Chapter 5

Theoretical Framework &

Hypothesis Development

Slide 5-2
 Theoretical
Theoretical Framework
Framework

 Foundation deductive research project!

 Deductive research: moving from the

general (a theory) to the specific
(observations).

Slide 5-3
 Theoretical
Theoretical Framework
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).

Slide 5-4
 Theoretical
Theoretical Framework
Framework

 Basic steps:
 Identify and label the variables
correctly
 State the relationships among the
variables: formulate hypotheses
 Explain how or why you expect these
relationships

Slide 5-5
 Variable

 Any concept or construct that varies or

changes in value

 Main types of variables:

 Dependent variable
 Independent variable
 Moderating variable
 Mediating variable

Slide 5-6
 (In)dependent 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.
Slide 5-7
 Example

Slide 5-8
 (In)dependent variables
 To establish that a change in the independent
variable causes a change in the dependent
variable, all four of the following conditions should
be met:
 1. The independent and the dependent variable should co-vary: in
other words, a change in the dependent variable should be associated
with a change in the independent variable.
 2. The independent variable (the presumed causal factor) should
precede the dependent variable. cause must occur before the effect.
 3. No other factor should be a possible cause of the change in the
dependent variable. Hence, the researcher should control for the effects
of other variables.
 4. A logical explanation (a theory) is needed and it must explain why
the independent variable affects the dependent variable.
 dependent variables
 examples
 A manager is concerned that the sales of a new
product, introduced after test marketing it, do not meet
with his expectations.
The dependent variable here is “sales.”
 A basic researcher is interested in investigating the
debt‐to‐equity ratio of manufacturing companies in
southern Germany.
Here, the dependent variable is the ratio of debt to equity.
 A vice president is concerned that the employees are
not loyal to the organization and, in fact, seem to switch
their loyalty to other institutions.
The dependent variable in this case is “organizational
loyalty.”
 (In)dependent variables
 Examples
 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
that firm.
 “success of the new product” is the independent variable,
 and “stock market price” the dependent variable.
 (In)dependent variables
 What is the dependent and independent variables in
these cases:
 An investor believes that more
information increases the accuracy of his
forecasts.

 A marketing manager believes that

selecting physically attractive
spokespersons and models to endorse
their products increases the
persuasiveness of a message.
 Moderators

 Moderating variable
 Moderator 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.

 Example

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 Moderators
 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.
 Mediating Variable

 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.

 Example

Slide 5-15
 comprehensive example
 A theory says the diversity of the workforce (comprising people of
different ethnic origins, races, and nationalities) contributes more to
organizational effectiveness because each group brings its own special
expertise and skills to the workplace.

 however, This synergy can be exploited, only if managers know how to

harness the special talents of the diverse work group; otherwise they
will remain untapped.

 managerial expertise becomes the moderating variable.

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 comprehensive example
 the mediating variable that surfaces as a function of the diversity
in the workforce is “creative synergy.”

 Workforce diversity will lead to creative synergy through bringing

together their multifaceted expertise in problem solving.

 And this will increase organizational effectiveness.

 Note that creative synergy, the mediating variable, surfaces at time

t , as a function of workforce diversity, which was in place at time
2

t , to bring about organizational effectiveness in time t .

1 3

 The mediating variable of creative synergy helps us to

conceptualize and understand how workforce diversity (IV) brings
about organizational effectiveness (DV).
comprehensive example
 example
 Failure to follow accounting principles causes immense
confusion, which in turn creates a number of problems for the
organization. Those with vast experience in bookkeeping,
however, are able to avert the problems by taking timely
corrective action.
 List and label the variables in this situation, explain the
relationships among the variables, and illustrate these by means
of diagrams.

 Make up three different situations in which motivation to

work would be an independent variable, a mediating variable,
and a moderating variable.
 Hypothesis

 A proposition that is empirically testable.

It is an empirical statement concerned
with the relationship among variables.

 Good hypothesis:
 Must be adequate for its purpose
 Must be testable
 Must be better than its rivals

 Can be:
 Directional
Slide 5-20
 Non-directional
 Exercise

Give the hypotheses for the following framework:

Service Customer
quality switching

Switching
cost

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 Exercise

Give the hypotheses for the following framework:

Service Customer Customer

quality satisfaction switching

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 Argumentation

 The expected relationships / hypotheses

are an integration of:
 Exploratory research
 Common sense and logical reasoning

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