Chapter 5—Theory Building

TRUE/FALSE

1. A theory is an informal, untestable explanation of some events.

Ans: F Dif: Moderate Ref: Page

2. Understanding and predicting are the two purposes of theory.

ANS: T Dif: Moderate REF:

3. Risk aversion is an example of a concept.

ANS: T Dif: Moderate REF:

4. The Ladder of Abstraction models the organization of concepts in sequence, from the
most concrete and individual to the most general.

ANS: T Dif: Moderate REF:

5. Propositions are statements concerned with the relationships among concepts.

ANS: T Dif: Moderate REF:

6. A concept is a formal statement explaining some outcome.

ANS: F Dif: Easy REF:

7. A hypothesis is a formal statement explaining some outcome.

ANS: F Dif: Easy REF:

8. A research hypothesis is a proposition that is empirically testable.

ANS: T Dif: Easy REF:

9. Empirical testing is the process of examining reality using data.

ANS: T Dif: Easy REF:

10. A variable is a characteristic with only one value.

ANS: F Dif: Easy REF:

 11. In most situations there are alternative theories to explain certain phenomena.

ANS: T Dif: Moderate REF:

12. Deductive reasoning is the logical process of deriving a conclusion about a specific
instance based on a known general premise or something known to be true.

ANS: T Dif: Moderate REF:

13. Inductive reasoning is the logical process of establishing a general proposition on the
basis of observation of particular facts.

ANS: F Dif: Moderate REF:

14. The scientific method is a set of prescribed procedures for establishing and connecting
theoretical statements about events, for analyzing empirical evidence, and for predicting events yet
unknown.

ANS: T Dif: Moderate REF:

15. In the four frameworks approach to the research project, the first framework is the
conceptual framework.

ANS: T Dif: Easy REF:

16. The conceptual framework provides direction and focus for the three remaining frameworks.

ANS: T Dif: Easy REF:

17. The remaining three frameworks are the propositions framework, the constructs framework, and
the empirical framework.

ANS: F Dif: Easy REF:

18. Theories allows us to generalize beyond individual facts or isolated situations.

ANS: T DIF: Moderate REF:

19. Theories provide a framework that can guide strategy by providing insights into general rules of
behavior.

ANS: T DIF: Moderate REF:

20. A good theory allows us to generalize beyond individual facts so that general patterns may be un-
derstood and predicted.

 ANS: T DIF: Moderate REF:

21. All science is concerned with the expansion of knowledge and the search for truth. Theory building
is the means by which researchers hope to achieve this purpose.

ANS: T DIF: Easy REF:

22. Theories are simply generalizations that help us better understand reality.

ANS: T DIF: Easy REF:

23. Theories allow us to understand the logic behind the things we observe.

ANS: T DIF: Easy REF:

24. If a theory does not hold true in practice, then the theory has no value.

ANS: T DIF: Easy REF:

25. The theoretical framework is the second framework in the four frameworks approach to the re-
search project.

ANS: T DIF: Easy REF:

MULTIPLE CHOICE

1. Psychologists explain that humans’ better recall of information that is presented visu-
ally compared to information presented verbally is due to the fact that the information is stored both
visually and verbally. Because it is stored using this dual-coding process, it is easier to retrieve from
memory. This formal logical explanation of this phenomenon is an example of a(n):
a. Theory
b. Construct
c. operationalization
d. Latency

ANS: A DIF: Easy REF:

2. What are the two goals of theory?

a. speculation and confirmation
b. understanding and predicting
c. deducting and inducting
d. abstraction and concretization

ANS: B DIF: Easy REF:

 3. Leadership, which is a generalized idea about a human trait, is an example of a(n):

a. Hypothesis
b. Proposition
c. Concept
d. abstraction

ANS: C DIF: Easy REF:

4. The organization of concepts in sequence from the most concrete and individual to the
most general is called the:
a. conceptual hierarchy
b. ladder of abstraction
c. conceptual progression
d. operationalization of constructs

ANS: B DIF: Moderate REF:

5. In theory development, which of the following is the level of knowledge expressing a

concept that exists only as an idea or a quality apart from an object?
a. empirical level
b. primary level
c. conceptual level
d. abstract level

ANS: D DIF: Easy REF:

6. At what level do we “experience” reality?

a. empirical level
b. abstract level
c. primary level
d. secondary level

ANS: A DIF: Easy REF:

7. Theories are simply generalizations that help us understand

a. reality
b. science
c. research
d. research methods

ANS: A DIF: Easy REF: p.

 8. Which of the following is a statement explaining the logical linkage among certain
concepts by asserting a universal connection between concepts?
a. hypothesis
b. proposition
c. construct
d. theory

ANS: B DIF: Moderate REF:

9. “Employees dressed professionally will generate greater sales than those dressed casu-
ally” is an example of a:
a. theory
b. proposition
c. hypothesis
d. variation

ANS: C DIF: Easy REF:

10. When a researcher collects data to test a theory, what is this testing called?
a. confirmatory testing
b. empirical testing
c. conceptualization
d. deductive testing

ANS: B DIF: Easy REF:

11. Which of the following is one of the four frameworks?

a. Hypothesis framework
b. Conceptual framework
c. Construct framework
d. Item framework

ANS: B DIF: Easy REF:

12. The process of creating a theoretical framework involves:

a. A literature review
b. Empirical testing
c. Hypothesis testing

 d. Data analysis

ANS: A DIF: Easy REF:

13. _____ is the logical process of deriving a conclusion about a specific instance based
on a known general premise or something known to be true.
a. Deductive reasoning
b. Inductive reasoning
c. Latent reasoning
d. Abstract reasoning

ANS: A DIF: Moderate REF:

14. If all the trees a person has seen in his life have been green and therefore he concludes
that all trees are green, which type of reasoning is he using?
a. deductive reasoning
b. inductive reasoning
c. generalized reasoning
d. conceptual reasoning

ANS: B DIF: Moderate REF:

15. A researcher is testing the hypothesis stating a positive relationship between con-
sumers’ attitudes toward a brand and their intention to purchase that brand. To test this, she uses a set
of prescribed procedures for establishing and connecting theoretical statements about these two con-
structs, for analyzing empirical evidence gathered through surveys, and for predicting future purchas-
es. This researcher is following the:
a. hypothetical method
b. scientific method
c. deductive method
d. inductive method

ANS: B DIF: Easy REF:

16. Which of the following is a step involved in the application of the scientific method?
a. statement of hypotheses
b. formulation of concepts and propositions
c. analysis and evaluation of data
d. all of the above

ANS: D DIF: Easy REF:

 17. What is the LAST step in the application of the scientific method?
a. assessment of relevant existing knowledge of a phenomenon
b. proposal of an explanation of the phenomenon and statement of new problems raised by the
research
c. design of research to test the hypothesis
d. acquisition of meaningful empirical data

ANS: B DIF: Easy REF:

18. ____________________ are the building blocks of theory.

a. Concepts
b. Propositions
c. Data
d. Researchers

ANS: A DIF: Easy REF:

21. The organization of concepts in sequence from the most concrete and individual to the
most general is called the ____________________.

a. ladder of abstraction
b. the conceptual framework
c. the theoretical framework
d. the analytical framework

ANS: A DIF: Easy REF:

22. In theory development, the level of knowledge expressing a concept that exists only as
an idea or a quality apart from an object is the ____________________ level.
a. concrete
b. abstract
c. artistic
d. theoretical

ANS: B DIF: Easy REF:

23. A(n) ____________________ is a formal statement explaining some outcome and is

testable.

a. Concept
b. Hypothesis
c. Research statement
d. Method

ANS: A DIF: Easy

Di REF:

 24. Go ing from the general to the specific is done in ____________________. reasoning.

a.Academic
b.Theoretical
c.Deductive
d.Inductive

ANS: C DIF: Easy REF:

25. ____________________. reasoning establishes a general proposition on the basis of

observation of particular facts.

a.Academic
b.Theoretical
c.Deductive
d.Inductive

ANS: D DI DIF: Easy REF:

SHORT ANS

1. What is a theory, what are its goals, and why is it useful to business researchers?

ANS:
A theory is a formal, logical explanation of some events that includes predictions of how things relate
to one another. The two purposes of theory are understanding and predicting. Accomplishing the first
goal allows the theorist to gain an understanding of the relationship among various phenomena. Thus
a theory enables us to predict the behavior or characteristics of one phenomenon from the knowledge
of another phenomenon.

DIF: Easy REF:

2. Compare and contrast the terms concept and variable and give an example of each.

ANS:
A concept (or construct) is a generalized idea about a class of objects, attributes, occurrences, or pro-
cesses that has been given a name. Supervisory behavior or risk aversion are examples of concepts. A
variable is anything that may assume different numerical values and is the empirical assessment of a
concept. For example, supervisory behavior may be assessed through variables such as amount of
time spent training employees, number of employees supervised, and degree to which employees are
involved in decision-making.

DIF: Easy REF:

3. How does a hypothesis differ from a proposition?

ANS:
Propositions are statements explaining the logical linkage among certain concepts by asserting a uni-
versal connection between concepts. A hypothesis is a formal statement of an unproven proposition
that is empirically testable.

DIF: Easy REF: