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The Role of Business Research Theory Building

Understand the scope and types of business research, from pure theory to applied solutions. Explore various research methods and the importance of theory building in decision-making processes. Learn about sources of knowledge, theory formulation, and the scientific approach, along with key concepts like constructs, propositions, and hypotheses. Discover the role of research in identifying problems, devising strategies, and evaluating outcomes. Consider the nature of truth and validity in theory development. Enhance your knowledge of research principles and methodologies to make informed business decisions.

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The Role of Business Research Theory Building

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  1. The Role of Business ResearchTheory Building

  2. The scope of business research What is “business” anyway??? Is research applicable to all business units/functions?

  3. Business research defined • the systematic and objective process of gathering, recording, and analyzing data for aid in making business decisions

  4. PURE expand the limits of knowledge not aimed at solving a specific pragmatic problem theory development APPLIED aimed at solving a specific pragmatic problem “action research” is one type Types of research

  5. Applications • identifying problems or opportunities • diagnosis and assessment • selecting and implementing a course of action • evaluating a course of action • Evaluation • Performance monitoring

  6. Research isn’t always the answer! • Before doing research consider the following: • time constraints • availability of data • nature of the decision • has the decision already been made? • does the cost outweigh the benefit?

  7. Nature of truth • knowledge is socially constructed

  8. Sources of Knowledge • Experience • but may not be systematic • may not be universal • Authority • custom • tradition • but how does authority know?

  9. Francis Bacon

  10. SOURCES OF KNOWLEDGE • Experience • Authority • Deductive Reasoning • Inductive Reasoning

  11. SOURCES OF KNOWLEDGE • Experience • Authority • Deductive Reasoning • Inductive Reasoning • Scientific Method • inductive - deductive

  12. Theory Formulation • Deductive Reasoning • The logical process of deriving a conclusion from a known premise or something known to be true. • We know that all managers are human beings. • If we also know that John Smith is a manager, • then we can deduce that John Smith is a human being. • Subject to error!

  13. Inductive Reasoning • The logical process of establishing a general proposition on the basis of observation of particular facts. • All managers that have ever been seen are human beings; • therefore all managers are human beings. Subject to error too!

  14. THE SCIENTIFIC APPROACH

  15. THEORY • is a system for explaining a set of phenomena by specifying constructs and the laws that relate these constructs to each other.

  16. Purpose of Theories • to summarize and organize existing knowledge • to explain observed events and relationships • to predict the occurrence of unobserved events and relationships • to stimulate further inquiry • identifying areas • providing leads

  17. What makes a good theory? • Validity • It fits the facts • Generalization • Makes predictions about future or other events • Replication • It can be repeated with similar findings

  18. Constructs • In management we often use concepts or constructs as variables • examples: • leadership • social responsibility • GNP • agency • honesty • efficiency

  19. Abstraction • Concepts abstract reality • Are expressed in words that refer to various events or objects • Vary in degree of abstraction • Research operates at abstract and empirical level linking concepts together as we begin the journey to construct theory.

  20. Propositions • Concepts are the basic building blocks • Propositions propose the linkages between these concepts Level of abstraction theory propositions concepts

  21. From proposition to hypothesis Proposition Concept A: Punishment Concept B: Attendance Abstract Level Yelling at students Increases attendance by 50% Emperical Level Hypothesis

  22. A hypothesis is a proposition that is empirically testable. It is an empirical statement concerned with the relationship among variables. • A variable is anything that… varies! • Make sure that you define, or operationalize all your variables… an operational definition • Null hypothesis

  23. What makes a good hypothesis? • precise • specifies variables to measure • specifies relationships between variables

  24. A poor hypothesis • Students spend too much money on fast food.

  25. A better hypothesis • Students with incomes of less than 10,000 per year spend a higher proportion of their income in fast food restaurants than the established mean for the general population.

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