School of Business

Research Methods for Business

Chapter 5

Theoretical Framework & Hypothesis Development

 Learning Objectives

➢ 5.1 Discuss the need for a theoretical framework in

deductive research.

➢ 5.2 Describe four main types of variables and identify and

label variables associated with any given situation.

 Objective 5.1
Introduction
• A theoretical framework is the foundation of hypothetico-deductive research.

• The development of a theoretical framework is crucial in deductive, theory testing, and causal

research.

• A theoretical framework guides your research, determining what things you will measure, and

what statistical relationships you will look for.

 Objective 5.1
The Need for Theoretical Framework
 A theoretical framework represents your beliefs on how certain phenomena (or variables or

concepts) are related to each other (a model) and an explanation on why you believe that these

variables are associated to each other (a theory).

 Basic steps:

o Identify and label the variables correctly

o State the relationships among the variables: formulate hypotheses
o Explain how or why you expect these relationships
 Objective 5.2
Variables
 A variable is any concept or construct that varies or changes in value.

 Main types of variables:

o Dependent variable

o Independent variable

o Moderating variable

o Mediating variable
 Objective 5.2
Variables
Dependent and Independent Variables
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.
Independent variable (IV) influences the DV in either positive or negative way. The variance in the
DV is accounted for by the IV.
 Conditions to establish that a change in the IV causes a change in the DV:
• The IV and the DV should covary
• The IV should precede the DV
• No other factor should be a possible cause of the change in the DV
• A logical explanation (a theory) is needed and it must explain why the IV affects the DV
Objective 5.2
Variables
 Objective 5.2
Variables

 Moderators

 A moderating variable 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.
 Objective 5.2
Variables

 Moderators
 Objective 5.2
Variables

 Mediators
 A 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.
 Brief Recap

✓ The Independent Variable helps to explain the variance in the Dependent Variable.

✓ The Mediating Variable surfaces at time t2 as a function of the Independent Variable,

which also helps us to conceptualize the relationship between the Independent Variable

and Dependent Variable. It does not add to the variance already explained by the

Independent Variable.

✓ The Moderating Variable has a contingent effect on the relationship between the two

variables. It has an interaction effect with the Independent Variable in explaining the

variance.