BusinessResearch Methods

William G. Zikmund

Chapter 3:

Theory Building

Theories

Theories are nets cast to catch what we call “the world”: to rationalize, to explain, and to master it. We endeavor to make the mesh ever finer and finer (Karl R. Popper).

Two Purposes Of Theory

• Prediction

• Understanding

Theory

• A coherent set of general propositions used as principles of explanation of the apparent relationships of certain observed phenomena.

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

Theories must be: Objective, Verifiable (i.e. within the accepted margins of error), Falsifiable / disprovable

Good theories must understand, explain and predict

Concept (or Construct)• A generalized idea about a class of objects,

attributes, occurrences, or processes that has been given a name

• Building blocks that abstract reality …..

• In management we often use concepts or constructs as variables

• Examples: Leadership, Productivity, Morale, Gross National Product, Asset, Inflation, Social Responsibility, GNP, Agency, Honesty, Efficiency

Example of a Theory: Voluntary Job Turnover

Labour market conditions, number of organizations, personal characteristics, And other partial determinants of ease of movement

Perceived ease of movement (e.g. Expectation of finding alternatives,

unsolicited opportunities)

Perceived desirability of movement (e.g. job satisfaction)

Equity of pay, job complexity, participation in decision-making, and other partial determinants of desirability of movement

Zikmund, pp. 44 - 45

Abstraction

• Concepts abstract reality– Concepts are expressed in words that refer to

various events or objects– Concepts vary in degree of abstraction

• Ladder of abstraction

• Research operates at abstract and empirical level linking concepts together as we begin the journey to construct theory.

Vegetation Vegetation

Fruit Fruit

Banana Banana

Reality Reality

Incr

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A Ladder Of Abstraction For Concepts

Scientific Business Researchers Operate at Two Levels

• Abstract level – concepts – propositions

• Empirical level– variables– hypotheses

Definitions

• Abstract level -In theory development, the level of knowledge expressing a concept that exists only as an idea or a quality apart from an object.

• Empirical level -Level of knowledge reflecting that which is verifiable by experience or observation.

Theory Building A Process Of Increasing Abstraction

Theories Theories

Propositions Propositions

Concepts Concepts

Observation of objectsObservation of objectsand events (reality ) and events (reality ) In

crea

sing

ly m

ore

abst

ract

Propositions

• Concepts are the basic building blocks

• Propositions propose the linkages between these concepts

theory

propositions

concepts

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CONCEPTS

OBSERVATION OF OBJECTS AND EVENTS (REALITY)

EmpiricalLevel

AbstractLevel

Concepts are Abstractions of Reality

Scientific Method

The use of a set of prescribed procedures for establishing and connecting theoretical statements about events and for predicting events yet unknown.

Abstract Level

• Concepts abstract reality.

• Propositions are statements concerned with the relationships among concepts.

From proposition to hypothesis

Concept A:

Punishment Or

Reinforcement

Concept B:

Attendance Or

Habits

Yelling at students

Or Dollar bonus for sales volume

over quota

Increases attendance by 50% OrAlways makes four sales calls

a day

AbstractLevel

EmpiricalLevel

Proposition

Hypoth-esis

Proposition at Abstract Level

Hypothesis at Empirical Level

• 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 may assume different numerical values i.e. that varies

• Make sure that you define, or operationalize all your variables… an operational definition

• Null hypothesis

The Origin of the Hypothesis

• Is said to date from the time of Plato (428-347BC), a Greek philosopher.

• Plato believed one should develop a belief and then test it by observation.

The earth is flat!• The medieval church depicted the earth as

flat.• This was linked to religious and other beliefs

in a limited world. They used deductive reasoning based not on fact but on their own beliefs.

• Copernicus, Galileo and others helped prove the earth was anything other than flat.

• The faulty hypothesis did not fit the facts, but it held sway over generations till it was shown to be false.

What makes a good hypothesis?

• precise

• specifies variables to measure

• specifies relationships between variables

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

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.

A better hypothesis

Theory and Song

A fact without a theory

Is like a ship without a sail,

Is like a boat without a rudder,

Is like a kite without a tail.

A fact without a figure is a tragic final act,

But one thing worse in this universe

Is a theory without a fact.

Research questions

• Are often used when you are not sure of aspecific hypothesis, you need to generalise

• Helps focus on the problem and identifieswhat can be measured

• Whereas there is normally a single hypothesis, there are normally multipleresearch questions

Theory Formulation

Deductive VS Inductive Reasoning

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.

Deductive Reasoning

Theory

Hypotheses

Observation

Confirmation

Using deductive reasoning onestarts with a given theory as the basis for which we develop hypotheses and then confirm these with specific data acquired using observation or experimentation

(Is our theory valid or not?)

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.

Inductive Reasoning

Observation

Pattern

Tentative Hypothesis

Theory

Using inductive reasoning, onestarts with a specific observation as the basis for which we develop a general pattern and tentative hypothesis as the foundation of a theory

Double Movement of reflexive thought

• Induction occurs when we observe a fact and ask “why” … Tahir is laughing (why)

• To answer this we develop a tentative hypothesis as the explanation … Tahir laughed because he read a funny message(answer)

• Deduction is the process whereby we test the hypothesis … (if funny message is read one will laugh … send a message to one and get the result .. Interpret result .. conclude)

The Scientific Method

The “scientific method” is basically an overarching perspective on how scientific investigations should be undertaken. It can, in effect, be considered as a complete set of principles and methods that help researchers in all scientific disciplines obtain valid results for their research studies, and which includes the provision of clear and universally accepted guidelines for acquiring, evaluating and communicating information in the context of a research study

The goals of scientific research are, broadly speaking, to understand, explain and predict

AssessAssessrelevant relevant existingexistingknowledgeknowledge

FormulateFormulateconcepts &concepts &PropositionsPropositions

Statement of Statement of HypothesesHypotheses

Design Design researchresearch

Acquire Acquire empiricalempiricaldatadata

Analyze &Analyze &evaluate evaluate datadata

Provide Provide explanation-explanation-state newstate newproblemproblem

The Scientific Method: An Overview

Elements of the Scientific Method

Empirical Approach Observation Questions Hypotheses Experiments Analysis Conclusion Replication

Elements of the Scientific Method(Empirical Approach)

Evidence-based approach. The guiding principle behind all research conducted in accordance with the scientific method

Data derived from direct, systematic and careful observation and experimentation (as opposed to speculation, intuition, opinions, hunches, gut feeling)

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Elements of the Scientific Method(Observation)

Awareness of the real / physical / social world in which we exist. This, in turn, gives rise to questions as the basis for research studies or investigations

Operational Definitions – Ensures consistency when researchers talk about or are interested in undertaking or replicating research on the same phenomenon. Example: What is “exercise”?

What is consistency?

Elements of the Scientific Method(Questions)

Making an answerable question out of a research idea. The question must be answered using available and established scientific research techniques and procedures. Scientific Analysis should not be attempted on questions which cannot be answered

Example of an answerable question: Can regular exercising reduce an individual’s cholesterol level?

Example of a (currently) unanswerable question: Is time travel possible?

Elements of the Scientific Method(Hypotheses)

Hypotheses attempt to explain phenomena of interest. A hypothesis is a proposition which is empirically testable (proposition ?). It usually seeks to explain relationships between variables, and predict, and must be falsifiable

Typical hypotheses structures:

Conditional - If Condition X is fulfilled, then Outcome Y will result

Correlational - The value of Variable B is observed to be related with changes in the value of Variable A

Causal – The value of Variable Z determines the value of Variable Q

what is variable?

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Elements of the Scientific Method(Experiments)

Experiments are basically about measuring phenomena and collecting accurate and reliable data which are used for analysis and evaluation

Accuracy – Correctness of the Measurement

Reliability – Consistency of the Measurement

What is (i) validity (ii) reliability?

Elements of the Scientific Method (Analysis)Analysis is about the use of qualitative or quantitative tools and techniques to process data

Quantitative tools and techniques are considered more desirable (objective) than qualitative tools and techniques … (remember there are experts who will strongly object to this)

Statistical analysis is typically used to quantitatively analyze data acquired in research studies

What is (i) procedure (ii) method (iii) methodology (iv) technique (v) tool (vi) farmula

Elements of the Scientific Method(Conclusions)

Based on the results of the analysis conducted, and used to support or refute a hypothesis

When undertaking research, conclusions should only be based on the available data and not broadened to include statements which are not supported by the data

Example: If the research analysis shows that two variables are correlated (related), do not assert also that a causal relationship exists between them

Elements of the Scientific Method (Replication)

The purpose of replication is to ensure that if the same research study is conducted with different participants (i.e. researchers, research subjects), then the same results are achieved

Replication establishes the reliability of a research study’s conclusions

Conclusions are often based on the results of one research study (aberration effect … oddness, peculiarity) which may not be accurate

Falsificationist

• You cannot prove the theory that it is correct, but you can disprove it.

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