Business Research Skills

Chapter :
Theoretical Framework
and Formulation of
Hypothesis
Need of Theoretical Framework

 Theoretical Framework is a conceptual model

that provides logical relationship between the
factors so identified in the research problem.
Need of Theoretical Framework

 Improves the understanding of the situation

under study.

 Identify the variables under study.

 Helps to frame hypothesis that are testable.

Variables- Meaning and Types

A variable is anything that can take on

differing or varying values.

 Values vary for different subjects at same

time or for same subject at different times.
Examples of Variables

 Production units
 Absenteeism
 Motivation
 Types of Variables

 Dependent Variable (DV)

 Independent Variable (IV)
 Moderating Variable (MV)
 Intervening Variable (IVV)
 Dependent Variable (DV)

 The variable under study which is monitored

 Alsoreferred to as the criterion variable or

predicted variable
Examples

 Manager is interested in analyzing Debt-

Equity Ratio.
 Sales is not picking up.
 Independent Variable (IV)

 The variable that influences the dependent

variable in a positive or negative way.

 Thevariance in the dependent variable is

caused by IV.

 Alsoreferred to as explanatory or predictor

variable.
Example:

The success of new product influences the

stock price levels.

New product
Stock Market Price
success

IV DV
 Moderating Variable (MV)

 The variable having strong contingent effects

on the independent variable.
IV DV

Availability of No. of Defects

Reference

Interest and
Inclination

MV
 Another Example of MV
Work force diversity impacts OE.
IV DV

Organizational
Workforce Diversity Effectiveness

Managerial Expertise

MV
 Intervening Variable (IVV)

 IVV is the one that starts operating between

the time the IV starts operating to influence
the DV.
 Example of IVV

IV IVV DV

Organizational
Workforce Creative Synergy Effectiveness
Diversity
 Extraneous Variable

 Infinite
number of variables that might affect
a given relationship between IV and DV.
 Meaning of Hypothesis

 It is a proposition that is formulated for

empirical testing.

 Propositionis a statement about observable

phenomena that may be judged as true or
false.
Empirical Testing

 The relationship or the description so stated

are tested scientifically using statistical
analysis or other qualititative techniques.
 The reliable information is obtained on the
relationship under study.
 Changes if any may be required.
 Formats of Hypotheses

- If -Then Statements

- Directional and Non-Directional Statements

 Types of Hypotheses

- Descriptive Hypotheses

- Relational Hypotheses

- Null Hypotheses

- Alternate Hypotheses
 Descriptive Hypotheses

 Describes the existence, size, form or

distribution of some variable.

- 60% of investors favors cash dividend.

- MBA institutes facing problems in placement
 Relational Hypotheses

 Describes the relationship between two or

more variables.

The greater the stress experienced in the job

the lower the job-satisfaction.( directional)
Women are better than men
There is a relationship between age and job-
satisfaction. (non-directional)
 Relational Hypotheses

 Correlational Hypotheses
Only shows the correlation between two or
more variables but no claims are made that
one causes the other.
 Explanatory Hypotheses.

Claims are made that one variable causes

other to occur.
 Null Hypotheses

 The definitive statement that explains the

relationship.
 The null hypothesis relates to the statement
being tested,
 Alternate Hypotheses

 All other permissible relationship refers to the

Alternate Hypotheses.
• The alternative hypothesis relates to the
statement to be accepted if / when the null
hypothesis is rejected.
 Importance of Hypotheses

 Guides the direction of study;

 Identifies the facts relevant for the study;
 Helps in the selection of Research Design;
 Helps in providing the framework in which the
results have to be given.
Characteristics of a Good Hypothesis

 Adequate for the purpose

iii) Should address the original problem

iv) Clearly identifies the variables relevant in
the study.
v) Helps in knowing the research design
vi) Helps in organizing the results of the study.
Characteristics of a Good Hypothesis

 Testable

iii) Uses acceptable techniques

iv) Simple requiring few conditions
v) Explanation can be given from the given
theoretical framework.
Characteristics of a Good Hypothesis

 Better than its rivals

iii) Explains more facts than its rivals

iv) Greater variety or scope of facts