Theory Building, Business Research Process and Types

and Problem Definition

You enter in your apartment which you are sharing
with your friend; switch on the bulb and nothing
happens. What will you think?

 Is
I it burnt
b t out?
t?
 Did the fuse of the apartment went off?
 Did my friend forgot to pay the bill?
 Is it a power cut?

The sequence in which the above thoughts will occur depend on what?
 Theory
 A formal, logical/testable explanation of some events that
includes predictions of how things relate to one another.

 Simple generalization that help understand reality.

 Allows to understand the logic behind observed things.

 Enables to predict the behavior/characteristics of one

phenomenon from the knowledge of another.
Why Edison as a child was sitting on goose’s eggs?
 Was it foolishness?
 If not
not, why this behavior? What was he doing?

He had built a theory (what theory and how?) and was testing it.
 How can theory be built?
 through a process of reviewing previous findings of similar studies
or situations;
 logical deductions; and/or
 knowledge of applicable theoretical areas etc. Ex., Risk attitude of
older people, knowledge of insurance and what insurance does.

 Importance?
 Before setting research objectives, the researcher must be able to
describe the business situation in some coherent way. Ex: Jelly Beans

 Goals of Theory?
 Understanding – Ex: What caused financial crisis? Does organizational
situation influences leadership style?
 Predictingg – Ex: Older p
people
p will buy y insurance;; next few yyears are
going to be recession.
S
Source: Zikmund
 Zik d et al.2016
t  l 6
 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
 Ladder
adde of
o Abstraction:
bst act o (based o
on tthe
e following
o o g figure
gu e bu
build
d a ttheory
eo y
and explain what is ladder of abstraction?)
 Organization of concepts in sequence from the most concrete and
individual to the most general.
g

Source: Zikmund et al.2016
 Abstract Level
 The level of knowledge
g expressing
p g a concept
p that exists only
y as
an idea or a quality apart from an object.

 Empirical Level
 The level of knowledge that is verifiable by experience or
observation.
Source: Zikmund et al.2016
 Propositions
 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.
 Can the above be tested? If yes, how?

 Hypothesis
 Formal statement of an unproven proposition that is empirically
testable.

 Example: Giving employees one Friday off each month will

p y turnover.
result in lower employee
S
Source: Zikmund
 Zik d et al.2016
t  l 6
Source: Zikmund et al.2016
 Empirical
p Testing
g
 Examining a research hypothesis against reality using data.

Source: Zikmund et al.2016

 Variables
 Anything that may assume different numerical values.
 The empirical assessment of a concept.
 Deductive 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
facts.

 The 3 steps
 Observation
Ob ti (h(helps
l iin d
developing
l i concepts/constructs)
t / t t )
 Classification/categorization (based on attributes)
 Association/defining relationships (explore the interrelationship
b t
between the
th classified
l ifi d attributes
tt ib t and
d th
the outcomes)
t )
Some of you who attended the previous session of BRM were not
pretty sure whether you will finally take it.

So, when you came to last session, what were you doing?

 Exploratory research?
 Descriptive research?
 Causal research?
 What was the research objective?
j
 Exploratory Research
 Conducted to clarify ambiguous situations or discover ideas that
may be potential business opportunities.
 Initial research conducted to clarify and define the nature of a
problem.
 Does not provide conclusive evidence
 Subsequent research expected
 Describes characteristics of objects, people, groups, organizations,
or environments.
i

 Addresses who, what, when, where, why, and how questions.

 Considerable
C id bl understanding
d t di off ththe nature
t off th
the problem
bl
exists.
 Does not provide direct evidence of causality.
Examples

 The average Weight Watchers’ customer

 Is a female about 40 years old
 Has a household income of about $50,000
 Has at least some college education
 Is trying to juggle children and a job

 Characteristics of leaders
 Empathetic
 Resourceful
 Ability
Abilit tto d
delegate
l t
 Research conducted to identify cause and effect relationships
(inferences).

 Prerequisites of causality:
 Temporal sequence—the appropriate causal order of events.
 Concomitant variation
variation—two
two phenomena vary together.
 Non-spurious association—an absence of alternative plausible
explanations.
 Degrees of Causality
 Absolute Causality
 The cause is necessary and sufficient to bring about the effect.

 Conditional Causality
 A cause is necessary but not sufficient to bring about an effect.

 Contributory
y Causalityy
 A cause need be neither necessary nor sufficient to bring
about an effect.
 Weakest form of causality.
y
Source: Zikmund et al.2016
Source: Zikmund et al.2016
 Problem Definition
The process of defining and developing the key question(s) that the
research user wishes to answer.

 Problem
When there is a difference between the current conditions and a more
preferable set of conditions.

 Problems Mean Gaps
Business performance is worse than expected business performance.
Source: Zikmund et al.2016
 Situation Analysis
 The gathering of background information to familiarize
researchers and managers with the environment.

 Interview Process
 Develop many alternative problem statements
 Make lists
 Be open-minded
p

 Identifying Symptoms
 Interrogative techniques – asking multiple questions about what
has changed.
 Probing – technique to draw deeper and more elaborate
explanations from the discussion
 Unit of Analysis

 Indicates what or who should provide the data and at what level
of aggregation.
 Individuals ((such as customers, employees,
p y and owners))
 Households (families, extended families, and so forth)
 Organizations (businesses and business units)
 Departments (sales, finance, and so forth)
 Geographical areas
 Objects (products
(products, advertisements
advertisements, and so forth)
forth).

 Multi
Multi-level
level analysis studies variables measured at more than one
unit of analysis.
• Continuous variable
▫ Can take on a range of
quantitative values.
• Categorical variable
▫ Indicates membership in
some group.
▫ Also called classificatory
variable.
• Dependent variable
▫ A process outcome or a
variable that is predicted
and/or explained by other
variables
variables.
• Independent variable
▫ A variable that is expected
to influence the dependent
variable in some way.
 Research Questions
 Research objectives
j in terms of q
questions that can be addressed
by research.
 The researcher’s translation of the problem into a specific inquiry.
 Help to develop well-formulated
well-formulated, specific hypotheses that can be
empirically tested.
 Help the researcher design a study that will produce useful
results.
results
Finally, whatever you do, how much effort you put , what 
will happen to you is whatever is written in your 
destiny by GOD.
(Wh  i   h   b  d
(What is the above description?)
i i ?)
(Who developed it?)
(C  it b  t t d?)
(Can it be tested?)
(So, is it true?)
(If you say no proof  I will say: The absence of proof is 
(If you say no proof, I will say: The absence of proof is 
not the proof of absence)
(Unfortunately, what I am saying is also a 
(Unfortunately, what I am saying is also a _________). ).
Thank You