1. Scientific Methods for Management Science
Alexander Settles
Higher School of Economics

2. Class Web Site http://hse.ru/edu/courses/8375505.html
All reading and schedule posted there

3. Schedule 1. Introduction to the Class – September 7th
2. From Theory to Research & Introduction to Research Reviews – September 14th
3. Review of Most Citied Corporate Governance Research – September 21st
4. Research Design Choices and Causal Inferences – September 28th
5. Inferences Validity and Reliability – October 5th
6. Experiments & Quasi-experiments – October 12th
7. Review of Most Citied Management Research – October 19th
8. Survey Development & Qualitative Research Methods – October 26th
9. Models and Simulation Analysis & Levels of Analysis – November 2nd

4. Course Objectives Learn how to use the scientific method
Discuss your topic with fellow students
Find literature sources on management
Develop scholarly writing skills
Develop critical thinking skills
Instill research ethics

5. Course Objectives
Investigate professors that are potential dissertation advisors
Learn about human subjects issues
Develop bibliographic organization and citation skills
Prepare dissertation proposal

6. Purpose of this Seminar
Introduction to international research practices
Improve results of your dissertation work and encourage you take an entire year to work on your papers
Gain a working knowledge of methods of scientific analysis

7. Common mistakes of HSE students in pursuing research
Making the blanket statement that things in Russia are different so social science practices do not apply
Poor literature reviews
No methods – summaries of work experiences or essay format
No data to support or reject hypotheses
No conclusions

8. Course Requirements Homework Assignment – Research review
Research Proposal
Exam
Class attendance and participation

9. Overview of Course Structure
Introduction to the Class and Intro to Research Paper Structure
From Theory to Research
Research Design Choices and Causal Inferences
Validity and Reliability
Research Ethics and Content Analysis Research
Experiments
Quasi-experiments
Survey Development
Qualitative Research Methods
Models and Simulation Analysis
Levels of Analysis

10. Terms applied research basic research belief-based explanation
circular explanation (or tautology)
commonsense explanations
confirmation bias
deductive reasoning
hypothesis
pseudoscience
rational method
research
Science
scientific method
variable
applied research Research carried out to investigate a real-world problem.
basic research Research carried out primarily to test a theory or empirical issues.
belief-based explanation An explanation for behavior that is accepted without evidence because it comes from a trusted source or fits within a larger framework of belief.
circular explanation (or tautology) An explanation of behavior that refers to factors whose only proof of existence is the behavior they are being called on to explain.
commonsense explanations Loose explanations for behavior that are based on what we believe to be true about the world.
confirmation bias The human tendency to seek out information that confirms what is already believed.
deductive reasoning Reasoning that goes from the general to the specific. Forms the foundation of the rational method of inquiry.
hypothesis A tentative statement, subject to empirical test, about the expected relationship between variables.
method of authority Relying on authoritative sources (e.g., books, journals, scholars) for information.
parsimonious explanation An explanation or theory that explains a relationship using relatively few assumptions.
pilot study A small, scaled-down version of a study used to test the validity of experimental procedures and measures.
pseudoexplanation An explanation proposed for a phenomenon that simply relabels the phenomenon without really explaining it.
pseudoscience Claims that are made on the basis of evidence that is designed to appear scientific; such evidence is not based on the principles of the scientific method, however.
rational method Developing explanations through a process of deductive reasoning.
research The principal method for acquiring knowledge and uncovering the causes for behavior.
science A set of methods used to collect information about phenomena in a particular area of interest and build a reliable base of knowledge about them.
scientific explanation A tentative explanation for a phenomenon, based on objective observation and logic, and subject to empirical test.
scientific method The method of inquiry preferred by scientists. It involves observing phenomena, developing hypotheses, empirically testing the hypotheses, and refining and revising hypotheses.
scientist A person who adopts the methods of science in his or her quest for knowledge.
variable Any quantity or quality that can take on a range of values.

11. Is Management a Science?

12. Falsification and common sense
Falsification is a crucial concept. And the hypothetico-deductive method is the only method for theory verification in all the empirical sciences (Elster, 1983)
It is not incompatible with “common sense”
Theory construction is different from theory verification

13. Methodological ¨naïveté”
Naïve rationalism: the position that the aim of a scientific theory is to ‘explain’ observed phenomena
Naïve empiricism: belief that for a statement to be scientifically meaningful, it must be logically constructible out of terms which refer to immediate experience.
Naïve pragmatism: the idea that scientific knowledge should be immediately ‘useful’, possibly coming directly from experience, and that the sooner it is used, the better

14. Contents of a typical research paper
Title page : abstract, contents
Introduction
Literature Review
Description of work done and methods.
Results and Discussion.
Conclusions and Recommendations.
References and Bibliography.
Appendices.

15. Introduction Define what the problem is
The questions you are addressing
Outline personal/specific considerations that lead to this investigation
How it differs from previous work
What the report will contain
Perhaps some (hint) of the conclusions

16. Methods Describe the method or approach.
Justify that it is appropriate.
Establish constraints or assumptions.
Enable others to repeat the work and check the conclusions.
Link with the research question.
Motivate the work - what is its importance?
Establish approaches used in previous research - the literature search.

17. Where to Begin: Knowing things
Not so much about what we know, but HOW we know
Most of what we know is matter of belief and agreement
“Everybody knows that…”
But everybody “knew” the world was flat once
Other way of knowing…direct experience, observation
But when experience conflicts with agreement…
There is good chance that we’ll surrender our experience in favor of agreement
Methodology: special approach to inquiry
The science of finding out
How social scientists find out about human social life

18. Errors in inquiry Inaccurate observations Overgeneralization
Most daily observations are casual… not precise
Scientific observation is a conscious activity
Ex: instructor’s clothes; football toss
Overgeneralization
Assuming that a few similar events are evidence of a general pattern
Scientists guard against this by REPLICATION of inquiry
Selective observation
We assume a pattern exists then focus on future events that fit the pattern
Illogical reasoning
“Exception that proves the rule”
WHAT?...how can that be logical?

19. Foundations of social science: logic and observation
Theory, not philosophy or belief
Social theory has to do with what is, not with what should be...not so for many centuries.
Science cannot settle debates about values
Social regularities
Social affairs do exhibit a high degree of regularity, despite exceptions
Aggregates, not individuals
Regularities that social scientists study generally reflect the collective behavior of many individuals
A Variable Language
Attributes: characteristics or qualities that describe an object
Variables: logical groupings of attributes

20. Independent and Dependent Variables
Two concepts are implicit in causal or deterministic models
A dependent variable “depends” on an independent variable
That is, a change in the independent variable will produce a change in the dependent variable

21. Dialectics of Social Research: Inductive and Deductive Theory
Reasoning that moves from the particular to the general...from…
1. a set of observations to…
2. the discovery of a pattern that represents some degree of order among all the given events
Deductive
Reasoning that moves from the general to the specific...from…
1. a pattern that might be logically or theoretically expected to…
2. observations that test whether the pattern actually occurs

22. Dialectics of Social Research: Quantitative and Qualitative Data
Most simply put, difference is the distinction between numerical and non-numerical data
Every observation is qualitative at the outset
We quantify it to make it easier to aggregate, compare and summarize the data
Both types of data are useful and legitimate in management research

23. Elements of Social Theory
Law: universal generalization about classes of facts
Ex: law of gravity—bodies are attracted to each other in proportion to their mass and in inverse proportion to their distance
No social scientific laws that claim universal certainty
Theory: a systematic explanation for observations that relate to a particular aspect of social life...
For example someone might offer a theory of strategy, firm competitiveness, organization, etc.

24. Elements of Social Theory, p.2
Proposition: specific conclusions about the relationships among concepts that are derived from axiomatic groundwork
Hypothesis: a specified testable expectation about empirical reality that follows from a more general proposition
Research is designed to test hypotheses
Null hypothesis suggests that there is NO relationship among the variables under study

25. Traditional model of science
Theory
Operationalization
Specification of the exact operations involved in measuring a variable
For the researcher testing an hypothesis, the meaning of variables is exactly and only what the operational definition specifies
Must be specified with clarity in a way to make observation precise and rigorous
Observation
Systematic and rigorous gathering of data to test the hypothesis

26. Research Design Purposes of Research
Exploration: typically done for three purposes:
to satisfy the researcher’s curiosity and desire for better understanding
to test the feasibility of undertaking a more extensive study
to develop the methods to be employed in a subsequent study
Description: describe situations and events
Census is good example of descriptive research
Explanation: the “why?” of events, situations, behavior, attitudes, etc.

27. Logic of Nomothetic Explanation
Nomothetic explanation refers to the accounting of many variations in a given phenomenon
In contrast to…
Idiographic explanation that seeks an in-depth understanding of a single case

28. Criteria for Nomothetic Causality
Correlation: the variables must be correlated
Time order: the cause takes place before the effect
Non-spurious: the variables are non-spurious
Spurious relationship: a coincidental statistical correlation between two variables, shown to be caused by some third variable

29. Correlation
Some relationship---or correlation—between the variables must exist before we can consider causality
Correlation: empirical relationship between two variables such that…
Changes in one are associated with changes in the other
Particular attributes of one variable are associated with particular attributes of the other

30. False Criteria for Nomothetic Causality
Complete causation
Causation is incomplete and probabalistic
Exceptional cases
Exceptional cases do not disprove general overall pattern of causation
Majority of cases
Causal relationship may be true even if they don’t apply to the majority of cases

31. Necessary and Sufficient Causes
Necessary cause represents a condition that must be present for the effect to follow
Ex: must be female to become pregnant
Ex: must take college courses to get a degree…but…
Simply taking courses is not a sufficient cause
Must take the right ones

32. Necessary and Sufficient Causes
Sufficient cause represents a condition that, if it is present, guarantees the effect in question
Not saying that sufficient cause is only possible cause for effect
Ex: skipping exam in course would be sufficient cause for failing, but students could fail in other ways, too
So, cause can be sufficient but not necessary

33. Units of Analysis No limit to what or whom can be studied
Common social science units of analysis:
Individuals
Groups
Organizations
Social artifacts.
Important: what you “call” a given unit of analysis is almost irrelevant—but you must be clear what that unit “is”
Country level effects or the firms that operate in that country?
Firm level strategy or country level strategy?
Efficiency of the hotel or the satisfaction of customers?

34. Reductionism
Tendency to explain everything in terms of a particular, narrow set of concepts
Remember paradigms that predispose researcher to a particular explanation
Definition of order by coercion, shared values, exchange

35. Conceptualization, Operationalization & Measurement
The refinement and specification of abstract concepts
A specific agreed-upon meaning of the concept under study
Operationalization
The development of specific research procedures (operations) that will result in empirical observations representing those concepts in the real world

36. Indicators and Dimensions
An observation that we consider as a reflection of the variable under study
Ex: attending church as an indicator or religiosity
Dimension
A specific aspect of a concept
Ex: action aspects of religiosity (attending church, giving money) and contemplative aspects (prayer, etc)

37. Basic Research Outline*
The Problem
Present a clear, brief statement of the problem, with concepts defined where necessary
Show that the problem is limited to bounds amenable to treatment or test
Describe the significance of the problem with reference to specific criteria
Source: Miller, Delbert C Handbook of Research Design and Social Measurement, 5th Edition. Newbury Park: Sage Publications, pp

38. Basic Research Outline
The Theoretical Framework
Describe the relationship of the problem to a theoretical framework
Demonstrate the relationship of the problem to previous research
Present alternate hypotheses considered feasible within the framework of the theory.

39. Basic Research Outline
The Research Question/Hypotheses
Clearly state the research questions or the hypotheses selected for test. (Null and alternate)
Indicate the significance of test hypotheses to the advancement of research and theory.
Define concepts or variables (preferably in operational terms).
Describe possible mistakes and their consequences.
Note seriousness of possible mistakes.

40. Basic Research Outline
Design of the Experiment or Inquiry
Describe ideal design or designs with particular attention to the control of interfering variables
Describe selected operational design
Specify statistical tests including dummy variables

41. Basic Research Outline
Sampling Procedures
Describe experimental and control samples
Specify method of drawing or selecting sample

42. Basic Research Outline
Methods of Gathering Data
Describe measures of quantitative variables showing reliability and validity when these are known. Describe means of identifying qualitative variables
Include descriptions of questionnaires or schedules
Describe interview procedure
Describe use made of pilot study, pretest, trial run.

43. Basic Research Outline
Working Guide
Prepare working guide with time and budget estimates
Estimate total person-hours and cost

44. Basic Research Outline
Analysis of Results
Specify methods of analysis

45. Basic Research Outline
Interpretation of Results
Discuss how conclusions will be fed back into theory…OR…
Inform policy/practice.

46. Basic Research Outline
Publication or Reporting Plans...Communication Plans
Monograph, Executive summary
Testimony to policy makers.
Presentations to institutions, non-governmental agencies, media, public.
Journal publication