LEARNING OUTCOMES After studying this chapter, you should Define the meaning of theory Understand the goals of theory Understand the terms concepts, propositions, variables, and hypotheses Discuss how theories are developed Understand the scientific method © 2010 South-/Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

What is a Theory? Theory Goals of Theory A formal, logical explanation of some events that includes predictions or how things relate to one another. Goals of Theory Understanding Predicting © 2010 South-/Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

Research Concepts Concept (or construct) A generalized idea about a class of objects, attributes, occurrences or process that has been given a name. Examples: leadership morale gross domestic product assets customer satisfaction market share © 2010 South-/Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

Ladder of Abstraction Ladder of Abstraction Abstract Level Organization of concepts in sequence from the most concrete and individual to the most general. Abstract Level The level of knowledge expressing a concept that exists only as an idea or a quality apart from an object. Empirical Level The level of knowledge that is verifiable by experience or observation. Latent Construct A concept that is not directly observable or measurable, but can be estimated through proxy measures. © 2010 South-/Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

EXHIBIT 3.1 A Ladder of Abstraction for Concepts © 2010 South-/Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

EXHIBIT 3.2 Concepts are Abstractions of Reality © 2010 South-/Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

Research Propositions and Hypotheses Statements explaining the logical linkage among certain concepts by asserting a universal connection between concepts. Example: Treating employees better will make them more loyal employees. Hypothesis Formal statement of an unproven proposition that is empirically testable. Example: Giving employees one Friday off each month will result in lower employee turnover. © 2010 South-/Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

Empirical Testing Empirical Testing Variables Operationalizing Examining a research hypothesis against reality using data. Variables Anything that may assume different numerical values. The empirical assessment of a concept. Operationalizing The process of identifying the actual measurement scales to asses the variables of interest. © 2010 South-/Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

EXHIBIT 3.3 Hypotheses Are the Empirical Counterparts of Propositions © 2010 South-/Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

EXHIBIT 3.4 A Basic Theory Explaining Voluntary Job Turnover © 2010 South-/Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

Theory Building Deductive Reasoning Inductive Reasoning The logical process of deriving a conclusion about a specific instance based on a known general premise or something known to be true. Inductive Reasoning The logical process of establishing a general proposition on the basis of observation of particular facts. © 2010 South-/Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

The Scientific Method Scientific Method Suggested steps: A set of prescribed procedures for establishing and connecting theoretical statements about events, for analyzing empirical evidence, and for predicting events yet unknown. Techniques or procedures used to analyze empirical evidence in an attempt to confirm or disprove prior conceptions. Suggested steps: Assess relevant existing knowledge of phenomenon Formulate concepts and propositions State hypotheses Design research to test the hypotheses Acquire empirical data Analyze and evaluate data Propose an explanation of the phenomenon and state new problems raised by the research © 2010 South-/Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.