Introduction to Business Research

What is Business Research?

Business research is a systematic and organized effort to investigate a specific problem
encountered in the work environment, aiming to find solutions through thorough study and
analysis of situational factors.
Essentially, it's about making informed decisions by:
• Identifying the problem
• Recognizing relevant factors
• Gathering appropriate information
• Drawing correct conclusions
• Implementing solutions
Applied vs. Basic Research
Business research can be categorized into applied and basic research. The key differences
are outlined below:
Feature Applied Research Basic Research
Solving a specific problem faced by a Generating new knowledge and
Purpose manager in the work setting understanding

Findings may not be immediately

Findings are immediately applicable to applicable; contributes to general
Applicability the problem knowledge

Investigating ways to increase

employee retention at a specific Exploring the relationship between
Example company leadership styles and employee motivation
Applied Research
• Focuses on solving immediate problems or improving specific situations within an
organization.
• Driven by practical concerns and the need for actionable results.
Basic (or Fundamental) Research
• Aims to expand the understanding of a particular phenomenon or concept.
• Driven by curiosity and the desire to contribute to general knowledge.
Managers and Research
Why Managers Need to Know About Research
• Discrimination between good and poor studies: Enables managers to sift through
information and determine what is worth paying attention to.
• Taking calculated risks: Helps in understanding the different factors impinging on a
situation.
• Preventing possible vested interests: The manager can relate to the
recommendations made by the researcher, understanding why certain
recommendations are made and why others are not an option.
• Combining experience with scientific knowledge: Helps managers make
decisions on how to deal with situations at the workplace.
The Manager-Researcher Relationship
• Managers need to effectively interact with both internal and external researchers.
• They should understand the research process to make informed decisions based on
findings.
Internal vs. External Consultants/Researchers
Organizations may choose between internal or external consultants/researchers based on
their specific needs and circumstances. Here's a breakdown:
External
Feature Internal Consultants/Researchers Consultants/Researchers
* Better acceptance from staff * * Bring in a wealth of experience
Less time needed to understand from having worked with different
the organizational structure, organizations * Possess more
culture, and systems * Availability knowledge of current
to implement their sophisticated problem-solving
Advantages recommendations * Costs less models through their training

* Possibility of the internal team

falling into a stereotyped way of
looking at the organization and its * Considerable time to
problems * Possibility of certain understand the organization
organizational biases making the being researched * Additional
internal research team less costs because of fees and
Disadvantages objective expenses

When in-depth knowledge of the

organization is crucial and the When specialized expertise is
Ideal research requires long-term needed or an objective
Scenarios implementation perspective is required
The Hallmarks of Scientific Research
Scientific research must have the following 7 hallmarks:
1. Purposiveness: The research has a definite aim or purpose.
2. Rigor: Ensuring a sound theoretical base and methodological design.
3. Testability: Hypotheses can be tested using data.
4. Replicability: The results can be verified by replicating the study.
5. Precision and Confidence: Accuracy in the results and confidence in their
probability of being correct.
6. Objectivity: Drawing conclusions based on facts, not subjective values.
7. Generalizability: The scope of applicability of the research findings.
8. Parsimony: Simplicity in explaining the phenomenon or problems that occur, and in
generating solutions for the problems.
🪜 The Hypothetico-Deductive Method
The hypothetico-deductive method is a systematic approach to research involving seven
key steps:
 1. Identify a broad problem area: Recognize a general issue or area of concern.
2. Define the problem statement: Formulate a clear and specific research question.
3. Develop hypotheses: Create testable statements about the relationship between
variables.
4. Determine measures: Identify the variables to be measured.
5. Data collection: Gather data to test the hypotheses.
6. Data analysis: Analyze the data to determine if the hypotheses are supported.
7. Interpretation of data: Interpret the results and draw conclusions.
Alternative Approaches to Research
Besides the hypothetico-deductive method, other research approaches include:
• Positivism: Emphasizes objectivity and empirical evidence.
• Constructionism: Focuses on understanding how people construct meaning and
knowledge.
• Critical Realism: Acknowledges both objective reality and the subjective
interpretation of it.
• Pragmatism: Focuses on practical consequences and solutions.
Ethics in Business Research
• Ethical considerations are crucial in business research.
• Researchers must ensure the well-being and confidentiality of participants.
• Data should be collected and analyzed honestly and objectively.## The Essence
of Business Research
Business research is a systematic approach to problem-solving in the workplace. It
involves a series of steps designed to find answers to issues of concern to managers.
Key Aspects of Research
• Problem Identification: Recognizing and clearly defining problem areas within the
organization.
• Factor Determination: Identifying factors associated with the problem.
• Information Gathering: Collecting relevant data.
• Data Analysis: Analyzing data to develop explanations.
• Corrective Measures: Solving the problem through necessary actions.
Research is an organized, systematic, data-based, critical, objective inquiry or investigation
into a specific problem, undertaken with the purpose of finding answers or solutions to it.
The Role of Theory and Information
Theory and information are crucial in research. Theory can range from a simple idea to a
complex framework.
• Common Understanding of Theory: An idea or hunch.
• Practical Application: A concept, model, or framework used to solve problems.
• Scientific Theory: An explanation that holds in a wide range of settings and
generates testable predictions.
For example, expectancy theory suggests that people choose how to behave based on
expected outcomes.
Behavior∝Expected OutcomesBehavior∝Expected Outcomes
Research and the Manager
Managers face problems daily and must make informed decisions. Research helps in:
 • Understanding Problems: Grasping the nature of issues in accounting, finance,
management, and marketing.
• Generating Alternatives: Creating viable solutions for effective decision-making.
• Discriminating Studies: Distinguishing between good and bad research.
• Effective Interaction: Working efficiently with researchers and consultants.
Commonly Researched Areas in Business
Area Research Topics
Performance, absenteeism, job satisfaction, loyalty, organizational commitment,
Employee training, and retention.

Supervisory performance, leadership style, performance appraisal systems, HR

Management choices, strategy formulation, and information systems.

Consumer decision-making, customer satisfaction, market segmentation,

competitive advantage, product image, advertising, pricing, and new product
Marketing development.

Financial institutions' operations, financial ratios, mergers, acquisitions, stock

Finance exchange behavior, and the influence of psychology on financial markets.

Budget control systems, inventory costing methods, depreciation, transfer pricing,

cash recovery rates, taxation methods, auditing approaches, and sustainability
Accounting reporting.
Types of Business Research: Applied vs. Basic
Research can be:
• Applied Research: Solving current problems faced by managers.
• Example: A product not selling well, requiring immediate corrective action.
• Basic Research: Generating knowledge to understand how problems can be
solved.
• Example: A university professor studying factors contributing to
absenteeism.
Feature Applied Research Basic Research
Generate knowledge and
Purpose Solve specific, current problems understanding

Later application in organizational

Application Immediate application of results settings

Solve an existing problem in an

Goal organization Contribute to existing knowledge
Example of Applied Research: Coke and Pepsi turning to research to find the perfect
sweetener to save their cola businesses amid concerns about obesity and artificial
sweeteners.
Example of Basic Research: Sarah's PhD dissertation on job involvement, which later
helped her solve motivation issues in a Fortune 500 company.
Why Managers Need to Know About Research
Managers with research knowledge can better:
• Understand, predict, and control events within the organization.
• Identify problems before they escalate.
• Interact effectively with researchers.
• Evaluate the appropriateness of recommended solutions.
• Discriminate between scientific and non-scientific information in business journals.
The Manager and the Consultant/Researcher
Managers often hire consultants to solve complex problems. Important aspects of this
relationship include:
• Role Delineation: Clearly defining roles and constraints for researchers.
• Value Congruence: Ensuring alignment in value systems between management
and consultants.
• Information Exchange: Openly sharing information to build trust and rapport.
Knowing research methods helps managers:
1. Solve minor problems effectively.
2. Distinguish good from bad research.
3. Appreciate multiple influences on a situation.
4. Take calculated risks with known probabilities.
5. Prevent vested interests from influencing decisions.
6. Relate effectively to researchers and consultants.
7. Combine experience with scientific knowledge.
Hiring Researchers and Consultants
To ensure a successful collaboration, managers should:
1. Clearly define the roles and expectations of all parties involved.
2. Communicate the organization's philosophies and value systems, including any
constraints.
3. Establish a good rapport with the researchers and facilitate cooperation between
researchers and employees.
Internal vs. External Consultants/Researchers
Some organizations have their own consulting or research departments. Managers often
need to decide whether to use internal or external researchers. The decision should be
based on the strengths and weaknesses of each option and the specific needs of the
situation.
Internal Consultants/Researchers
Advantages
• Acceptance: Internal teams are more readily accepted by employees.
• Understanding: They quickly grasp the organization's structure, philosophy,
climate, and work systems.
 • Implementation: They are available to implement recommendations and evaluate
their effectiveness.
• Cost: Internal teams may be less expensive due to their familiarity with the
organization.
• Complexity: Ideal for problems of low complexity.
Disadvantages
• Stereotyping: Internal teams may have a stereotyped view of the organization and
its problems.
• Influence: They can be influenced by powerful coalitions to conceal or distort facts.
• Perception: They may not be perceived as experts by staff and management.
• Bias: Organizational biases may make findings less objective.
External Consultants/Researchers
Advantages
• Experience: They bring a wealth of experience from working with different
organizations facing similar problems.
• Knowledge: They have access to current, sophisticated problem-solving models
through training programs.
• Divergent and convergent thinking: They are able to ponder over several
alternative ways of looking at the problem.
Disadvantages
• Cost: Hiring an external team is usually expensive.
• Acceptance: They may not be readily accepted by employees and may face
resistance.
• Time: It takes time for them to understand the organization.
• Implementation costs: They charge additional fees for implementation and
evaluation assistance.
Making the Decision
Managers should weigh the pros and cons of each option.
• External researchers are advisable for complex problems, vested interests, or
when the organization's existence is at stake.
• Internal teams are better for simple problems, time-sensitive issues, or routine
policy establishment.
Knowledge About Research and Managerial Effectiveness
Knowledge of research:
• Increases a manager's awareness of internal and external factors.
• Facilitates effective interactions with consultants.
• Helps in understanding the nuances of the research process.
Even basic research knowledge enables managers to confidently engage with experts and
make informed decisions on implementing recommendations.
Ethics and Business Research
Ethics in business research refers to the expected norms of behavior during research.
Ethical conduct applies to:
• The organization sponsoring the research
• The researchers
 • The respondents providing data
Ethical behavior should be evident in:
• Data collection
• Data analysis
• Reporting
• Information dissemination
Confidentiality and subject treatment are guided by business ethics.
Types of Research
Applied Research
Research undertaken to solve a current problem faced by the manager in the work setting,
demanding a timely solution.
Basic Research
Research undertaken to generate a body of knowledge by trying to comprehend how
certain problems that occur in organizations can be solved.
Feature Applied Research Basic Research
Solve a specific, current Generate knowledge and
Purpose problem understanding

Immediate or short-term Long-term, contributing to the

Timeframe solutions knowledge base

Specific to the problem and Broadly applicable across

Applicability organization organizations
Learning Objectives Review
Here's a summary of the key learning objectives:
Objective Description
Research is the process of finding solutions to a problem through
thorough study and analysis. Business research is an organized,
Describe and define systematic, data-based, critical, objective inquiry undertaken to find
business research. answers or solutions.

Distinguish between
applied and basic Applied research solves current problems, while basic research
research. generates knowledge.

Explain why managers Research knowledge helps managers understand, predict, and
should know about control their environment and communicate effectively with
research. researchers.

Identify situations for

internal vs. external Managers should choose based on the problem's complexity,
research teams. potential biases, and the need for specialized expertise.
Objective Description
As a manager, you should use research to make objective decisions,
Discuss what research focusing on problem solutions and understanding the
means to you. recommendations.

Demonstrate awareness
of the role of ethics in Ethical conduct is essential throughout the research process, from
business research. data collection to dissemination.
Hallmarks of Scientific Research
Many organizations face difficulties due to poor decisions based
on hunches or insufficient information, leading to the failure of implemented plans.
Scientific research is characterized by several key hallmarks:
1. Purposiveness
2. Rigor
3. Testability
4. Replicability
5. Precision and Confidence
6. Objectivity
7. Generalizability
8. Parsimony
Let's examine these characteristics through the example of a manager investigating how to
increase employee commitment to the organization.
Purposiveness
Research should start with a definite aim or purpose. In the example, the manager's
purpose is to increase employee commitment, which can lead to benefits like lower
turnover, reduced absenteeism, and increased performance.
Rigor
Rigor involves a good theoretical base and a sound methodological design, reflecting
carefulness, scrupulousness, and exactitude in research investigations. An unscientific
approach lacks rigor.
Rigor connotes carefulness, scrupulousness, and the degree of exactitude in research
investigations.
Example of lacking rigor: A manager asks 10-12 employees for suggestions on increasing
commitment and draws conclusions based solely on their responses. This approach lacks
rigor because:
• The conclusions may not represent the entire workforce.
• The questions could be biased.
• Other important influences on organizational commitment may be missed.
Rigorous research requires a good theoretical foundation and a carefully thought-out
methodology to collect the right information from an appropriate sample with minimal
bias.
Testability
Testability applies to the hypotheses of a study, which are tentative, testable statements
predicting what you expect to find in your empirical data. Hypotheses are derived from
theory.
A scientific hypothesis must be testable.
Example: A manager hypothesizes that employees with greater opportunities for
participation in decision-making will have a higher level of commitment. This can be tested
through correlation analysis.
Nontestable hypothesis example: "God created the Earth."
Replicability
Replicability refers to the ability to duplicate research findings in another study using the
same methods. If similar findings emerge, it increases confidence in the results.
Replication demonstrates that our hypotheses have not been supported merely by chance,
but are reflective of the true state of affairs in the population.
Replicability is facilitated by a detailed description of the study's design details, such as
sampling and data collection methods.
Precision and Confidence
Precision refers to the closeness of the findings to reality based on a sample.
Confidence refers to the probability that our estimations are correct.
In social science research, a 95% confidence level, implying a 5% probability of the
findings being incorrect, is conventionally accepted.
Example of Precision: Estimating lost production days due to absenteeism as 30-40 days
when the actual figure is 35 is more precise than estimating it as 20-50 days.
Objectivity
Objectivity means that conclusions should be based on facts derived from data
analysis, not subjective or emotional values.
Example: If research does not support the hypothesis that greater participation in
decision-making increases organizational commitment, a researcher should not argue
otherwise based on their subjective opinion.
Generalizability
Generalizability refers to the scope of applicability of research findings from one
organizational setting to other settings.
The wider the range of applicability of the solutions generated by research, the more useful
the research is to the users.
Findings that participation in decision-making enhances organizational commitment
across various organizations have high generalizability.
Parsimony
Parsimony favors simplicity in explaining phenomena and generating solutions, rather
than complex frameworks.
Example: Identifying two or three specific variables that can raise employee organizational
commitment by 45% is more useful than recommending ten different variables to increase
commitment by 48%.
The Hypothetico-Deductive Method
The hypothetico-deductive method is a logical, organized, and rigorous scientific method
used to find solutions to problems, especially in the natural sciences.
The Seven-Step Process
1. Identify a Broad Problem Area
2. Define the Problem Statement
3. Develop Hypotheses
4. Determine Measures
5. Data Collection
6. Data Analysis
7. Interpretation of Data
1. Identify a Broad Problem Area
Issues such as a drop in sales or employee disinterest can initiate a research project.
2. Define the Problem Statement
A problem statement that includes the general objective and research questions should be
developed. Preliminary information gathering helps narrow the problem area.
3. Develop Hypotheses
Variables are examined to explain the problem and how it can be solved. Hypotheses are
educated conjectures based on the theorized network of associations among the
variables.
Requirements for a scientific hypothesis:
• Testable
• Falsifiable
According to Karl Popper, it is important because a hypothesis cannot be confirmed; there
is always a possibility that future research will show that it is false.
4. Determine Measures
Variables in the theoretical framework must be measured to test hypotheses.
5. Data Collection
Data is obtained for each variable in the hypothesis to form the basis for data analysis.
6. Data Analysis
The data gathered are statistically analyzed to see if the hypotheses have been supported.
7. Interpretation of Data
The meaning of the data analysis results is interpreted to decide whether the hypotheses
are supported or not.
Example: Application in Organizations
Scenario: Sara Foster, an IT Director, observes that the newly installed Management
Information System (MIS) is underused by middle managers.
Step Action
1. Problem Area Underutilization of the newly installed MIS by middle managers.

2. Problem To what extent do knowledge-related factors and openness to

Statement change affect the use of the MIS by middle managers?

Knowledge of the usefulness of the MIS would help managers to put

3. Hypothesizing it to greater use.
Step Action
Questionnaire measuring factors influencing MIS use, such as
4. Measures & knowledge of the MIS, access to information, openness to change,
Data and usage frequency.

Analyzing data to see what factors prevent managers from using the
5. Data Analysis system.

Many managers do not use the MIS because they do not believe it
would enhance job performance or because they do not know how
6. Interpretation to use it effectively.

7. Corrective Organizing seminars for training managers on the use of the MIS and
Actions illustrating the advantages of using the MIS.
Review of the Hypothetico-Deductive Method
The scientific method uses deductive reasoning to test a theory. Deductive reasoning
works from the general to the specific.
Inductive reasoning, in contrast, works from the specific to the general, observing
specific phenomena to arrive at general conclusions.
Observing 3, 10, 100, or even 10 000 white swans does not justify the conclusion that all
swans are white because there is always a possibility that the next swan we observe will be
black.
Both inductive and deductive processes are often used sequentially in research.
Example:
1. A manager notices that frequent price promotions have a negative effect on product
sales. (Observation)
2. Interviews with customers indicate that frequent price promotions negatively affect
the reputation or image of the product. (Induction)
3. The manager hypothesizes that frequent price promotions negatively affect the
reputation of the product and hence product sales.
4. The manager may verify this hypothesis by means of deduction.
In sum, theories based on deduction and induction help us understand, explain, and/or
predict business phenomena.
The Hypothetico-Deductive Method
The hypothetico-deductive method starts with a theoretical framework and involves
formulating hypotheses, then logically deducing conclusions from study results.
Another example of the hypothetico-deductive research process:
1. A sales manager notices customer dissatisfaction and an increase in complaints.
2. This observation leads to preliminary data gathering through informal conversations
with customers and salespeople.
3. The manager identifies a problem: delays affecting customer satisfaction.
4. A theoretical framework is developed, considering factors such as factory delays,
missed delivery dates, and unfulfilled promises.
 5. Hypotheses are generated and tested.
6. Concepts are operationally defined for measurement.
7. A research design is created to collect and analyze data to answer the problem.
Deduction: Drawing a seemingly conclusive inference from logical analysis.
Deduction provides the genesis for the hypothetico-deductive method in scientific
research.
Obstacles to Scientific Research in Management
In management and behavioral areas, achieving 100% scientific accuracy is challenging
due to:
• Difficulties in measuring subjective constructs like feelings, emotions, attitudes,
and perceptions.
• Challenges in obtaining a representative sample, limiting the generalizability of
findings.
While fully meeting all hallmarks of science may not always be possible, research should
aim for:
• Purposiveness
• Rigor
• Maximum possible testability
• Replicability
• Generalizability
• Objectivity
• Parsimony
• Precision and confidence
Alternative Approaches to Research
All research is based on beliefs about the world around us (ontology) and what we can
possibly discover by research. Disagreements exist regarding the nature of knowledge
(epistemology).
Positivism
Positivism: Views science as the way to get to the objective truth to understand the world
well enough so that we are able to predict and control it.
• The world operates by cause-and-effect laws.
• Focuses on rigor, replicability, reliability, and generalizability.
• Uses deductive reasoning to test theories with predetermined designs and objective
measures.
• Employs experiments to test cause-and-effect relationships.
Constructionism
Constructionism: Criticizes the positivist belief that there is an objective truth, instead
holding the view that the world is fundamentally mentally constructed.
• Aims to understand the rules people use to make sense of the world.
• Emphasizes how people construct knowledge through interactions and context.
• Uses qualitative methods like focus groups and unstructured interviews.
• Focuses on understanding specific cases rather than generalization.
Critical Realism
Critical Realism: A combination of the belief in an external reality with the rejection of the
claim that this external reality can be objectively measured; observations will always be
subject to interpretation.
• Acknowledges an external reality but recognizes the limitations of objective
measurement.
• Believes measures of phenomena are subjective and data collection is flawed.
• Advocates for triangulation across multiple methods, observations, and researchers
to reduce bias.
Pragmatism
Pragmatism: A perspective that doesn't take a particular position on what makes good
research.
• Research on both objective and subjective phenomena can produce useful
knowledge.
• Focuses on practical, applied research to solve problems.
• Endorses eclecticism and pluralism, viewing different perspectives as helpful.
• Views current truth as tentative and changing.
• Stresses the relationship between theory and practice, where theory informs
practice.
• Values research based on its practical relevance.
Broad Problem Area
A problem is any situation where a gap exists between an actual and a desired ideal state.
It doesn't necessarily mean something is seriously wrong. Problems need to be
transformed into a researchable topic for investigation.
Examples of Problems:

Long and frequent delays lead to frustration, potentially

causing switching behavior, negative word-of-mouth, and
Airline Passenger Frustration complaints.

Staff Turnover Staff turnover is higher than anticipated.

Assessment Instrument The current instrument for assessing potential employees

Imperfection for management positions is imperfect.

Minority Group Career Minority group members in organizations are not

Advancement advancing in their careers.

Newly Installed Information The newly installed information system is not being used
System Not Being Used by the managers for whom it was primarily designed.
 The introduction of flexible work hours has created more
Flexible Work Hours problems than it has solved.

Young workers in the organization show low levels of

Young Worker Commitment commitment to the organization.
It is crucial to address the real problem and not just the symptoms.
5 Whys Technique: An approach to get to the root cause of a problem by repeatedly asking
"Why?" until the most basic cause is identified.
Bringing Clarity and Focus to the Problem
1. Make the problem more specific and precise.
2. Set clear boundaries.
3. Select a perspective for investigation.
To identify key terms, look for the subjects, verbs, and objects in the problem statement.
Precise definitions of key terms allow access to relevant academic literature.
Preliminary Research
Helps to:
• Gain a better understanding of the problem.
• Narrow the problem down to a researchable topic.
• Answer questions like:
• What is the problem?
• Why does the problem exist?
• Is the problem important?
• What are the benefits of solving the problem?
Preliminary research gathers information on:
1. The organization and its environment (contextual factors).
2. The topic of interest.
Introduction to Research Methods
When gathering information to address a problem, it is essential to consider contextual
factors that may impact the issue. These factors can include:
• The origin and history of the company
• Size in terms of employees, assets, or both
• Charter purpose and ideology
• Location, regional, national, or other
• Resources, human and others
• Interdependent relationships with other institutions and the external environment
• Financial position during the previous five to ten years, and relevant financial data
• Information on structural factors, such as roles and positions in the organization
and number of employees at each job level
• Information on the management philosophy
Data Collection Methods
Data can be collected through various methods, including:
• Primary data: data gathered first-hand for the specific purpose of the study
 • Secondary data: data that have been collected by others for another purpose than
the purpose of the current study
Secondary data are data that have been collected by others for another purpose than the
purpose of the current study. Examples of secondary sources of data include statistical
bulletins, government publications, published or unpublished information available from
either within or outside the organization, company websites, and the Internet.
Evaluating Secondary Data
When using secondary data, it is crucial to evaluate its timeliness, accuracy, relevance,
and cost. The following table outlines the key criteria for evaluating secondary data:
Criteria Description
Timeliness When were the data collected?

What was the purpose of presenting the data? Who collected the data? How
Accuracy were the data collected?

Relevance Is the data relevant to the research objective?

Cost What are the costs associated with collecting and using the data?
Defining the Problem Statement
A problem statement should include both a statement of the research objective and
the research question. A good problem statement should be:
• Relevant: meaningful from a managerial or academic perspective
• Feasible: able to be answered within the restrictions of the research project
• Interesting: of genuine interest to the researcher
Types of Research Questions
There are three basic types of research questions:
• Exploratory research questions: developed when not much is known about a
particular phenomenon
• Descriptive research questions: aim to obtain data that describes the topic of
interest
• Causal research questions: test whether or not one variable causes another
variable to change
The following table outlines examples of each type of research question:

Type Example

What are the work ethic values of employees in a multinational corporation's

Exploratory subsidiary in India?
Type Example

What percent of the population likes Coca-Cola better than Pepsi in a double-
Descriptive blind test?

Causal What is the effect of a reward system on productivity?

The Research Proposal
A research proposal should include:
• A working title
• Background of the study
• The problem statement
• The scope of the study
• The relevance of the study
• The research design
• Time frame of the study
• The budget
• Selected bibliography
A well-structured research proposal ensures that there are no misunderstandings or
frustrations later for either party involved in the research study.## Introduction to
Research Methods The cost of employee turnover to firms has been estimated to be up
to 150% of the employee's remuneration package. This highlights the importance of
understanding the reasons behind employee turnover and developing strategies to reduce
it.
Defining a Problem
A problem is any situation where a gap exists between an actual and a desired ideal state.
A problem statement is a clear and concise description of the problem, including the
research objective and research question.
To develop a good problem statement, it is essential to:
• Identify the broad problem area
• Narrow down the problem into a feasible topic for research
• Define the research objective and research question
Research Design
The research design involves:
• Data collection: gathering information through interviews, surveys, or other
methods
• Data analysis: analyzing the collected data to answer the research question
• Research methodology: the overall approach to the research study
The following table outlines the research design process:
Step Description
1 Define the research problem

2 Conduct preliminary research

3 Develop a research proposal

4 Collect and analyze data

5 Draw conclusions and make recommendations

Literature Review
A literature review is a critical evaluation of the existing research on a topic. It helps to:
• Identify key concepts and theories
• Understand the research methodology used in previous studies
• Develop a theoretical framework for the research study
The following table outlines the sources of information for a literature review:
Source Description
Academic journals Peer-reviewed articles on the topic

Books In-depth analysis of the topic

Conference proceedings Latest research on the topic

Unpublished manuscripts Recent research that has not been published

Internet Online sources, including articles, reports, and websites

Writing a Literature Review
To write a literature review, follow these steps:
• Identify the research question and objective
• Conduct a thorough search of the literature
• Evaluate the quality and relevance of the sources
• Organize the information in a logical and coherent manner
Ethical Considerations
When conducting research, it is essential to consider the ethical implications. This
includes:
• Informed consent: obtaining permission from participants
• Confidentiality: protecting the privacy of participants
• Avoiding harm: ensuring that the research does not cause harm to participants
The following table outlines the ethical considerations in research:
Principle Description

Respect for persons Protecting the rights and dignity of participants

Beneficence Ensuring that the research benefits society

Non-maleficence Avoiding harm to participants

Justice Ensuring that the research is fair and equitable

Finding Relevant Academic Literature
• Google Scholar: A search engine that indexes academic literature, including peer-
reviewed papers, theses, books, abstracts, and articles from academic publishers,
universities, and scholarly organizations.
Traditional vs. Modern Literature Searches
• Traditional Method: Manually going through bibliographical indexes.
• Modern Method: Using computer online systems in libraries to locate published
information.
Advantages of Computerized Databases
• Saves time.
• Comprehensive listing and review of references.
• Relatively inexpensive access.
Types of Electronic Resources in Libraries
• Electronic Journals: Journals published or available online.
• Full-Text Databases: Databases providing the full text of articles.
• Bibliographic Databases: Display bibliographic citations (author, title, source, year,
volume, page numbers).
• Abstract Databases: Provide abstracts or summaries of articles.
Evaluating Literature
Selecting Relevant Books and Articles
• Initial Screening: Titles indicate pertinence.
• Abstracts: Provide an overview of the study's purpose, strategy, findings, and
conclusions.
• Introductions: Overview of the problem and research objectives.
• Table of Contents/First Chapter: Help assess the relevance of a book.
Key Studies
• A good literature review includes references to key studies, even if they are older.
• Incorporate recent work that builds on a broader stream of literature.
Assessing the Quality of Recent Research
• Is the research question clear?
• Is the relevance of the question transparent?
• Does the study build on previous research?
 • Will the study contribute to the field?
• Is there a relevant theory guiding the research?
• Are the methods clearly explained and justified?
• Is the sample appropriate?
• Are the research design and questionnaire appropriate?
• Are the measures valid and reliable?
• Are appropriate techniques used?
• Do the conclusions result from the findings?
• Do the conclusions answer the main research question?
• Has the author considered the limitations?
• Are the limitations presented in the article?
Journal Quality Indicators
• Peer Review: Articles undergo a review process before publication.
• Impact Factor: The average number of citations in a year for papers published in the
journal during a given period.
Criteria for Assessing Value
• Relevance of issues addressed.
• Importance in terms of citations.
• Year of publication.
• Overall quality.
Documenting the Literature Review
Purpose
• Build on the work of others.
• Make informed decisions during research.
• Identify relevant themes.
• Documents significant findings, frameworks, and instruments.
Importance
• Convinces the reader of the researcher's knowledge and preliminary work.
Synthesis vs. Summary
• Synthesize relevant research on the topic.
• Combine elements to form a new conclusion.
Referencing Styles
• Publication Manual of the American Psychological Association (APA).
• The Chicago Manual of Style.
• Turabian's Manual for Writers.
Example of a Literature Review
• Subject: Organizational Effectiveness (OE).
• Highlights: Lack of a good conceptual framework.
• Summarizes: Work done on OE, paving the way for a more viable model.
Ethical Issues
Pitfalls to Avoid
1. Misrepresenting Work: Purposely misrepresenting other authors' viewpoints,
ideas, models, findings, conclusions, or interpretations.
 2. Plagiarism: Using another's original words, arguments, or ideas as your own, even if
done in good faith, out of carelessness, or out of ignorance.
Both are considered fraud.
Consequences of Plagiarism
• Makes it difficult to verify claims about other authors.
• Obscures your position in a scientific debate.
Common Forms of Plagiarism
Category Type Description
Sources not The Ghost
cited Writer Turns in another's work, word-for-word, as his or her own.

Copies significant portions of text straight from a single

The Photocopy source, without alteration.

Copies from several different sources, tweaking sentences to

The Potluck make them fit together while retaining most of the original
Paper phrasing.

The Poor Retains the essential content but alters the paper's
Disguise appearance slightly by changing key words and phrases.

The Labor of Paraphrases most of the paper from other sources instead of
Laziness doing original work.

The Self-Stealer Borrows generously from his or her previous work.

Sources cited The Forgotten Mentions an author's name but neglects to include specific
(plagiarized) Footnote information on the location of the material.

Provides inaccurate information regarding the sources,

The Misinformer making it impossible to find them.

The Too-Perfect Properly cites a source but neglects to put in quotation marks
Paraphrase text that has been copied word-for-word, or close to it.

The Resourceful Properly cites all sources, paraphrasing and using quotations
Citer appropriately, but the paper contains almost no original work.

Properly quotes and cites sources in some places but

paraphrases other arguments from those sources without
The Perfect citation, passing off the paraphrased material as his or her
Crime own analysis.
Avoiding Plagiarism
 • Observe rules for referencing sources.
• Examine plagiarism guidelines from your university.
Summary
• A literature review is the selection and effective evaluation of available documents
on a topic.
• It ensures that research is positioned relative to existing knowledge.
• Documenting the literature review ethically is crucial.
Online Resources for Business Research
Databases
• ABI/INFORM Global and ABI/INFORM: Major business journals from 1971 onward.
• Business Periodicals Index (BPI): Index of business and management periodicals.
• Dow Jones Factiva: Business news and information.
• EconLit: Index of journal articles, books, working papers, and dissertations.
• International Bibliography of the Social Sciences (IBSS): Online resource for
social science research.
• PsycINFO: Abstract database of psychological literature.
• RePEc: Decentralized database of working papers and journal articles in
economics.
• SSRN: Rapid dissemination of social science research.
• Web of Stories: Video archive of interviews with scientists and writers.
• World Development Indicators (World Bank): Statistical data on economic and
social development.
Websites
• Bureau of Census: http://www.census.gov/
• Business Information on the Internet: http://www.rba.co.uk/sources/
• Businessweek Online: http://www.businessweek.com/
• China & World Economy: http://www.iwep.org.cn/wec/
• Company Annual Reports: http://www.annualreports.com
• Corporate Information: http://www.corporateinformation.com/
• Economic Journals on the
Web: http://www.oswego.edu/~economic/journals.htm
• Euromoney Publications: http://www.euromoney.com/
• European Business Directory: http://www.europages.com/homeen.html
• Eurostat: http://ec.europa.eu/eurostat
• Fortune: http://www.fortune.com/
• Forbes Magazine: http://www.forbes.com/forbes/
• FT.com TotalSearch: http://news.ft.com/home/europe
• globalEDGE: http://globaledge.msu.edu/ibrd/ibrd.asp
• I.O.M.A.: www.ioma.com/ioma/direct.html
• Kompass: http://www.kompass.com/
• List of Economics
Journals: http://en.wikipedia.org/wiki/List_of_economics_journals
• NASDAQ Stock Market: http://www.nasdaq.com
• New York Stock Exchange: http://www.nyse.com
 • STATUSA: http://www.usa.gov/Topics/ReferenceShelf/Data.shtml
• Wall Street Executive Library: http://www.executivelibrary.com/
• Wall Street Journal: http://online.wsj.com/public/us
Accounting
• ARN: http://www.ssrn.com/update/arn/
• Accounting terminology guide: http://www.nysscpa.org/glossary
• AuditNet: http://www.auditnet.org/
• Internal Auditing World Wide Web (IAWWW): http://www.bitwise.net/iawww/
Management
• Academy of Management: http://www.aomonline.org
• Harvard Business Review: https://hbr.org/
• Society for Human Resource Management: www.shrm.org
• Sloan Management Review: http://sloanreview.mit.edu/
Financial Economics
• Behavioral Finance: http://www.behaviouralfinance.net/
• CNN financial network: http://money.cnn.com
• The Financial Economic Network (FEN): http://www.ssrn.com/update/fen/
• FINWeb: http://finweb.com/
• MFFAIS: http://www.mffais.com/
• Morningstar, Inc.: http://www.morningstar.com/
• Standard & Poor's Ratings
Services: http://www.standardandpoors.com/en_US/web/guest/home
Marketing
• The Marketing Science Institute: http://www.msi.org/
• Links to academic marketing
journals: http://www.sfu.ca/~mvolker/biz/journal1.htm
• KnowThis: http://www.knowthis.com/
Bibliographical Databases
These indexes help in compiling a comprehensive bibliography on business topics.
1. Bibliographic Index
Research Resources
Here are some research resources:
1. Bibliographies
2. Business Books in Print: Indexes books in print in finance, business, and
economics by author, title, and business subject.
3. Business Periodicals Index: A cumulative subject index covering 270 business
periodicals.
4. Management Information Guide: Offers bibliographic references in many business
areas.
5. Human Resource Management Abstracts: An index of articles on the
management of people and organizational behavior.
6. Psychological Abstracts: Summarizes psychology literature from journals, reports,
monographs, and other scientific documents.
 7. Public Affairs Information Service Bulletin: A selective subject index of books,
yearbooks, directories, government documents, pamphlets, and over a thousand
periodicals related to national and international economic and public affairs.
8. Work Related Abstracts: Contains abstracts of articles, dissertations, and books
related to labor, personnel, and organizational behavior.
APA Referencing
A bibliography is a listing of work relevant to the main topic of research interest, arranged
alphabetically by the authors' last names. A reference list is a subset of the bibliography,
including details of all citations used in the literature review and elsewhere in the paper,
arranged alphabetically by the authors' last names. Citations credit authors and help
readers find the cited works.
Referencing Styles
At least three modes of referencing are followed in business research:
1. Publication Manual of the American Psychological Association (APA) (2012)
2. The Chicago Manual of Style (2010)
3. Turabian’s Manual for Writers (2013)
The APA format is commonly used for referencing by many journals in the management
area.
APA Format Examples
Here are some specimen formats for citing different types of references:
Reference Type Example
Book (Single Leshin, C.B. (1997). Management on the World Wide Web. Englewood Cliffs,
Author) NJ: Prentice Hall.

Book (Multiple Diener, E., Lucas, R., Schimmack, U., & Helliwell, J.F. (2009). Wellbeing for
Authors) public policy. New York: Oxford University Press.

Nichols, P. (1998). A new look at Home Services [Review of the book Providing
Book Review Home Services to the Elderly by Girch, S.]. Family Review Bulletin, 45, 1213.

Riley, T., & Brecht, M.L. (1998). The success of the mentoring process. In R.
Chapter in Williams (Ed.), Mentoring and career success, pp. 129-150. New York: Wilson
Edited Book Press.

Sanderson, R., Albritton B., Schwemmer R., & Van de Sompel, H. (2011).
Shared canvas: A collaborative model for medieval manuscript layout
Conference dissemination. Proceedings of the Eleventh ACM/IEEE Joint Conference on
Proceedings Digital Libraries, pp. 175-184. Ottawa, Ontario.

Hassan, M. (2014). The Lives of micromarketers: Why do some differentiate

Doctoral themselves from their competitors more than others? Unpublished doctoral
Dissertation dissertation, University of Cambridge.
Reference Type Example
Pennathur, A., Leong, F.T., & Schuster, K. (Eds.) (1998). Style and substance of
Edited Book thinking. New York: Publishers Paradise.

Edited Book Christiansen, S. (Ed.). (2007). Offenders memories of violent crimes. doi:
(Digital, DOI) 10.1002/7980470713082.

Jeanquart, S., & Peluchette, J. (1997). Diversity in the workforce and

management models. Journal of Social Work Studies, 43(3), 72-85.
Deffenbacher, J.L., Oetting, E.R., Lynch, R.S., & Morris, C.D. (1996). The
expression of anger and its consequences. Behavior Research and Therapy,
Journal Article 34, 575-590.

Van Herpen, E., Pieters, R., & Zeelenberg, M. (2009). When demand
Journal Article accelerates demand: Trailing the bandwagon, Journal of Consumer
(In Press) Psychology.

López-Vicente, M., Sunyer, J., Forns, J., Torrent, M., & Julvez, J. (2014).
Continuous Performance Test II outcomes in 11-year old children with early
Journal Article ADHD symptoms: A longitudinal study. Neuropsychology, 28, 202-
(DOI) 211. http://dx.doi.org/10.1037/neu0000048

Multiple Books Roy, A. (1998a). Chaos theory. New York: Macmillan Publishing Enterprises.
(Same Author) Roy, A. (1998b). Classic chaos. San Francisco, CA: Jossey-Bass.

Newspaper QE faces challenge in Europe’s junk bond market (2015, March 27). Financial
Article Times, p. 22.

Conference Bajaj, L.S. (1996, March 13). Practical tips for efficient work management.
Paper Paper presented at the annual meeting of Entrepreneurs, San Jose, CA.

Unpublished Pringle, P.S. (1991). Training and development in the 90s. Unpublished
Manuscript manuscript, Southern Illinois University, Diamondale, IL.
Non-Print
Media Example
Skyscape. (2010). Skyscape Medical Resources (Version 1.9.11) [Mobile
App application software]. Retrieved from http://itunes.apple.com/

Balakrishnan, R. (2006, March 25-26). Why arent we using 3d user interfaces,

Conference and will we ever? Paper presented at the IEEE Symposium on 3D User
Proceeding Interfaces. doi:10.1109/VR.2006.148
Non-Print
Media Example
Motivation. (n.d.). In Merriam-Websters online dictionary (12th ed.). Retrieved
Dictionary from http://www.merriam-webster.com/dictionary/motivation

Diener, E., Lucas, R., Schimmack, U., & Helliwell, J.F. (2009). Wellbeing for
public policy (New York: Oxford University Press). Retrieved
Ebook from http://books.google.com

Campbell, A. (2007). Emotional intelligence, coping and psychological

distress: A partial least squares approach to developing a predictive
Electronic model. EJournal of Applied Psychology, 3(2), 39-54. Retrieved
Journal from http://ojs.lib.swin.edu.au/index.php/ejap/article/view/91/117

Online Davitz, J.R. (2009, February 21). How medieval and renaissance nobles were
Forum different from each other [Msg 131]. Message posted
Message to http://groups.yahoo.com/group/Medieval\_Saints/message/131

Frier, S. (2015, March 19). Facebook shares hit record amid optimism for ads
Online business. Retrieved from http://www.bloomberg.com/news/articles/2015-03-
Document 19/facebook-shares-hit-record-amid-optimism-for-ads-business

Online
Document GVUs 18th WWW customer survey. (n.d.). Retrieved 2009, March 24,
(No Date) from http://www.bb.gotech.edu/gvu/usersurveys/survey2008-10/

Raz, G. (TED Radio Hour Host). (2015, February 27). Success (R) [Audio
podcast]. Retrieved
Podcast from http://podbay.fm/show/523121474/e/1425015000?autostart=1

Philips UK. (2009, March 23). U.S. Department of Energy honors Philips for
Report significant advancement in LED lighting. Retrieved March 2009, 24,
(Website) from http://www.philips.co.uk/index.page

Streaming How2stats (2011, September 15). Cronbachs Alpha SPSS (part 1) [Video file].
Video Retrieved from https://www.youtube.com/watch?v=2gHvHm2SE5s

TIAS (@TIASNews). Cooperative banks make the financial system more stable,
says Professor Hans Groeneveld, buff.ly/1BwXNhR. 13 March 2015, 19.24
Tweet p.m. Tweet.

Game theory (n.d.). In Wikipedia. Retrieved 2015, November 6,

Wikipedia from http://en.wikipedia.org/wiki/Game\_theory
 Referencing and Quotation
Cite all references in the body of the paper using the author-year method of citation.
Author-Year Citation Examples
1. Todd (2015) found the more motivated students are . . .
2. More recent studies of transformational leadership (Hunt, 2014; Osborn, 2013)
focus on . . .
3. In a follow-up study from 2013, Green demonstrates . . .
Rules for Author-Year Citations
1. Within the same paragraph, you need not include the year after the first citation so
long as the study cannot be confused with other studies cited in the article.
• Lindgren (2009, p. 24) defines satisfaction as the customers fulfillment
response. It is the judgment that a . . . service . . . provides a pleasurable level
of consumption related fulfillment. Lindgren finds that . . .
2. When a work is authored by two individuals, always cite both names every time the
reference occurs in the text.
• As Tucker and Snell (2014) pointed out . . .
• As has been pointed out (Tucker & Snell, 2014), . . .
3. When a work has more than two authors but fewer than six authors, cite all authors
the first time the reference occurs, and subsequently include only the surname of
the first author followed by et al.
• Bougie, Pieters, and Zeelenberg (2003) found . . . (first citation)
• Bougie et al. (2003) found . . . (subsequent citations)
4. When a work is authored by six or more individuals, cite only the surname of the first
author followed by et al. and the year for the first and subsequent citations. Join the
names in a multiple-author citation in running text by the word and. In parenthetical
material, in tables, and in the reference list, join the names by an ampersand (&).
5. When a work has no author, cite in text the first two or three words of the article title.
Use double quotation marks around the title of the article.
• There are limits to how risky investors want to get (QE faces challenge, 2015),
...
6. When a work’s author is designated as Anonymous, cite in text the word Anonymous
followed by a comma and the date: (Anonymous, 2014). In the reference list, an
anonymous work is alphabetized by the word Anonymous.
7. When the same author has several works published in the same year, cite them in
the same order as they occur in the reference list, with the in press citations coming
last.
• Research on Corporate Social Responsibility (Long, 1999, 2003, in press)
indicates . . .
8. When more than one author has to be cited in the text, these should be in the
alphabetical order of the first authors surname, and the citations should be
separated by semicolons.
• In the job design literature (Aldag & Brief, 2007; Alderfer, 2009; Beatty, 1982;
Jeanquart, 1999), . . .
 9. Personal communication through letters, memos, telephone conversations, and the
like, should be cited in the text only and not included in the reference list since these
are not retrievable data.
• T. Peters (personal communication, June 15, 2013) feels . . .
Quotations in Text
Quotations should be given exactly as they appear in the source. The original wording,
punctuation, spelling, and italics must be preserved even if they are erroneous. The citation
of the source of a direct quotation should always include the page number(s) as well as the
reference. Use double quotation marks for quotations in text. Use single quotation marks
to identify the material that was enclosed in double quotation marks in the original source.
If you want to emphasize certain words in a quotation, underline them and immediately
after the underlined words, insert within brackets the words: italics added. Use three
ellipsis points (. . .) to indicate that you have omitted material from the original source.
If the quotation is of more than 40 words, set it in a freestanding style starting on a new line
and indenting the left margin a further five spaces. Type the entire quotation double spaced
on the new margin, indenting the first line of paragraphs five spaces from the new margin.
For instance, Weiner (1998, p. 121) argues that:
Following the outcome of an event, there is initially a general positive or negative reaction (a
primitive emotion) based on the perceived success or failure of that outcome (the primary
appraisal). (. . .) Following the appraisal of the outcome, a causal ascription will be sought if
that outcome was unexpected and/or important. A different set of emotions is then
generated by the chosen attributions.
If you intend publishing an article in which you have quoted extensively from a copyrighted
work, it is important that you seek written permission from the owner of the copyright.
Make sure that you also footnote the permission obtained with respect to the quoted
material. Failure to do so may result in unpleasant consequences, including legal action
taken through copyright protection laws.
Theoretical Framework and Hypothesis Development
Learning Objectives
1. Discuss the need for a theoretical framework in deductive research.
2. Describe four main types of variables and identify and label variables associated
with any given situation.
3. Develop a theoretical framework that includes all the relevant components.
4. Develop a set of hypotheses to be tested.
5. Demonstrate awareness of the role of the manager in the development of a
theoretical framework.
Introduction
After a critical review of the literature, you may be ready to develop a theoretical
framework. A theoretical framework is the foundation of hypothetico-deductive
research as it is the basis of the hypotheses that you will develop. The development of a
theoretical framework is crucial in deductive, theory-testing, causal research (but not in
exploratory or descriptive research where one does not develop a theoretical framework to
develop and test hypotheses).
The Need for a 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 of why you believe that
these variables are associated with each other (a theory). Both the model and the theory
flow logically from the documentation of previous research in the problem area.
The process of building a theoretical framework includes:
1. Introducing definitions of the concepts or variables in your model.
2. Developing a conceptual model that provides a descriptive representation of your
theory.
3. Coming up with a theory that provides an explanation for relationships between the
variables in your model.
From the theoretical framework, then, testable hypotheses can be developed to examine
whether your theory is valid or not. The hypothesized relationships can thereafter be tested
through appropriate statistical analyses. Hence, the entire deductive research project rests
on the basis of the theoretical framework. Even if testable hypotheses are not necessarily
generated (as in some applied research projects), developing a good theoretical framework
is central to examining the problem under investigation.
↔️ Variables
A variable is anything that can take on differing or varying values. The values can differ at
various times for the same object or person, or at the same time for different objects or
persons.
Examples of variables are production units, absenteeism, and motivation.
• Production units: One worker in the manufacturing department may produce one
widget per minute, a second might produce two per minute, a third might produce
five per minute.
• Absenteeism: Today, three members in the sales department may be absent;
tomorrow, six members may not show up for work; the day after, there may be no
one absent.
• Motivation: The levels of motivation of members to learn in the class or in a work
team might take on varying values ranging from very low to very high.
Four main types of variables:
1. The dependent variable (also known as the criterion variable).
2. The independent variable (also known as the predictor variable).
3. The moderating variable.
4. The mediating variable.
Each of these variables can be discrete (e.g., male/female) or continuous (e.g., the age of
an individual).
Dependent Variable
The dependent variable is the variable of primary interest to the researcher. The
researchers goal is to understand and describe the dependent variable, or to explain its
variability, or predict it.
• Example 1: A manager is concerned that the sales of a new product do not meet
with his expectations. The dependent variable here is sales.
 • Example 2: A basic researcher is interested in investigating the debt-to-equity ratio
of manufacturing companies in southern Germany. The dependent variable is the
ratio of debt to equity.
• Example 3: 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.
It is possible to have more than one dependent variable in a study.
Independent Variable
It is generally conjectured that an independent variable is one that influences the
dependent variable in either a positive or negative way.
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 covary.
2. The independent variable should precede the dependent variable.
3. No other factor should be a possible cause of the change in the dependent variable.
4. A logical explanation (a theory) is needed.
• Example 1: Research studies indicate that successful new product development
has an influence on the stock market price of the company. The success of the new
product is the independent variable, and stock market price the dependent variable.
NewProductSuccess→StockMarketPriceNewProductSuccess→StockMarketPrice
• Example 2: Cross-cultural research indicates that managerial values govern the
power distance between superiors and subordinates. Managerial values comprise
the independent variable, while power distance is the dependent variable.
ManagerialValues→PowerDistanceManagerialValues→PowerDistance
Moderating Variable
The moderating variable is one that has a strong contingent effect on the independent
variable–dependent variable relationship.
• Example 1: There is a relationship between the availability of reference manuals
and the product rejects. However, this relationship is contingent on the inclination
or urge of the employees to look in the manual every time a new procedure is to be
adopted.
AvailabilityofReferenceManuals→NumberofRejectsAvailabilityofReferenceManuals→Numb
erofRejects
The moderating variable is the employees' interest and inclination.
• Example 2: The diversity of the workforce contributes more to organizational
effectiveness. This synergy can be exploited, however, only if managers know how to
harness the special talents of the diverse work group; managerial expertise then
becomes the moderating variable.
Variables in Research
In research, several types of variables play distinct roles in explaining phenomena. Here's
an overview:
Independent Variable
A variable that influences the dependent variable in either a positive or negative way.
Dependent Variable
The variable of primary interest to the researcher. The goal is to understand and describe
the dependent variable, or to explain its variability.
Moderating Variable
A variable that alters the relationship between the independent and dependent variables. It
affects the strength or direction of the relationship.
The effect of the independent variable on the dependent variable is contingent on the
moderating variable.
Illustration
Imagine that organizational effectiveness is the dependent variable, and it is positively
influenced by workforce diversity, the independent variable. However, managerial expertise
is required to coordinate diverse talents to make things work.
Figure 5.4: Relationship Among Variables
Variable Type
Workforce Diversity Independent

Organizational Effect Dependent

Managerial Expertise Moderating

Independent vs. Moderating Variable
The distinction between an independent and moderating variable depends on how they
affect each other.
Example 1
1. Better training programs + greater employee growth needs = greater willingness to
learn. Training programs and growth need strength are independent variables
influencing employees' willingness to learn (dependent variable).
Example 2
2. Willingness to learn is influenced by training program quality, but only for those with
high growth needs. Training program quality is the independent variable, willingness
to learn is the dependent variable, and growth need strength is the moderating
variable.
Figure 5.5: Influence of Variables
(a) No Moderating Variable (b) With Moderating Variable
Mediating Variable
A variable that surfaces between the time the independent variable begins to operate and
the time its impact is felt on the dependent variable.
It helps to model a process, conceptualizing the influence of the independent variable(s)
on the dependent variable.
Illustration
Workforce diversity (independent variable) influences organizational effectiveness
(dependent variable). Creative synergy is the mediating variable. It surfaces due to diversity
and brings multifaceted expertise to problem-solving.
Figure 5.6: Relationship Among Variables
Time Variable Type
t1 Workforce Diversity Independent

t2 Creative Synergy Mediating

t3 Organizational Effect Dependent

Figure 5.7: Diagram with Moderating Variable
Managerial expertise moderates the relationship between workforce diversity and creative
synergy. Without managerial expertise, synergy will not surface, and the organization may
remain static or deteriorate.
Comparing Variables
Variable Role
Independent Explains variance in the dependent variable.

Surfaces as a function of the independent variable and helps conceptualize the

relationship between the independent and dependent variables. Does not add
Mediating to variance already explained by IV.

Has a contingent effect on the relationship between two variables. Unless

present, the theorized relationship between the other two variables will not
Moderating hold. Has an interaction effect with the IV.
The role of a variable depends on the dynamics operating in the situation.
How Theory is Generated
The theoretical framework is the foundation for deductive research. It's a logically
developed network of associations among relevant variables.
Key Steps
1. Identify the Problem: Correctly identify the problem and variables that contribute
to it.
2. Literature Review: Conduct a thorough literature review.
3. Elaborate Associations: Elaborate the network of associations among variables to
develop hypotheses.
4. Hypothesis Testing: Test hypotheses, and based on the results, determine the
extent to which the problem can be solved.
The literature review provides a solid foundation, identifying potentially important variables
based on previous research.
Components of the Theoretical Framework
1. Define Variables: Clearly define the variables relevant to the problem.
2. Conceptual Model: Describe the relationships between variables.
3. Explanation: Provide a clear explanation of why these relationships are expected to
exist.
Conceptual Model
A conceptual model helps structure the discussion of the literature and describes ideas
about how the concepts (variables) in the model relate to each other.
Hypothesis Development
Hypothesis development involves formulating testable statements to examine
relationships among variables.
Definition of a Hypothesis
A tentative, yet testable, statement predicting what you expect to find in your empirical
data.
Hypotheses are derived from the theory and are relational.
Formats for Stating Hypotheses
1. If-Then Statements:
• Example: If young women are more frequently exposed to images of thin
models in advertisements, then they will be more likely to express
dissatisfaction with their body weight.
2. Propositions:
• Example: Young women will be more likely to express dissatisfaction with
their body weight when they are more frequently exposed to images of thin
models in advertisements.
Directional and Non-Directional Hypotheses
1. Directional Hypotheses: Use terms like "positive," "negative," "more than," or "less
than" to indicate the direction of the relationship.
• Example: The greater the stress experienced in the job, the lower the job
satisfaction of employees.
2. Non-Directional Hypotheses: Postulate a relationship or difference but offer no
indication of the direction.
• Example: There is a relation between arousalseeking tendency and
consumer preferences for complex product designs.
0⃣ Null and Alternate Hypotheses
1. Null Hypothesis (H0):
A hypothesis set up to be rejected in order to support an alternate hypothesis. It's
presumed true until statistical evidence indicates otherwise.
2. Alternate Hypothesis (HA):
A statement expressing a relationship between two variables or indicating differences
between groups, which is the opposite of the null hypothesis.
Example:
• Statement: Women are more motivated than men.
• Null Hypothesis (H0): M>=WM>=W or H0:M−W=0H0:M−W=0
• Alternate Hypothesis (HA): M<WM<W which is the same as HA:W>MHA:W>M
Hypothesis Testing
Hypothesis testing is used to determine if there is significant support for an alternate
hypothesis, indicating a notable difference between groups or a relationship between
variables.
The steps in hypothesis testing are as follows:
1. State the null and the alternate hypotheses.
 2. Choose the appropriate statistical test based on whether the data
is parametric or nonparametric.
3. Determine the desired level of significance (e.g., p = 0.05).
4. Check if the computer analysis results meet the significance level:
• If using Pearson correlation analysis in Excel, and the significance level isn't
indicated, refer to critical values on the appropriate statistical table (t, F, 2).
• The critical value distinguishes the rejection region from the acceptance
region of the null hypothesis.
• If the resultant value is greater than the critical value, the null hypothesis
is rejected, and the alternate is accepted.
• If the calculated value is less than the critical value, the null hypothesis
is accepted, and the alternate is rejected.
Exercises
The transcript then mentions a couple of exercises. These exercises will help solidify the
concepts that were presented during this lecture.
• Exercise 5.11: Diagram relationships between variables and develop five
hypotheses based on Exercise 5.9.
• Exercise 5.12:
1. Define a problem related to low employee output.
2. Create a diagram.
3. Develop at least six hypotheses considering skills, rewards, motivation, and
satisfaction.
• Exercise 5.13: Define a problem, draw a schematic diagram, and formulate
hypotheses for a study on corporate social responsibility (CSR) and its effect on the
market value of a firm, considering customer satisfaction, innovativeness, and
product quality.
Qualitative Hypothesis Testing
Hypothesis testing can also be conducted with qualitative data.
Negative Case Analysis: Involves looking for data that refutes the hypothesis. If a single
case doesn't support the hypothesis, the theory needs revision.
For example, if a researcher hypothesizes that unethical practices are due to an inability to
distinguish right from wrong, a need for money, or organizational indifference, they should
seek data to disprove this. If an individual engages in unethical behavior despite knowing
right from wrong, not needing money, and knowing the organization disapproves, the
hypothesis is disconfirmed. This leads to revising the theory until it becomes robust.
Example: Women in Management
This section discusses a literature review, theoretical framework, and hypothesis
development related to organizational factors influencing women's progress to top
management positions.
Literature Review
• Few large companies are run by women compared to men named John, indicating
a glass ceiling.
• Despite the increase in managerial women, top management positions remain
static.
 • Two main obstacles to women's advancement are gender role
stereotypes and inadequate access to critical information.
Gender Stereotypes
• Societal beliefs that men are better suited for leadership roles, while women are
better suited for nurturing roles.
• These stereotypes influence job assignments, with women often assigned to staff
positions rather than line positions, limiting their exposure to budget management
and significant decision-making.
Exclusion from Information Networks
• Women are often excluded from informal networks, missing out on information
exchange, career strategies, and access to resources.
• Lack of access to critical information hinders their ability to strategize and present
themselves as key contenders for top positions.
Theoretical Framework
The dependent variable of advancement of women to top management positions is
influenced by:
• Independent Variable: Gender role stereotyping
• Mediating Variable: Access to critical information
Gender role stereotypes adversely impact women's career progress by limiting their access
to line positions and critical information.
Schematic Diagram
The schematic diagram visually represents the relationship between the independent,
mediating, and dependent variables:
Variable Type
Gender-role stereotyping Independent

Access to information Mediating

Advancement of women to top Dependent

Hypotheses
1. The greater the extent of gender-role stereotyping in organizations, the fewer women
at the top.
2. The effect of gender-role stereotyping on the advancement of women to the top is
partially mediated by access to information.
Managerial Implications
Understanding the theoretical framework and hypotheses helps managers:
• Judge the research reports submitted by consultants.
• Understand how multiple factors (independent variables) may provide solutions to
the problem (dependent variable).
• Recognize that some proposed solutions may not work for everyone or in every
situation (moderating variable).
• Interpret the significance of hypotheses and decide whether to persist or desist
from following hunches.
 Summary
Learning Objective Description
A theoretical framework represents a researcher's
Discuss the need for a theoretical beliefs on how variables are related and why. It's the
framework in deductive research basis for developing testable hypotheses.

Describe four main types of

variables and identify and label
variables associated with any The four main types of variables are: dependent,
given situation independent, moderating, and mediating.

A theoretical framework should include clearly

Develop a theoretical framework defined variables, a conceptual model describing the
that includes all the relevant relationships between variables, and an explanation
components of why these relationships exist.

Hypotheses are derived from the theory and are

Develop a set of hypotheses to be conjectured relationships between variables
tested expressed as testable statements.

Demonstrate awareness of the Managers can use their knowledge of theoretical

role of the manager in the frameworks to judge research reports, understand
development of a theoretical how multiple factors affect problems, and interpret
framework the significance of hypotheses.