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Chapter 6

Business Research
Process (Steps 4-5)
BusinessResearch Book of VU
Research Methods For Business (Uma Sekaran)

Resource Person: Furqan-ul-haq Siddiqui

The Business Research Process

Observation Theoretical
Framework Generation of
1 Preliminary Data Hypothesis 5
Broad definition
Gathering 4 Variables
problem area 2 Identification and
analysis &

Decision Report Report Deduction

Making Presentation Writing Research Question
4. Theoretical Framework
A theoretical framework is a conceptual model of
how one theorizes the relationship among the
several factors that have been identified as
important to the problem.
From the theoretical framework, testable
hypotheses can be developed to see whether the
theory formulated is valid or not.
Theoretical framework addresses:
Elaborates the relationship among the variables.
Explains the logic underlying these relationships.
Describes the nature, and direction of the
The Components of the Theoretical Framework
A good theoretical framework identifies and labels
the important variables in the situation that are
relevant to the problem identified.
1. Make an inventory of variables: The variables
considered relevant to the study should be clearly
identified and labeled in the discussion.
2. Specify the direction of relationship: Theorize
the direction of relationship among the variable
negative or positive.
3. Give a clear explanation of why we should
expect the proposed relationships to exist: based
upon logic, previous studies etc.
4. Make an inventory of propositions: Stipulation
of logical relationship between any two variables
means the formulation of a proposition. If such
relationships have been proposed between different
variables, it will result in the formulation of a
number of propositions.
Number of interrelationships resulting in a number
of propositions.
5. Arrange these propositions in a sequential
order: One proposition generates the next
proposition, which generates the next following
proposition, which in turn generates the next
following proposition, and so on.
Got it
Example: Research Question: Why middle class
families decline in their size?
1. Inventory of variables: Education levels of the
couples, age at marriage, working women,
exposure to mass media of communication,
accessibility to health services, rationalism,
practicing of family planning practices, aspirations
about the education of children, shift to nuclear
families, mobility orientation.
2. Specify the direction of relationship: If you just make
statements by using variables, it can indicate the direction
of relationship.
Higher the education higher the age at marriage.
Higher the education of women greater the chances of their
being career women.
Higher the education more the rationalism.
Higher the education more the practicing of family planning
Higher the education of the parents the higher their aspirations
about the education of their children.
Higher the education of the couple greater thee chances of
shifting to nuclear families.
Higher the education of the couples the higher their mobility
3. Give a clear explanation of why we should expect
the proposed relationships to exist.
For example higher the education higher the age at
marriage. One could build up the argument like this:
For purposes of getting high levels of education the
youngsters spend about 16 years of their life in
educational institutions
4. Make an inventory of propositions. The
relationships specified under item 2 can be examples
of propositions. Formulate additional propositions
by using other combinations of variables.
5. Arrange these propositions in a sequential order.
These propositions can be arranged sequentially.
Higher the education, more the rationalism.
Higher the rationalism, more the investment in career
Greater the investment in career achievement, higher the
age at marriage.
Higher the age at marriage, smaller the size of family.
Itmay be said that a variable generally is
anything that may assume different numerical
or categorical values.

The values can differ at various times for the

same object or person, or the the values can
differ at the same time for different objects or
For example gender, Marital status, Family income,
A persons attitude toward women empowerment is
variable; it can range from highly favorable to
highly unfavorable.
In this way the variation can be in quantity, intensity,
amount, or type; the examples can be production
units, absenteeism, gender, religion, motivation,
grade, and age.
A variable may be situation specific; for example
gender is a variable but if in a particular situation
like a class of Research Methods if there are only
female students, then in this situation gender will not
be considered as a variable.
Dependent Variable (Criterion variable)
The dependent variable is the variable of primary interest to
the researcher. The researchers goal is to explain or predict
the variability, in the dependent variable.
The variable that is the effect or is the result or
outcome of another variable is the dependent variable
(also referred to as outcome variable or effect
The Dependent Variable depends on the
manipulation or experimental conditions (Independent
The dependent variable depends on the causes.
The sales of a new product introduced after marketing is not
as high as expected
S = f (m)
where s= sales & m= marketing
Independent Variable (Predictor variable)
An independent variable is one that influence the
dependent variable in either a positive or negative
Independent variable is what you or nature
manipulates a treatment or program or cause.
with each unit of increase in the independent
variable, there is is increase or decrease in the
dependent variable.
S = f (m)
where s= sales & m= marketing
Relationships between Variables

The ultimate goal or research analysis is to find

a relationship between variables
We want to reject the null hypothesis- that there
is no relationship between the independent and
dependent variable
Relationship between independent
and dependent variable
Research studies indicate that successful new product
development has an influence on the stock market price of a
company. That is, the more successful the new product turns
out to be, the higher will be the stock market price of that firm.
Therefore, the success of the New product is the
independent variable, and stock market price the dependent

New product success Stock market price

(independent variable) (dependent variable)

An Bank manager wants to increase the
commitment of his subordinates by increasing
their salaries.

What would be the dependent & Independent

List the variables in this exercise individually and label them as
dependent or independent. Diagram the relationship.
Ex No. 1:
A research indicates that taking milk makes the bones
of children strong.

Ex. No. 2:
A manager believes that good supervision and
training would increase the production level of the
Moderating Variable
The moderating variable is one that has strong
contingent effect on the independent variable -
dependent variables relationship
The presence of a third variable (the moderating
variable) modifies the originally expected
relationship between the independent and the
dependent variables.
1. Strong relationship between the library facility
(X) and performance of students (Y). Depends on
the interest and inclination of students (MV).
Modifies the original relationship.

2. 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 these relationships can be said to hold true
generally for all workers it is nevertheless contingent on the
inclination or urge of employees to look into the manual
every time a new procedure is to be adopted.
Relationship between independent,
dependent and Moderating variables

Availability of
reference manuals # of rejects
(dependent variable)
(independent variable)

Interest & inclination

(Moderating Variable)
Intervening Variable
An intervening variable is a hypothetical internal state that is
used to explain relationships between observed variables, such
as independent and dependent variables.
The intervening variable, appears in more complex causal
relationships. It comes between the independent and dependent
variables and shows the link or mechanism between them. In a
sense, the intervening variable acts as a dependent variable with
respect to independent variable and acts as an independent
variable toward the dependent variable.
Intervening variables are not real things. They are
interpretations of observed facts, not facts themselves. But they
create the illusion of being facts.

Surfaces between the time X starts influencing the Y.

Time factor. In fact is a function of X.
IV IVV DV. IVV may be DV for IV in the first
place, then it is IV for DV.
A theory of suicide states that married people are less likely
to commit suicide than single people.
marital status (independent variable)
suicide (dependent variable)
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).
Degree of social integration (intervening variable)
Five-day work week results in higher productivity.
What exactly is that factor which theoretically affects the
observed phenomenon but cannot be seen?
The introduction of five-day work week (IV) will increase
job satisfaction (IVV), which will lead to higher
productivity (DV).
Relationship among the independent,
dependent and intervening variables
Diagram relationship between workforce diversity, organizational effectiveness and
managerial expertise.

Independent Variable Intervening Variable Dependent Variable

Relationship between independent,
intervening, moderating, and dependent

Workforce Creative Organizational

diversity synergy effectiveness

Output of the organization increase or
decrease due to employee attitude
So the output dependent variable and
employee attitude independent variable
The knowledge of child can be increase
due to book readings
The child knowledge is dependent, book
reading independent, we can say the
parents literacy is moderating, and
informal education program from
Government is intervening variable to both
child & parents
The effective reward system can control
the turnover rate of employees.
Here the reward system can be called
independent, turnover rate dependent,
Training program intervening and manager
expertise are moderating.
List and label the variables in following
The manager of P&G observes that the morale
of employees in her company is low. She thinks
that if their working conditions are improved,
pay scale raised and vocation benefits made
attractive. The morale will be boasted But she
doubts thats pay increase would not effect
morale of those employees who have
supplemental income.
Relationship between theoretical
framework and Preliminary Data
Literature survey identifies the variables
that might be important, as determined by
previous research findings.
Where as theoretical framework
elaborates the relationships among the
variables, explains the theory underlying
these relations, and describes the nature
and direction of relationships.

A hypothesis can be defined as a logically

conjectured relationship between two or more
variables expressed in the form of a testable
A useful hypothesis is a testable statement
which may include a prediction
How Are Hypotheses Written?
Chocolate may cause pimples.
Salt in soil may affect plant growth.
Plant growth may be affected by the color of the light.
Bacterial growth may be affected by temperature.
Ultra violet light may cause skin cancer.
Temperature may cause leaves to change color.
All of these are examples of hypotheses because
they use the tentative word "may.". However, their
form is not particularly useful.
Both an hypothesis and a problem contribute to the
body of knowledge which supports or refutes an
existing theory. An hypothesis differs from a
problem. A problem is formulated in the form of a
question; it serves as the basis or origin from which
an hypothesis is derived. An hypothesis is a
suggested solution to a problem. A problem
(question) cannot be directly tested, whereas an
hypothesis can be tested and verified.
Statement of Hypotheses: Formats

If-Then Statement
To test differences between two or more groups

If employees are paid higher, then they will be highly

motivated and vice versa.

Must check:
Directional and Non-directional Hypotheses

Direction of relationship between variables (+tive
/-tive ) is indicated or the nature of differences
between two groups on a variable (more than/
less than) is indicated

Women are more motivated than men.

The greater the stress experienced in the job, the lower

the job satisfaction of employees.
Directional and Non-directional

Do indicate a relationship or difference but no
indication of the direction

There is relationship between age and job satisfaction.

There is difference between the work ethics values of

American and Asian employees.
There is a relationship between training & productivity
Null and Alternate Hypotheses

The null hypothesis is expressed as no (significant

relationship between two variables or no (significant)
difference between two groups. That is, it states that the
population correlation between two variables is equal to
zero (or some definite number) or the difference in the
means of two groups in a population is equal to zero or
(some definite number).

The alternative hypothesis, which is the opposite of the

null, is a statement expressing a relationship between
two variables or indicating difference between groups.
H0: M = W
H0: M - W = 0

where H0 represent null hypothesis

M is the mean motivational level of the men.
W is the mean motivational level of women

The alternate for the preceding example would statistically be set as follows.
HA: M < M

HA: M > M

where HA represents the term alternate hypothesis.