3

Theory Building

©2013 Cengage Learning. All Rights Reserved. May

not be scanned, copied or duplicated, or posted to a
publicly accessible website,
©2013 in whole
Cengage or in part.
Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 What is a Theory?
• Theory
• A formal, logical explanation of some events
that includes predictions or how things relate
to one another.
• Goals of Theory
• Understanding
• Predicting

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 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

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 Ladder of Abstraction
• Ladder of Abstraction
• 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.

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 EXHIBIT 3.2 Concepts are Abstractions of
Reality

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 Research Propositions and Hypotheses
• 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.
• 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.

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 EXHIBIT 3.3 Hypotheses Are the Empirical Counterparts
of Propositions

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 Empirical Testing
• Empirical Testing
• 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 assess the variables of
interest.

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 Theory Building
• 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.

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 The Scientific Method
• Scientific Method • Suggested steps:
• A set of prescribed 1. Assess relevant existing
procedures for establishing knowledge of phenomenon
and connecting theoretical 2. Formulate concepts and
statements about events, for propositions
analyzing empirical evidence, 3. State hypotheses
and for predicting events yet
unknown. 4. Design research to test the
hypotheses
• Techniques or procedures
used to analyze empirical 5. Acquire empirical data
evidence in an attempt to 6. Analyze and evaluate data
confirm or disprove prior 7. Propose an explanation of
conceptions. the phenomenon and state
new problems raised by the
research

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