Qurat-ul-Ain

Roll no:142109
Week #5

Theory:
A theory consists of a coherent set of general propositions that offer an explanation of some
phenomena by describing the way other things correspond to this phenomena. Put another way, a
theory is a formal, testable explanation of some events that includes explanations of how things
relate to one another.
For example, if a Web designer is trying to decide what color background is most effective in
increasing online sales, he may first consult previous studies examining the effects of color on
package design and retail store design. He may also find theories that deal with the wavelength
of different colors, affective response to colors, or those that explain retail atmospherics. This
may lead to the specific prediction that blue is the most effective background color for a Web
site. While it may seem that theory is only relevant to academic or basic business research,
theory plays a role in understanding practical research as well. Before setting research objectives,
the researcher must be able to describe the business situation in some coherent way. Without this
type of explanation, the researcher would have little idea of where to start. Ultimately, the logical
explanation helps the researcher know what variables need to be included in the study and how
they may relate to one another.
The theoretical framework is the foundation on which the entire research project is based. It is a
logically developed, described, and elaborated network of associations among the variables
deemed relevant to the problem situation and identified through such processes as interviews,
observations, and literature survey. Experience and intuition also guide in developing the
theoretical framework.
It becomes evident at this stage that to arrive at good solutions to the problem, one should
correctly identify the problem first, and then the variables that contribute to it. The importance of
conducting purposeful interviews and doing a thorough literature review now becomes clear.
After identifying the appropriate variables, the next step is to elaborate the network of
associations among the variables, so that relevant hypotheses can be developed and subsequently
tested. Based on the results of hypotheses testing (which would indicate whether or not the
hypotheses have been supported), the extent to which the problem can be solved would become
evident. The theoretical framework is thus an important step in the research process.
The relationship between the literature survey and the theoretical framework is that the former
provides a solid foundation for developing the latter. That is, the literature survey identifies the
variables that might be important, as determined by previous research findings. This, in addition
to other logical connections that can be conceptualized, forms the basis for the theoretical model.
The theoretical framework elaborates the relationships among the variables, explains the theory
underlying these relations, and describes the nature and direction of the relationships. Just as the
literature survey sets the stage for a good theoretical framework, this in turn provides the logical
base for developing testable hypotheses.
In general, researchers should aim to base their investigations upon objective evidence,
supported by theory. A theory is a conceptual scheme based on foundational statements called
axioms that are assumed to be true. Objective evidence is gathered by compiling relevant
findings from secondary sources. Likewise, an appropriate theory to guide the research might be
identified by reviewing academic literature contained in books, journals and monographs. The
researcher should rely on theory to determine which variables should be investigated. Past
research on theory development and testing can provide important guidelines on determining
dependent variables (variables that depend on the values of other variables) and independent
variables (variables whose values affect the values of other variables). Furthermore, theoretical
considerations provide information on how the variables should be operationalised and
measured, as well as how the research design and sample should be selected. A theory also serves
as a foundation on which the researcher can organize and interpret the findings. Conversely, by
neglecting theory, the researcher increases the likelihood that they will fail to understand the data
obtained or be unable to interpret and integrate the findings of the project with findings obtained
by others. Theory also plays a vital role in influencing the research procedures adopted in basic
research. Applying a theory to a marketing research problem requires creativity on the part of the
researcher, however. A theory may not specify adequately how its abstract constructs (variables)
can be embodied in a real-world phenomenon.
Moreover, theories are incomplete; they deal with only a subset of variables that exist in the real
world. Hence, the researcher must also identify and examine other variables that have yet to be
published as theories
What Are the Goals of Theory?
Suppose a researcher investigating business phenomena wants to know what caused the financial
crisis. Another person wants to know if organizational structure influences leadership style. Both
of these individuals want to gain a better understanding of the environment and be able to predict
behavior; to be able to say that if we take a particular course of action we can expect a specific
outcome to occur. These two issuesunderstanding and predictingare the two purposes of
theory.
Accomplishing the first goal allows the theorist to gain an understanding of the relationship
among various phenomena. For example, a financial advisor may believe, or theorize, that older
investors tend to be more interested in investment income than younger investors. This theory,
once verified, would then allow her to predict the importance of expected dividend yield based
on the age of her customer. Thus a theory enables us to predict the behavior or characteristics of
one phenomenon from the knowledge of another phenomenon. The value of understanding and
anticipating future conditions in the environment or in an organization should be obvious. In
most situations, of course, understanding and prediction go hand in hand. To predict phenomena,
we must have an explanation of why variables behave as they do. Theories provide these
explanations.
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 defined. It logically describes the interconnections among these
variables. The relationships among the independent variables, the dependent variable(s), and if
applicable, the moderating and intervening variables are elaborated. Should there be any
moderating variable(s), it is important to explain how and what specific relationships they would
moderate. An explanation of why they operate as moderators should also be offered. If there are
any intervening variables, a discussion on how or why they are treated as intervening variables
would be necessary. Any interrelationships among the independent variables themselves, or
among the dependent variables themselves (in case there are two or more dependent variables), if
any, should also be clearly spelled out and adequately explained.
The elaboration of the variables in the theoretical framework thus addresses the issues of why or
how we expect certain relationships to exist, and the nature and direction of the relationships
among the variables of interest. A schematic diagram of the conceptual model described in the
theoretical framework will also help the reader to visualize the theorized relationships.
It may be noted that we have used the terms theoretical framework and model interchangeably.
There are differences of opinion as to what a model actually represents. Some describe models as
simulations; others view a model as a representation of relationships between and among
concepts. We use the term model here in the latter sense as a conceptual scheme connecting
concepts.
In sum, there are five basic features that should be incorporated in any theoretical framework.

1. The variables considered relevant to the study should be clearly identified and labeled in the
discussions.
2. The discussions should state how two or more variables are related to one another. This should
be done for the important relationships that are theorized to exist among the variables.
3. If the nature and direction of the relationships can be theorized on the basis of the findings of
previous research, then there should be an indication in the discussions as to whether the
relationships would be positive or negative.
4. There should be a clear explanation of why we would expect these relationships to exist. The
arguments could be drawn from the previous research findings.
5. A schematic diagram of the theoretical framework should be given so that the reader can see
and easily comprehend the theorized relationships.

HYPOTHESES DEVELOPMENT
A hypothesis can be defined as a logically conjectured relationship between two or more
variables expressed in the form of a testable statement. Relationships are conjectured on the basis
of the network of associations established in the theoretical framework formulated for the
research study. By testing the hypotheses and confirming the conjectured relationships, it is
expected that solutions can be found to correct the problem encountered.
A hypothesis is an unproven statement or proposition about a factor or phenomenon that is of
interest to the researcher. For example, it may be a tentative statement about relationships
between two or more variables as stipulated by the theoretical framework or the analytical
model. Often, a hypothesis is a possible answer to the research question. Hypotheses go beyond
research questions because they are statements of relationships or propositions rather than merely
questions to which answers are sought. Research questions are interrogative; hypotheses are
declarative and can be tested empirically. An important role of a hypothesis is to suggest
variables to be included in the research design
Once we have identified the important variables in a situation and established the relationships
among them through logical reasoning in the theoretical framework, we are in a position to test
whether the relationships that have been theorized do in fact hold true. By testing these
relationships scientifically through appropriate statistical analyses, or through negative case
analysis in qualitative research we are able to obtain reliable information on what kinds of
relationships exist among the variables operating in the problem situation. The results of these
tests offer us some clues as to what could be changed in the situation to solve the problem.
Formulating such testable statements is called hypotheses development.

Statement of Hypotheses: Formats

IfThen Statements
As already stated, a hypothesis is a testable statement of the relationship among variables. A
hypothesis can also test whether there are differences between two groups (or among several
groups) with respect to any variable or variables. To examine whether or not the conjectured
relationships or differences exist, these hypotheses can be set either as propositions or in the
form of ifthen statements. The two formats can be seen in the following two examples.
Example: Employees who are more healthy will take sick leave less frequently.
Example: If employees are more healthy, then they will take sick leave less frequently.

Directional and Nondirectional Hypotheses

If, in stating the relationship between two variables or comparing two groups, terms such as
positive, negative, more than, less than, and the like are used, then these hypotheses are
directional because the direction of the relationship between the variables (positive/negative) is
indicated, or the nature of the difference between two groups on a variable (more than/less than)
is postulated
Example: The greater the stress experienced in the job, the lower the job satisfaction of
employees.
Example: Women are more motivated than men.

On the other hand, nondirectional hypotheses are those that do postulate a relationship or
difference, but offer no indication of the direction of these relationships or differences. In other
words, though it may be conjectured that there would be a significant relationship between two
variables, we may not be able to say whether the relationship would be positive or negative.
Likewise, even if we can conjecture that there will be differences between two groups on a
particular variable, we will not be able to say which group will be more and which less on that
variable
Example: There is a relationship between age and job satisfaction.
Example: There is a difference between the work ethic values of American and Asian employees.

Nondirectional hypotheses are formulated either because the relationships or differences have
never been previously explored and hence there is no basis for indicating the direction, or
because there have been conflicting findings in previous research studies on the variables. In
some studies a positive relationship might have been found, while in others a negative
relationship might have been traced. Hence, the current researcher might only be able to
hypothesize that there would be a significant relationship, but the direction may not be clear. In
such cases, the hypotheses could be stated nondirectionally. Whenever the direction of the
relationship is known, it is better to develop directional hypothesis.

Null and Alternate Hypotheses

The null hypothesis is a proposition that states a definitive, exact relationship between two
variables. That is, it states that the population correlation between two variables is equal to zero
or that the difference in the means of two groups in the population is equal to zero (or some
definite number). In general, the null statement is expressed as no (significant) relationship
between two variables or no (significant) difference between two groups. The alternate
hypothesis, which is the opposite of the null, is a statement expressing a relationship between
two variables or indicating differences between groups.
To explain it further, in setting up the null hypothesis, we are stating that there is no difference
between what we might find in the population characteristics (i.e., the total group we are
interested in knowing something about) and the sample we are studying (i.e., a limited number
representative of the total population or group that we have chosen to study). Since we do not
know the true state of affairs in the population, all we can do is to draw inferences based on what
we find in our sample. What we imply through the null hypothesis is that any differences found
between two sample groups or any relationship found between two variables based on our
sample is simply due to random sampling fluctuations and not due to any true differences
between the two population groups (say, men and women), or relationships between two
variables (say, sales and profits). The null hypothesis is thus formulated so that it can be tested
for possible rejection. If we reject the null hypothesis, then all permissible alternative hypotheses
relating to the particular relationship tested could be supported. It is the theory that allows us to
have faith in the alternative hypothesis that is generated in the particular research investigation.
This is one more reason why the theoretical framework should be grounded on sound,
defendable logic to start with. Otherwise, other researchers are likely to refute and postulate
other defensible explanations through different alternative hypotheses.
Methodology:
Population
Population refers to the entire group of people, events, or things of interest that the researcher
wishes to investigate.
Element
An element is a single member of the population.
Population Frame
The population frame is a listing of all the elements in the population from which the sample is
drawn. Although the population frame is useful in providing a listing of each element in the
population, it may not always be a current, updated document.
Sample
A sample is a subset of the population. It comprises some members selected from it. In other
words, some, but not all, elements of the population would form the sample.
Subject
A subject is a single member of the sample, just as an element is a single member of the
population.
SAMPLING
Sampling is the process of selecting a sufficient number of elements from the population, so that
a study of the sample and an understanding of its properties or characteristics would make it
possible for us to generalize such properties or characteristics to the population elements. The
characteristics of the population such as (the population mean), (the population standard
deviation), and 2 (the population variance) are referred to as its parameters. The central
tendencies, the dispersions, and other statistics in the sample of interest to the research are
treated as approximations of the central tendencies, dispersions, and other parameters of the
population. As such, all conclusions drawn about the sample under study are generalized to the
population. In other words, the sample statistics (the sample mean), S (standard deviation),
and S2 (the variation in the sample)are used as estimates of the population parameters , ,
and 2.

Reasons for Sampling

The reasons for using a sample, rather than collecting data from the entire population, are self-
evident. In research investigations involving several hundreds and even thousands of elements, it
would be practically impossible to collect data from, or test, or examine every element. Even if it
were possible, it would be prohibitive in terms of time, cost, and other human resources. Study of
a sample rather than the entire population is also sometimes likely to produce more reliable
results. This is mostly because fatigue is reduced and fewer errors will therefore result in
collecting data, especially when a large number of elements is involved. In a few cases, it would
also be impossible to use the entire population to gain knowledge about, or test something.

Representativeness of Samples
The need for choosing the right sample for a research investigation cannot be overemphasized.
We know that rarely will the sample be the exact replica of the population from which it is
drawn. For instance, very few sample means ( ) are likely to be exactly equal to the population
means (). Nor is the standard deviation of the sample (S) likely to be the same as the standard
deviation of the population (). However, if we choose the sample in a scientific way, we can be
reasonably sure that the sample statistic (e.g., S, or S 2) is fairly close to the population
parameter (i.e., , , or 2). To put it differently, it is possible to choose the sample in such a way
that it is representative of the population. There is always the slight probability, however, that
sample values might fall outside the population parameters.

PROBABILITY AND NONPROBABILITY SAMPLING

There are two major types of sampling designs: probability and nonprobability sampling. In
probability sampling, the elements in the population have some known chance or probability of
being selected as sample subjects.

In nonprobability sampling, the elements do not have a known or predetermined chance of being
selected as subjects. Probability sampling designs are used when the representativeness of the
sample is of importance in the interests of wider generalizability. When time or other factors,
rather than generalizability, become critical, nonprobability sampling is generally used. Non-
probability sampling relies on the personal judgement of the researcher rather than on chance to
select sample elements. The researcher can arbitrarily or consciously decide what elements to
include in the sample. Non-probability samples may yield good estimates of the population
characteristics, but they do not allow for objective evaluation of the precision of the sample
results. Because there is no way of determining the probability of selecting any particular
element for inclusion in the sample, the estimates obtained are not statistically projectable to the
population.
In probability sampling, sampling units are selected by chance. It is possible to pre-specify every
potential sample of a given size that could be drawn from the population, as well as the
probability of selecting each sample. Every potential sample need not have the same probability
of selection, but it is possible to specify the probability of selecting any particular sample of a
given size. This requires not only a precise definition of the target population but also a general
specification of the sampling frame. Because sample elements are selected by chance, it is
possible to determine the precision of the sample estimates of the characteristics of interest