of why we would expect these relationships to exist expect these relationships to exist

A schematic diagram of the A schematic diagram of the theoretical framework to visualize theoretical framework to visualize the theorized relationships (visual the theorized relationships (visual model)model)

Main types of Main types of variablesvariables A variable A variable is anything that can take is anything that can take

on differing or varying values on differing or varying values Dependent Dependent (criterion) (DV)(criterion) (DV) IndependentIndependent (predictor) (IV) (predictor) (IV) Moderating or explanatoryModerating or explanatory - has - has a a

strong influencestrong influence on the IV-DV on the IV-DV relationship, modifies this relationshiprelationship, modifies this relationship

Intervening or mediatingIntervening or mediating- - temporarily temporarily influencesinfluences the DV and IV relationship the DV and IV relationship

ExtraneousExtraneous

The relationships between The relationships between independent and dependent independent and dependent

variablesvariables

Cultural ValuesCultural Values

Number of Books

Number of Books

BehaviorBehavior

Reading Ability

Reading Ability

IV DV

IV DV

The relationships between IV, The relationships between IV, DV and moderating variablesDV and moderating variables

Number of Books Number of Books

Reading Ability

Reading Ability

IV

DV

Parents’

Literacy

Parents’

Literacy

Moderating variable

The relationships between IV, The relationships between IV, DV and moderating variablesDV and moderating variables

Quality ofProductsQuality ofProducts PurchasesPurchasesIV DV

Consumers’ Needs

Consumers’ Needs Moderating variable

The relationships between IV, The relationships between IV, DV, intervening and DV, intervening and moderating variablesmoderating variables

Quality ofProductsQuality ofProducts PurchasesPurchasesIV

DV

Consumers’ Needs

Consumers’ Needs Moderating variable

WEATHERWEATHER

Intervening variable

ModelModel

Formalized (visual) representation Formalized (visual) representation of a theoretical frameworkof a theoretical framework

Designed through the use of Designed through the use of symbols or physical analoguessymbols or physical analogues

Represents theory so that theory Represents theory so that theory can be tested, examined and can be tested, examined and analyzedanalyzed

Simplified versions of phenomena Simplified versions of phenomena under studyunder study

Example of a ModelExample of a Model

Price Price SettingSettingPrice Price

SettingSetting

CostCost

Competitor’s price

Competitor’s price

Target profitTarget profit

Target marketTarget market

DV

IV

IV

IV

IV

Example of a ModelExample of a Model

DV

IV

IV

IV

IV

Student Performan

ce

Student Performan

ce

InstructorInstructor

Student Effort

Student Effort

Study Time Study Time

Student Abilities

Student Abilities

Technology

Technology

MV

IVs

Propositions and Propositions and HypothesesHypotheses StatementsStatements about concepts which may be about concepts which may be

judged judged as true or false as true or false if it refers to observable if it refers to observable phenomena phenomena

When a proposition is formulated When a proposition is formulated for empirical for empirical testing it is called a hypothesis testing it is called a hypothesis

A concrete statement of an abstract A concrete statement of an abstract relationship described in a theoryrelationship described in a theory (e.g. sales (e.g. sales and economic hardship are related)and economic hardship are related)

RelationalRelational (relationships between two or more (relationships between two or more variables)variables)

ExplanatoryExplanatory or or causalcausal (one concept explains or (one concept explains or causes the other one)causes the other one)

HypothesesHypotheses

Guide the direction Guide the direction of the studyof the study Limit what we studyLimit what we study Suggest the most appropriate research Suggest the most appropriate research

designdesign Provide a framework Provide a framework to organize the to organize the

conclusionsconclusions Play an important role in the Play an important role in the

development of theorydevelopment of theory Can be developed from the theoretical Can be developed from the theoretical

framework framework

Definition of Definition of HypothesisHypothesis A hypothesis is an A hypothesis is an educated educated

guess about a problemguess about a problem’’s solutions solution

Example:Example:If the pilots are given If the pilots are given

adequate adequate training to handle a training to handle a plane, air safety plane, air safety violations will violations will be reducedbe reduced

Directional HypothesesDirectional Hypotheses

If in stating the relationships between If in stating the relationships between two variables or comparing two groups two variables or comparing two groups terms, such as terms, such as ‘‘positivepositive’’, , ‘‘negativenegative’’, , ‘‘more thanmore than’’, , ‘‘less thanless than’’ and and ‘‘the likethe like’’ are used then these hypotheses are are used then these hypotheses are directional.directional.

Examples:Examples: Employees who are Employees who are moremore healthy take healthy take

sick leave lsick leave lessess frequently frequently The The greatergreater the stress on the job, the the stress on the job, the

lowerlower the job satisfaction the job satisfaction

Non-directional Non-directional HypothesesHypotheses

If there is no indication of the If there is no indication of the direction of the relationships or direction of the relationships or differences then these differences then these hypotheses are hypotheses are non-directionalnon-directional

Examples: Examples: There is a relationships between age There is a relationships between age and job satisfaction.and job satisfaction. There is a difference between the There is a difference between the work ethic values of American and work ethic values of American and Asian employees.Asian employees.

Null HypothesisNull Hypothesis

Null HypothesisNull Hypothesis (Ho)(Ho)–the statement –the statement expressed as expressed as nono (significant) (significant) relationships between the 2 variables relationships between the 2 variables or or nono (significant) differences between (significant) differences between 2 groups exist2 groups exist

Null hypothesis is set up to be rejected Null hypothesis is set up to be rejected in order to support an alternative in order to support an alternative hypothesishypothesis

Alternative HypothesisAlternative Hypothesis

Alternative Hypothesis Alternative Hypothesis (H1)(H1) –is the –is the opposite of the null: statement opposite of the null: statement expressing a relationship between 2 expressing a relationship between 2 variables or indicating differences variables or indicating differences between 2 groupsbetween 2 groups

Ho Ho is rejected if the results do not is rejected if the results do not meet the p<0.05 level of significancemeet the p<0.05 level of significance

Examples of Examples of HypothesesHypotheses Null HypothesisNull Hypothesis: There is no : There is no

relationship between stress relationship between stress experienced on the job and the experienced on the job and the job satisfaction of employees.job satisfaction of employees.

Alternative HypothesisAlternative Hypothesis: There is a : There is a relationships between stress relationships between stress experienced on the job and the experienced on the job and the job satisfaction of employees.job satisfaction of employees.

Why do we develop Why do we develop hypotheses?hypotheses?

Suggest variables to be included in the Suggest variables to be included in the research designresearch design

Provide possible answers to the research Provide possible answers to the research questionsquestions

Allow researchers to speculate about Allow researchers to speculate about possible research question answerspossible research question answers

Example: Example: Housing sales decrease because Housing sales decrease because the level of competition is extremely highthe level of competition is extremely high

Imply problem (decreased housing sales)Imply problem (decreased housing sales)

How to develop How to develop hypotheses? hypotheses?

Depends on information available:Depends on information available: 1) Information from previous 1) Information from previous

researchresearch 2) Information from economics, 2) Information from economics,

marketing, social, psychological marketing, social, psychological impacts of pricing on…, etc.impacts of pricing on…, etc.

3) Manager’s experience with a 3) Manager’s experience with a problemproblem

When developing When developing hypotheseshypotheses

Need to look at three elements: Need to look at three elements: a) a) Research question(s)Research question(s) b) Hypothesis b) Hypothesis c) Boundaries of study c) Boundaries of study

Example:Example:Research questionResearch question: : ““Will our TV ad attract Will our TV ad attract clients?clients? HypothesisHypothesis: : ““Yes, it will attracYes, it will attractt””

Example:Example:

BoundariesBoundaries limit the research process, e g. limit the research process, e g. research is limited to only female and male, a research is limited to only female and male, a specific geographical region, a certain product.specific geographical region, a certain product.

Boundaries depend on the research Boundaries depend on the research purpose and purpose and influence the value of the influence the value of the answer. answer.