Chapter 3 – Theory Building
What is a theory?
✓ Consists of general propositions that explain some phenomena by describing
how other things correspond to this phenomenon
✓ Forma, logical explanation events – includes predictions of how things relate to
one another
✓ Testable explanation
✓ Model of reality (simplification that helps better understand logic/relationship
amongst factors
✓ Built through process of reviewing previous findings of similar studies, simple
logical deduction + knowledge of applicable theoretical areas
Goals of theory:
✓ Understanding relationship among various phenomena
✓ Predicting behaviour/ characteristics of one phenomenon from knowledge of
another
RESEARCH CONCEPTS, CONSTRUCTS, PROPOSITIONS, VARIABLES AND
HYPOTHESES.
✓ Theory development – process of describing phenomena at increasingly higher
levels of abstraction
Research concepts and constructs:
✓ Concept/construct: generalized ideas about a class of objects, attributes,
phenomena, occurrences, procedures
✓ Concepts = building blocks of theory + they abstract reality (express in words
various events/objects)
✓ Can discuss concepts at various levels of abstraction
✓ Ladder of abstraction: organistaion of concepts in sequence from most concrete
and individual to most concrete
✓ Researchers operate at abstract level (a concept that exists only as an idea or
quality apart from an object) and empirical level (level of knowledge verifiable by
experience/observation)
✓ Latent construct: concept not directly measurable but can be estimated through
proxy measure e.g job performance, customer satisfaction, risk aversion
✓ Ideas = essence of theories
, Research propositions and hypotheses:
✓ Propositions: statement explaining the logical linkage among certain concepts by
asserting a universal connection between concepts
✓ Hypothesis:
o formal statement of an unproven proposition that is empirically testable
o explains an outcome
o should be written in manner that can be supported/shown to be wrong
through empirical tests
✓ empirical test: examininb a research hypothesis against reality using data
✓ variables: anything that may assume different numerical values; the empirical
assessment of a concept
✓ when data are consistent with hypothesis, hypothesis is supported – vice versa
for inconsistency
✓ statistics cannot prove a hypothesis is true
✓ operationalising: process of identifying actual measurement scales to assess
variables of interest
UNDERSTANDING THEORY
Verifying theory: researchers make observations / gather empirical data to verify
theories
Theory building: may occur at abstract, conceptual, empirical level
ve reasoning by going from general statement to specific assertion
ut specific instance based on known general premise
THE SCIENTIFIC METHOD
✓ Set of prescribed procedures for establishing & connecting throrectical
statements about events, for analysing empirical evidence, predicting events
unknown, teachniques / procedures used to analyse empirical evidence to
confirm or disprove prior conceptions
Steps involved in application of the scientific method:
1. Assessment of relevant existing knowledge of a phenomenon
2. Formulation of concepts and propositions
3. Statement of hypothesis
4. Design of research to test the hypothesis
5. Acquisition of meaningful empirical data
6. Analysis of evaluation of data
7. Proposal of an explanation of the phenomenon and statement of new problems
raised by research
PRACTICAL VALUE OF THEORIES:
, ✓ Allow us to generalise beyond individual facts or isolated solutions so general
patterns may be understood/predicted
✓ Provide a framework that can guide managerial strategy by providing insights into
general rules of behaviour
CHAPTER 6 –PROBLEM DEFINITION: THE FOUNDATION OF BUSINESS
RESEARCH
Importance of starting with a good problem definition:
✓ Chances that research project is useful is related to how well research objectives
correspond to the true business problem
✓ Decision statement: written expression of the key question the research user
wants to answer
✓ Problem definition: process of defining and developing a decision statement +
steps involved in translating it into more precise research terminology including a
set of research objectives
✓ Research will be harmful (wastage of resources/misleading the company) or
useless if this process breaks down
Problem complexity:
✓ Quality of business research is limited by quality of problem definition stage
✓ Often the most complex stage
✓ Exhibit 6.1
Situation frequency: Business situations are cyclical, leading to recurring business
problems + problems become routine (so it’s easy to define problems and research
needed and can be automated through a decision support system/ without additional
research)
Dramatic changes:
✓ Sudden change = easier to define the problem
✓ Subtle changes over long period – difficult to define decision and research
problem
How widespread are the symptoms?
What is a theory?
✓ Consists of general propositions that explain some phenomena by describing
how other things correspond to this phenomenon
✓ Forma, logical explanation events – includes predictions of how things relate to
one another
✓ Testable explanation
✓ Model of reality (simplification that helps better understand logic/relationship
amongst factors
✓ Built through process of reviewing previous findings of similar studies, simple
logical deduction + knowledge of applicable theoretical areas
Goals of theory:
✓ Understanding relationship among various phenomena
✓ Predicting behaviour/ characteristics of one phenomenon from knowledge of
another
RESEARCH CONCEPTS, CONSTRUCTS, PROPOSITIONS, VARIABLES AND
HYPOTHESES.
✓ Theory development – process of describing phenomena at increasingly higher
levels of abstraction
Research concepts and constructs:
✓ Concept/construct: generalized ideas about a class of objects, attributes,
phenomena, occurrences, procedures
✓ Concepts = building blocks of theory + they abstract reality (express in words
various events/objects)
✓ Can discuss concepts at various levels of abstraction
✓ Ladder of abstraction: organistaion of concepts in sequence from most concrete
and individual to most concrete
✓ Researchers operate at abstract level (a concept that exists only as an idea or
quality apart from an object) and empirical level (level of knowledge verifiable by
experience/observation)
✓ Latent construct: concept not directly measurable but can be estimated through
proxy measure e.g job performance, customer satisfaction, risk aversion
✓ Ideas = essence of theories
, Research propositions and hypotheses:
✓ Propositions: statement explaining the logical linkage among certain concepts by
asserting a universal connection between concepts
✓ Hypothesis:
o formal statement of an unproven proposition that is empirically testable
o explains an outcome
o should be written in manner that can be supported/shown to be wrong
through empirical tests
✓ empirical test: examininb a research hypothesis against reality using data
✓ variables: anything that may assume different numerical values; the empirical
assessment of a concept
✓ when data are consistent with hypothesis, hypothesis is supported – vice versa
for inconsistency
✓ statistics cannot prove a hypothesis is true
✓ operationalising: process of identifying actual measurement scales to assess
variables of interest
UNDERSTANDING THEORY
Verifying theory: researchers make observations / gather empirical data to verify
theories
Theory building: may occur at abstract, conceptual, empirical level
ve reasoning by going from general statement to specific assertion
ut specific instance based on known general premise
THE SCIENTIFIC METHOD
✓ Set of prescribed procedures for establishing & connecting throrectical
statements about events, for analysing empirical evidence, predicting events
unknown, teachniques / procedures used to analyse empirical evidence to
confirm or disprove prior conceptions
Steps involved in application of the scientific method:
1. Assessment of relevant existing knowledge of a phenomenon
2. Formulation of concepts and propositions
3. Statement of hypothesis
4. Design of research to test the hypothesis
5. Acquisition of meaningful empirical data
6. Analysis of evaluation of data
7. Proposal of an explanation of the phenomenon and statement of new problems
raised by research
PRACTICAL VALUE OF THEORIES:
, ✓ Allow us to generalise beyond individual facts or isolated solutions so general
patterns may be understood/predicted
✓ Provide a framework that can guide managerial strategy by providing insights into
general rules of behaviour
CHAPTER 6 –PROBLEM DEFINITION: THE FOUNDATION OF BUSINESS
RESEARCH
Importance of starting with a good problem definition:
✓ Chances that research project is useful is related to how well research objectives
correspond to the true business problem
✓ Decision statement: written expression of the key question the research user
wants to answer
✓ Problem definition: process of defining and developing a decision statement +
steps involved in translating it into more precise research terminology including a
set of research objectives
✓ Research will be harmful (wastage of resources/misleading the company) or
useless if this process breaks down
Problem complexity:
✓ Quality of business research is limited by quality of problem definition stage
✓ Often the most complex stage
✓ Exhibit 6.1
Situation frequency: Business situations are cyclical, leading to recurring business
problems + problems become routine (so it’s easy to define problems and research
needed and can be automated through a decision support system/ without additional
research)
Dramatic changes:
✓ Sudden change = easier to define the problem
✓ Subtle changes over long period – difficult to define decision and research
problem
How widespread are the symptoms?
