PBL#1: Learning Issues

What is environmental disclosure?

What is corporate social responsible behaviour?
What is the research process?
What is a theoretical framework?
What is a research concept or research variable?
What are the different types of research

variables?
What is meant by the operational definition of a
research concept?
What is a hypothesis?

Environmental Disclosure..
background
Environmental reporting guidelines for Malaysian

companies were published in 2003 by ACCA in

collaboration with the Department of Environment,
MOSTI.
In 2005, ACCA published Sustainable Reporting
Guidelines for Malaysian companies and the
guidelines were endorsed by MOSTI and Bursa.
In 2006, Bursa published a social responsibility
framework to guide social corporate responsibility
(CSR) or sustainability reporting by all public-listed
companies. The CSR items disclosed are voluntary
and companies are not required to explain reasons
for not conducting any CSR activities.

CSR Information Items

Human resource development, health &

work safety
Product safety and quality
Energy saving
Environment protection and waste
prevention
Social & community contributions

Corporate Social Responsible

(CSR) Behaviour
Examples of socially irresponsible

corporate behaviour are deceiving

customers, swindling investors, exploiting
and even brutalizing employees, putting
consumers at risk, poisoning environment,
cheating government etc (Vogel, 1992).
Socially responsible corporate behaviour is
exactly the opposite, and generally
reflects maintaining standards of honesty
& integrity, and not solely philanthropy.

The Research Process

Theoretical Framework
A theoretical framework represents how a theory

explains the nature of relationship between one

(or more) concept(s) or variable(s) and another,
and the reason why such relationship exists.
It is a logically developed and described network
of associations among concepts/variables
deemed relevant to the research problem and
identified through literature review, interview
and observation.
The framework forms the basis for development
of testable hypotheses in a research study.

Basic Features in a Theoretical

Framework
Clearly defined variables that are

relevant to the research

A conceptual model that describes
the realtionships between the
variables.
A clear explanation for each
expected relationship in the model.

Research Concepts and

Variables

Research constructs are images or ideas specifically

created for a theory-building and/or research purpose.

Research concepts are constructs derived by mutual
agreement from mental images. Example: employee
motivation, customer satisfaction & audit quality.
Research variables are logical sets of attributes
(example: high or low) that can vary at different
situations for the same object. The variable can be a
discrete (male or female) or continuous (income )
Every variable must have two important qualities
The attributes composing it should be exhaustive (key attributes)
Attributes must be mutually exclusive (either total assets or total
employees or total sales)

Research Concepts
Objects include persons, strategic business

units, companies, countries, restaurants and

so on. It is determined by the unit of analysis.
Examples of characteristics or attributes
(abstract)of objects examined are:
Persons morale or motivation,
SBU - interdependency,
Companies - organizational effectiveness,
Countries - ethnic diversity,
Restaurants - service quality.

Conceptualization
Conceptualization is the mental process

whereby fuzzy and imprecise notions

(concepts) are made more specific &
precise, i.e., the process which we state
what we specifically mean when we use
those particular terms in research.
Conceptualization processes a specific
agreed-on meaning for a concept for the
purposes of research.

Operationalization
Operationalization is the development of

specific research procedures that will result in

empirical observations representing those
concepts in the real world.
An operational definition specifies precisely
how a concept will be measured that is, the
operations we will perform. It is a working
definition for the purpose of the enquiry. For
example: loan decision quality is defined
/measured by number of installments
defaulted.

Measurement of Variable
Attribute is a characteristic of a variable (example:

Gender: male/female, Ownership: local/foreign )

Dimension is a specifiable aspect of a concept. For
example,
Affection or care dimension, knowledge dimension
& responsive dimension in service quality
concept;
Accuracy dimension, relevance dimension &
timeliness dimension of information quality
concept.
Indicator is a specific proxy measure to reflect the
presence of a variable.
Responsive dimension: time interval taken to
satisfy request
Can be substitutable or not substitutable

Achievement Motivation
Concept

Types of Variables
Four main categories of variable:
Dependent variable
Independent variable
Moderating variable
Mediating variable

Dependent & Independent

Variables
Dependent variable (DV)
Is of primary interest to the

researcher. The goal of the research

project is to understand, predict or
explain the variability of this variable.

Independent variable (IV)

Influences the DV in either positive or

negative way. The variance in the DV is

accounted for by the IV.

Example of DV & IV in the Crosscultural study

Moderators
Moderating variable
:
Moderator is
qualitative (e.g.,
gender, race, class)
or quantitative (e.g.,
level of reward)
variable that affects
the direction and/or
strength of relation
between independent
and dependent
variable.

Moderating Variable

Mediating Variable
Mediating variable surfaces between the

time the independent variables start

operating to influence the dependent
variable and the time their impact is felt
on it.
It helps to explain the influence of the
independent variable on theOrganizatio
dependent
User
nal
variable.
ICT
adoption

satisfacti
on

performanc
e

Hypothesis
A proposition that is testable using
empirical data. It is an empirical statement
concerned with the relationship among
variables.
Must be developed from the theory
(theoretical framework)
Good hypothesis:
Must be adequate for its purpose
Must be testable
Must be better than its rivals (alternative
theory/explanation)
A hypothesis can be:
Directional
Non-directional

Hypothesis
Null Hypothesis: H0

Set up to be rejected in order to support

an alternate hypothesis.
It states that there is no significant
relationship between the variables
examoned
Alternate hypothesis: H 1

The opposite of null hypothesis

A statement expresses the (expected)

relationship between the variables

examined.

Customer
switching

Service quality

Hypothesis statement:
H1: Poor service quality is positively related to high
incidence of customer Switching
switching
cost

H2 Switching cost moderates the relationship

between service quality and incidence of customer
switching.

Hypothesis Statement:
H1: Service quality enhances corporate performance
H2: Customer satisfaction mediates the relationship
between service quality and corporate performance

Service
quality

Customer
satisfaction

Corporate
performanc
e

Research Design for the Environmental

Reporting Study

Theoretical Framework for

Research Study on
Environmental Reporting

Organizational
factors:
Ownership
structure
Company Size
Leverage
Market
Competition

Extent &
quality of
CSR
reporting

Corporate
Performance

Underlying theories: Institution theory;

stakeholder theory; scare resource theory;
proprietary cost theory; signally theory

Hypotheses
H1: Ownership structure is associated with the

extent (& quality) of CSR reporting

H2: Larger companies are associated with
higher extent (& quality) of CSR reporting
H3: High corporate leverage is associate with
lower CSR reporting
H4: Intensity of market competition is
associated with extent (& quality) of CSR
reporting.
H5: Higher extent (& quality) of CSR reporting is
associated with higher corporate performance.

Operational Definition
Ownership structure: GLC, Institutional,

Family-owned.
Leverage: Debt/equity ratio
Company size: annual sales, total
employees or total assets
Market competition: H-index
Corporate performance: cost of capital,
Tobin-Q, ROI or relative performance

Analytical Method
Descriptive statistics
Correlation analysis
Cluster analysis
Regression analysis