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Theory Development as Observational puzzle-solving

Theory Development as Observational puzzle-solving. Donald C. Hambrick. Outline. Outline. De-Mystifying Theory • Q and A. Outline. De-Mystifying Theory • Q and A Theory Development as Observational Puzzle-Solving: Some Personal Experiences • Q and A. Outline.

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Theory Development as Observational puzzle-solving

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  1. Theory Development as Observational puzzle-solving Donald C. Hambrick

  2. Outline

  3. Outline • De-Mystifying Theory • Q and A

  4. Outline • De-Mystifying Theory • Q and A • Theory Development as Observational Puzzle-Solving: Some Personal Experiences • Q and A

  5. Outline • De-Mystifying Theory • Q and A • Theory Development as Observational Puzzle-Solving: Some Personal Experiences • Q and A • Theory Development From Rich Qualitative Data • Q and A

  6. Outline • De-Mystifying Theory • Q and A • Theory Development as Observational Puzzle-Solving: Some Personal Experiences • Q and A • Theory Development From Rich Qualitative Data • Q and A • Open Discussion

  7. De-Mystifying Theory What is “theory”?

  8. De-Mystifying Theory What is “theory”? • The scientist’s job: to search for and explain patterns

  9. De-Mystifying Theory What is “theory”? • The scientist’s job: to search for and explain patterns • Let’s adopt Dubin’s classic perspective X Y

  10. De-Mystifying Theory What is “theory”? • The scientist’s job: to search for and explain patterns • Let’s adopt Dubin’s classic perspective Why? X Y

  11. De-Mystifying Theory What is “theory”? • The scientist’s job: to search for and explain patterns • Let’s adopt Dubin’s classic perspective theory! Why? X Y

  12. De-Mystifying Theory What is “theory”? • The scientist’s job: to search for and explain patterns • Let’s adopt Dubin’s classic perspective • Or, as Kaplan said, “Theory explains why empirical patterns were observed or are expected to be observed. theory! Why X Y

  13. De-Mystifying Theory A couple examples:

  14. De-Mystifying Theory A couple examples: Equity Theory

  15. De-Mystifying Theory A couple examples: Equity Theory One’s Perception of Being Overpaid (or Underpaid) Relative to One’s Contribution Increased (or Decreased) Effort

  16. De-Mystifying Theory A couple examples: Equity Theory One’s Perception of Being Overpaid (or Underpaid) Relative to One’s Contribution Increased (or Decreased) Effort Why?• Sense of “debt”

  17. De-Mystifying Theory A couple examples: Equity Theory Agency Theory (as applied to corporate governance) One’s Perception of Being Overpaid (or Underpaid) Relative to One’s Contribution Increased (or Decreased) Effort Why?• Sense of “debt”

  18. De-Mystifying Theory A couple examples: Equity Theory Agency Theory (as applied to corporate governance) One’s Perception of Being Overpaid (or Underpaid) Relative to One’s Contribution Increased (or Decreased) Effort Why?• Sense of “debt” When owners hire others to manage their firms… Badoutcomesfor theowners

  19. De-Mystifying Theory A couple examples: Equity Theory Agency Theory (as applied to corporate governance) One’s Perception of Being Overpaid (or Underpaid) Relative to One’s Contribution Increased (or Decreased) Effort Why?• Sense of “debt” When owners hire others to manage their firms… Badoutcomesfor theowners Why?• Hired managers… • shirk • steal • pursue their own objectives

  20. De-Mystifying Theory So, what does it mean to make a “theoretical contribution”?

  21. De-Mystifying Theory So, what does it mean to make a “theoretical contribution”? Agency Theory Why?• Hired managers… • shirk • steal • pursue their own objectives When owners hire others to manage their firms… Badoutcomesfor theowner

  22. De-Mystifying Theory So, what does it mean to make a “theoretical contribution”? • develop a brand-new theory Agency Theory Why?• Hired managers… • shirk • steal • pursue their own objectives When owners hire others to manage their firms… Badoutcomesfor theowner

  23. De-Mystifying Theory So, what does it mean to make a “theoretical contribution”? • develop a brand-new theory • add to an existing theory • clarify the operative mechanisms (mediators) • introduce moderators • add new concepts Agency Theory Why?• Hired managers… • shirk • steal • pursue their own objectives When owners hire others to manage their firms… Badoutcomesfor theowner

  24. De-Mystifying Theory So, what does it mean to make a “theoretical contribution”? • develop a brand-new theory • add to an existing theory • clarify the operative mechanisms (mediators) • introduce moderators • add new concepts • identify or elaborate on the implications of the theory Agency Theory Why?• Hired managers… • shirk • steal • pursue their own objectives When owners hire others to manage their firms… Badoutcomesfor theowner

  25. De-Mystifying Theory So, what does it mean to make a “theoretical contribution”? • develop a brand-new theory • add to an existing theory • clarify the operative mechanisms (mediators) • introduce moderators • add new concepts • identify or elaborate on the implications of the theory • “subtract from” the theory • identify important boundary conditions • logically argue or demonstrate that the theory is weak/wrong Agency Theory Why?• Hired managers… • shirk • steal • pursue their own objectives When owners hire others to manage their firms… Badoutcomesfor theowner

  26. De-Mystifying Theory How do we assess the “quality” of a theoretical contribution?

  27. De-Mystifying Theory How do we assess the “quality” of a theoretical contribution? • generality • including the scope of its implications • a very encompassing theory qualifies as a paradigm

  28. De-Mystifying Theory How do we assess the “quality” of a theoretical contribution? • generality • including the scope of its implications • a very encompassing theory qualifies as a paradigm • simplicity

  29. De-Mystifying Theory How do we assess the “quality” of a theoretical contribution? • generality • including the scope of its implications • a very encompassing theory qualifies as a paradigm • simplicity • accuracy

  30. De-Mystifying Theory How do we assess the “quality” of a theoretical contribution? • generality • including the scope of its implications • a very encompassing theory qualifies as a paradigm • simplicity • accuracy • surprise

  31. De-Mystifying Theory How do we assess the “quality” of a theoretical contribution? • generality • including the scope of its implications • a very encompassing theory qualifies as a paradigm • simplicity • accuracy • surprise When Sutton and Staw refer to “strong theory,” what do they mean?

  32. De-Mystifying Theory How do we assess the “quality” of a theoretical contribution? • generality • including the scope of its implications • a very encompassing theory qualifies as a paradigm • simplicity • accuracy • surprise When Sutton and Staw refer to “strong theory,” what do they mean? • clarity of argumentation • logical consistency

  33. De-Mystifying Theory Questions?

  34. Theory Development: Some Personal Experiences

  35. Theory Development: Some Personal Experiences Where do theoretical ideas not come from?

  36. Theory Development: Some Personal Experiences Where do theoretical ideas not come from? • reading in isolation

  37. Theory Development: Some Personal Experiences Where do theoretical ideas not come from? • reading in isolation • thinking in isolation

  38. Theory Development: Some Personal Experiences Where do theoretical ideas not come from? • reading in isolation • thinking in isolation • intentions to theorize

  39. Theory Development: Some Personal Experiences Where do theoretical ideas not come from? • reading in isolation • thinking in isolation • intentions to theorize Instead, theoretical ideas “emerge” from observational puzzle-solving: “Why is it…?” “Have you ever noticed…?”

  40. Theory Development: Some Personal Experiences Where do theoretical ideas not come from? • reading in isolation • thinking in isolation • intentions to theorize Instead, theoretical ideas “emerge” from observational puzzle-solving: “Why is it…?” “Have you ever noticed…?” Namely, to develop theory, you need data! • aggregate, large-N data • fine, rich, small-N data • accumulation of data – via experience

  41. Theory Development: Some Personal Experiences Let me illustrate with three of my successes in theory/concept development: • Upper echelons theory • Managerial discretion • Behavioral integration (within top management teams, or TMTs)

  42. Theory Development: Some Personal Experiences Upper echelons theory: ExecutiveCharacteristics StrategicChoice

  43. Theory Development: Some Personal Experiences Upper echelons theory: (more accurately a “framework”) ExecutiveCharacteristics StrategicChoice

  44. Theory Development: Some Personal Experiences Upper echelons theory: (more accurately a “framework”) Originally (in 1975) a term paper for a PhD seminar ExecutiveCharacteristics StrategicChoice

  45. Theory Development: Some Personal Experiences Upper echelons theory: (more accurately a “framework”) Originally (in 1975) a term paper for a PhD seminar The data that puzzled me: Why does Fortune magazine devote space to reporting the detailed demographic backgrounds of 500 CEOs every year? ExecutiveCharacteristics StrategicChoice

  46. Theory Development: Some Personal Experiences Upper echelons theory: (more accurately a “framework”) Originally (in 1975) a term paper for a PhD seminar The data that puzzled me: Why does Fortune magazine devote space to reporting the detailed demographic backgrounds of 500 CEOs every year? Later, (in 1983), a discussion with my PhD student Phyllis Mason The data that puzzled me: I wonder if I’m having any effect on my MBA students? ExecutiveCharacteristics StrategicChoice

  47. Theory Development: Some Personal Experiences Upper echelons theory: (more accurately a “framework”) Originally (in 1975) a term paper for a PhD seminar The data that puzzled me: Why does Fortune magazine devote space to reporting the detailed demographic backgrounds of 500 CEOs every year? Later, (in 1983), a discussion with my PhD student Phyllis Mason The data that puzzled me: I wonder if I’m having any effect on my MBA students? I wonder if executives who have MBAs are any different from those without MBAs? ExecutiveCharacteristics StrategicChoice

  48. Theory Development: Some Personal Experiences Hambrick & Mason (AMR, 1984) was a happy confluence of three things a fun discussion with Phyllis Mason in 1983 recollection of the 1975 paper insights from my 1979 dissertation on environmental scanning

  49. Theory Development: Some Personal Experiences The eventual Upper Echelons model:

  50. Theory Development: Some Personal Experiences Managerial Discretion (a concept, not a theory)

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