Theoretical

Framework and
Variables
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Part 2

Part 1
What is a Theory?
A theory is a formal, testable explanation of some events that includes explanations of
how things relate to one another.

Theories are simply generalizations that help us better understand reality. If a theory
does not hold true in practice, then that theory holds no value.

A theory help us in

Understanding, to gain an understanding of the relationship among various

phenomena.

Prediction, a theory enables us to predict the behavior or characteristics of one

phenomenon from the knowledge of another phenomenon.
The Need for 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.
Integrating your logical beliefs with published research, taking into consideration the boundaries and constraints
governing the situation, is pivotal in developing a scientific basis for investigating the research problem.

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.
The Need for Theoretical Framework
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.

Since a theoretical framework involves the identification of the network of relationships among the variables
considered important to the study of any given problem situation, it is essential to understand what a variable
means and what the different types of variables are.
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.

Four main types of variables are discussed in this chapter:

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 researcher’s goal is to understand and describe the dependent variable, or to
explain its variability, or predict it.
In other words, it is the main variable that lends itself for investigation as a viable
factor.
Through the analysis of the dependent variable (i.e., finding what variables influence
it), it is possible to find answers or solutions to the problem.
For this purpose, the researcher will be interested in quantifying and measuring the
dependent variable, as well as the other variables that influence this variable.
Independent Variable
It is generally conjectured that an independent variable is one that influences the dependent variable in either a
positive or negative way. That is, when the independent variable is present, the dependent variable is also present,
and with each unit of increase in the independent variable, there is an increase or decrease in the dependent
variable.
In other words, the variance in the dependent variable is accounted for by the independent variable. 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: in other words, a change in the dependent variable
should be associated with a change in the independent variable.
2. The independent variable (the presumed causal factor) should precede the dependent variable. In other words,
there must be a time sequence in which the two occur: the cause must occur before the effect.
3. No other factor should be a possible cause of the change in the dependent variable. Hence, the researcher
should control for the effects of other variables.
4. A logical explanation (a theory) is needed and it must explain why the independent variable affects the
dependent variable.
What is Moderating Variable?
● A moderating variable is the one that modifies the existing relationship between the independent
and dependent variable I-e it holds a strong contingent effect on the association of IV and DV
● Although, MV is not influenced by IV but affects the strength and direction of the relationship
between IV and DV.
● For instance the theory suggests that Dissatisfaction at work leads to Turnover, however this
might not be true in developing countries like Pakistan. The reason could be attributed to lack of
Job Opportunities.
● Now in this particular case Job Opportunities is modifying the existing expected relationship
between the IV (Dissatisfaction at work) and DV (Turnover) as naturally if someone is
dissatisfied at work, he/she would think of moving to some other job. So we would say that Job
Opportunities is a MV.
What is Moderation?
● When moderation is present, the strength or even the direction of a relationship between two
constructs depends on a third variable.
● Moderation describes a situation in which the relationship between two constructs is not constant but
depends on the values of a third variable, referred to as a moderator variable.
● As was the case in the last example, where job opportunities weakened the relationship.
● In other words, the nature of the relationship differs depending on the values of the third variable.
A moderation hypothesis can be represented
be a diagram.

Moderating
Variable

Independent Dependent
Variable Variable
What is Mediating Variable?
● A mediator variable is the variable that causes mediation in the dependent and
the independent variables. In other words, it explains the relationship between
the dependent variable and the independent variable.
● The variable that explains the mechanism of impact of IV on DV is referred to
as a mediator.
● When we say that the impact of IV on DV is not direct, and it is through
another variable(s), that third variable is the mediator.
● Simply mean the IV affect the MV and that leads to the DV. What we are in
simple term saying is that IV does not affect the DV directly, but it is actually
the IV affecting the MV and that in turn affect the DV.
What is Mediation?
The form of interrelationship is referred to as mediation. Mediation involves a set of causal hypothesis. An initial
variable may influence an outcome variable through a mediating variable. Mediation is also referred to as causal chain
in which one variable affects a second variable that in turn affects third variable. The first variable is referred to as
Independent variable, the Second Variable is the Mediator, and the outcome variable is the dependent variable. A
variable may be considered a mediator to the extent to which it carries the influence of a given independent variable
(IV) to a given dependent variable (DV). Generally speaking, mediation can be said to occur when
 
● The IV significantly affects the mediator,
● The IV significantly affects the DV in the absence of the mediator,
● The mediator has a significant unique effect on the DV
● The effect of the IV on the DV shrinks upon the addition of the mediator to the model.
 
Mediation occurs if the effect of Independent variable on dependent variable is partly or entirely transmitted by the
mediator. The independent variable may have direct effect on the dependent variable that is not transmitted through the
mediator.
A mediation hypothesis can be represented Independent
 C
Dependent Variable
Variable
be a diagram of causal model. Two
frameworks have been identified here;
Mediating Variable
The first framework shows a direct path a b
model, depicting the total effect of IV on DV,
where “c” represents the path when
mediating variable is not included in the Independent
c’
Dependent Variable

study. Variable

The second diagram depicts relationships

and paths when mediating variable is
included in the study. “a” points to the path
from IV to the Mediator, “b” represents path
from MV to DV while “c’’” represents direct
effect from IV to DV when MV is included in
the study.
How is Theory Generated
1. Having examined the different kinds of variables that can operate in a situation and how the
relationships among these can be established, it is now possible to see how we can develop the
theoretical framework for our research.
2. 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.
3. It becomes evident at this stage that, to arrive at good solutions to the problem, one should first
correctly identify the problem, and then the variables that contribute to it. The importance of
doing a thorough literature review now becomes clear.
4. 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.
5. Based on the results of hypothesis testing (which indicate whether or not the hypotheses have
been supported), the extent to which the problem can be solved becomes evident. The theoretical
framework is thus an important step in the research process.
How is Theory Generated
1. The relationship between the literature review and the theoretical framework is
that the former provides a solid foundation for developing the latter. That is, the
literature review 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.
2. The theoretical framework represents and 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 review sets the stage for a
good theoretical framework, this in turn provides the logical base for developing
testable hypotheses.
The components of the theoretical framework
1. A good theoretical framework identifies and defines the important variables that are relevant
to the problem and subsequently describes and explains the interconnections among these
variables.
2. The relationships among the independent variables, the dependent variable(s), and, if
applicable, the moderating and mediating variables are elaborated. Should there be any
moderating variable(s), it is important to explain how and what specific relationships they
moderate.
3. An explanation of why they operate as moderators should also be offered. If there are any
mediating variables, a discussion on how or why they are treated as mediating variables is
necessary.
4. Note that a good theoretical framework is not necessarily a complex framework.
There are three basic features that should be incorporated in any theoretical framework:
5. The variables considered relevant to the study should be clearly defined.
6. A conceptual model that describes the relationships between the variables in the model
should be given.
7. There should be a clear explanation of why we expect these relationships to exist.
The components of the theoretical framework
Variable Definition
1. It is not always easy to come up with generally agreed ‐upon definitions of the relevant
variables.
2. More often than not, there are many definitions available in the literature (for instance, there
are literally dozens of definitions of “brand image,” “customer satisfaction,” and “service
quality” available in the marketing literature).
3. Still, well chosen guiding definitions of concepts are needed, because they will help you to
provide an explanation for the relationships between the variables in your model.
4. What’s more, they will also serve as a basis for the operationalization or measurement of your
concepts in the data collection stage of the research process.
5. Hence, you will have to choose a useful definition from the literature (do not use dictionary
definitions, they are usually too general).
6. It is also important that you explain why you have chosen a particular definition as your
guiding definition.
The components of the theoretical framework
Conceptual Model
1. A conceptual model helps you to structure your discussion of the literature. A conceptual
model describes your ideas about how the concepts (variables) in your model are related to
each other.
2. A schematic diagram of the conceptual model helps the reader to visualize the theorized
relationships between the variables in your model and thus to obtain a quick idea about how
you think that the management problem can be solved.
3. Hence, conceptual models are often expressed in this form. However, relationships between
variables can also be adequately expressed in words. Both a schematic diagram of the
conceptual model and a description of the relationships between the variables in words
should be given, so that the reader can see and easily comprehend the theorized relationships.
4. This facilitates and stimulates discussion about the relationships between the variables in
your model. It is therefore important that your model is based on a sound theory.
The components of the theoretical framework
Theory/Explanation of Relationship
1. A theory or a clear explanation for the relationships in your model is the last
component of the theoretical framework.
2. A theory attempts to explain relationships between the variables in your model: an
explanation should be provided for all 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 and/ or your own ideas on the subject, then there
should also be an indication as to whether the relationships should be positive or
negative and linear or nonlinear.
4. From the theoretical framework, then, testable hypotheses can be developed to
examine whether the theory formulated is valid or not.
The components of the theoretical framework
1. Note that you do not necessarily have to “invent” a new theory every time you are undertaking a research
project.
2. In a basic research context you will make some contribution to existing theories and models. In such a case, it
is not (always) possible to use existing theories or explanations for relationships between variables. As a
result, you will have to rely on your own insights and ideas.