1. Theory Building Some highlights

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

3. 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

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

5. Abstraction Concepts abstract reality –Are expressed in words that refer to various events or objects –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.

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

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

8. 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

9. 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.

10. 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.

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

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

13. 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.

14. Research questions Are often used when you are not sure of a specific hypothesis, you need to generalise Helps focus on the problem and identifies what can be measured Whereas there is normally a single hypothesis, there are normally multiple research questions

15. 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!

16. 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!

17. Double Movement of reflexive thought Induction occurs when we observe a fact and ask “why” To answer this we develop a tentative hypothesis as the explanation Deduction is the process whereby we test the hypothesis

18. 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