Research & Theory

What is
Theory ???
• A theory is a well-supported explanation of a phenomenon or set of phenomena.
• It is not simply an educated guess or a random idea, but a framework of ideas and concepts
that have been developed and tested over time through research and experimentation.
• In science, a theory is a well-established and widely accepted explanation of natural
phenomena that is supported by a large body of evidence.
• Theories are typically based on observations and experimentation, and they can be used to
make predictions about future observations or experiments.
• Theories can be used in many fields, including physics, chemistry, biology, psychology,
sociology, and economics, among others.
• They provide a way for researchers to organize and understand the world around them, and
they can also be used to guide research and develop new technologies.
• A theory is not the same as a hypothesis, which is an initial idea or explanation that has yet
to be fully tested and supported by evidence.
• A theory is a more developed and well-supported explanation that has withstood rigorous
testing and scrutiny.
What qualities should a good theory Posses ?
• Applicability: A good theory should be applicable in a wide range of contexts
and situations. For example, the contingency theory of leadership suggests that
the most effective leadership style depends on the specific situation and
context in which it is applied.
• Relevance: A good theory should be relevant to current issues and challenges
facing organizations and financial systems. For example, the efficient market
hypothesis in finance is still relevant today as it suggests that financial markets
are efficient and that it is difficult to consistently beat the market.
• Clarity: A good theory should be clear and easy to understand, with
straightforward explanations of concepts and ideas. For example, the theory of
motivation in management proposes that people are motivated by a
combination of intrinsic and extrinsic factors, and this idea is easy to
understand and apply in practice. Cont………..
What qualities should a good theory Posses ?
• Empirical support: A good theory should be supported by empirical evidence
from research and data analysis. For example, the capital asset pricing model
(CAPM) in finance is supported by empirical studies that show a positive
relationship between the expected return on an investment and its systematic
risk.
• Testability: A good theory should be testable through experiments and
observation, with clear hypotheses that can be verified or falsified. For
example, the theory of agency in management can be tested through
experiments that measure the impact of different types of incentives on
employee behavior.
• Practicality: A good theory should be practical and applicable in real-world
situations, with clear guidelines for how to apply the theory in practice. For
example, the contingency theory of leadership provides practical guidance on
how to adapt leadership styles to different situations and contexts.
What Theory is not???
• A theory is not a mere opinion or belief that is not based on evidence. For
example, a manager's belief that open offices increase productivity is not a
theory, but rather a personal opinion without supporting evidence.

• It is not a guess or speculation without any supporting facts or data. For

example, speculating that a particular marketing campaign will be successful
without any market research or data to support the claim is not a theory.

• A theory is not an absolute truth, but rather a framework of ideas that is

subject to change as new evidence emerges. For example, the resource-based
view theory of the firm in management is not an absolute truth, but rather a
framework that has been refined and modified over time as new evidence has
emerged. Cont……
What Theory is not???
• A theory is not the same as a law, which is a statement that describes a natural
phenomenon or relationship, but does not necessarily explain why it occurs. For
example, the law of diminishing returns in economics describes the relationship
between inputs and outputs, but does not explain why this relationship exists.

• A theory is not something that can be proven with absolute certainty, but rather is
supported by evidence and the absence of evidence to the contrary. For example,
the theory of consumer behavior in marketing is supported by empirical evidence
and research studies, but it is not proven with absolute certainty.

• A theory is not a static concept, but is continually refined and modified based on
new evidence and advancements in understanding. For example, the theory of social
responsibility in management has been refined over time to incorporate new ideas
and evidence about the responsibilities of businesses to society and the
environment.
Why do we need Theory in Research ???
• Theory provides a framework for understanding and interpreting research findings,
helping researchers make sense of their results. For example, in management
research, the contingency theory provides a framework for understanding how
different management practices are effective in different situations.

• Theory helps researchers develop hypotheses and research questions, guiding the
direction of their research. For example, the resource-based view theory in
management has led to research on how firms can develop and leverage their
resources and capabilities for competitive advantage.

• Theory helps researchers identify relevant variables and relationships to study,

ensuring that their research is focused and relevant. For example, in marketing
research, the theory of planned behavior provides a framework for understanding
how consumer attitudes and intentions influence their purchasing behavior.
Cont………
Why do we need Theory in Research ???
• Theory provides a basis for comparing and contrasting research findings across
different studies, helping to build a cumulative body of knowledge. For example, the
transaction cost economics theory in management has been used to compare
different organizational forms and their transaction costs across different industries.

• Theory helps researchers generate new ideas and hypotheses for future research,
driving the development of new theories and the refinement of existing ones. For
example, research on the resource-based view theory has led to the development
of the dynamic capabilities theory, which focuses on how firms can adapt and
change their resources and capabilities over time.

• Theory provides a basis for practical application, helping researchers develop

interventions and recommendations for practice. For example, research on the
contingency theory in management has led to recommendations for how managers
can adapt their management practices to fit different situations and contexts.
Are Theory and Research compliments or supplements ?
• Research is used to test and validate theories. For example, research studies
can be used to test the effectiveness of different teaching methods, which can
validate or refute theories about effective teaching.

• Theory provides a framework for research. For example, the social learning
theory can be used to guide research on how individuals learn through
observation and imitation.

• Research can lead to the development of new theories. For example, research
on the effectiveness of certain psychotherapeutic interventions can lead to
the development of new theories about the underlying mechanisms of
change.
Cont………..
Are Theory and Research compliments or supplements ?
• Theory can guide the selection of research methods. For example, the
cognitive dissonance theory can guide the selection of research methods to
study the relationships between attitudes and behavior.

• Research can refine and modify theories. For example, research on the
bystander effect can lead to the refinement of the theory to incorporate new
evidence about the factors that influence whether or not people intervene in
emergencies.

• Theory can guide the interpretation of research findings. For example, the
social identity theory can be used to interpret research findings on intergroup
conflict and cooperation.
Parts or Components of Theory :
• Concepts
• Constructs
• Variables
• Operational Definition
• Propositions
• Hypothesis
• Models
Concept and Construct Construct:
Concept: • A construct is an abstract and complex
• A concept is an abstract or general variable that cannot be directly observed, but
idea that represents a phenomenon, is often used to explain relationships
object, or event. Concepts are often between different concepts. Constructs are
used in research to help understand often defined as hypothetical variables or
factors that are operationalized through
and classify phenomena, and can be specific measures or indicators. For example,
directly observable or measured. For "intelligence" is a construct that cannot be
example, "happiness" is a concept directly observed, but can be operationalized
that represents an abstract idea of a through measures such as IQ tests, academic
positive emotional state. performance, and problem-solving abilities.
Comparison:
Concepts and constructs are similar in that they both represent abstract ideas or phenomena. However, constructs are
more complex than concepts and are often used to explain relationships between different concepts. While concepts can
be directly observable or measured, constructs are not directly observable and must be operationalized through specific
measures or indicators. In the example of "happiness" and "intelligence", happiness is a concept that can be directly
observed and measured through surveys or self-report measures, while intelligence is a construct that cannot be directly
observed and must be operationalized through specific measures or indicators such as IQ tests or academic performance.
Variables :
• Variables are measurable characteristics or attributes that can take on
different values or levels. In research, variables are used to
operationalize the concepts or constructs that are being studied.

Concept
Customer loyalty

Construct
Brand loyalty Variables
-Purchase frequency
-Purchase quantity
- Brand advocacy
- Switching behavior
- Emotional attachment
 CONCEPT (LOVE)

Intimacy Commitment

- Attachment - Relationship Dedication

- Communication pattern - Relationship longevity
- Reln Satisfaction
Types of Variables :
• Independent variable: The variable that is manipulated or controlled in a
study. It is the variable that is hypothesized to have an effect on the dependent
variable. Example: The amount of fertilizer applied to a plant is the
independent variable.

• Dependent variable: The variable that is measured or observed in response to

changes in the independent variable. Example: The growth of the plant is the
dependent variable.

• Control variable: The variable that is held constant in a study to ensure that
only the independent variable is affecting the dependent variable. Example: In
a study examining the effect of fertilizer on plant growth, the type of soil used
can be a control variable.
Types of Variables :

• Moderator variable: The variable that affects the relationship between the
independent and dependent variables. Example: In a study examining the
effect of exercise on stress, the age of participants could be a moderator
variable.

• Mediator variable: The variable that explains the relationship between the
independent and dependent variables. Example: In a study examining the
effect of a new medication on reducing symptoms of a disease, the mechanism
of action of the medication could be a mediator variable.
Types of Variables :
• Confounding variables:
• A confounding variable is an extraneous variable that is related to both the independent and dependent
variables, and can therefore influence the observed relationship between them. Confounding variables
can lead to inaccurate or misleading conclusions about the true relationship between variables.
• Example: A researcher wants to investigate the relationship between coffee consumption and the risk of
heart disease. However, the age of the participants could be a confounding variable, as older
participants are more likely to have heart disease and may also be more likely to consume coffee. In this
case, the researcher should control for age to eliminate its confounding effect on the observed
relationship.

• Extraneous variables:
• An extraneous variable is any variable that is not of primary interest in the study but could still
affect the outcome of the study. Extraneous variables are important to identify and control for, as
they can affect the internal validity of the study.
• Example: A researcher wants to investigate the effects of a new teaching method on student
performance in math. However, the time of day that the students are tested could be an extraneous
variable, as students may perform better or worse at different times of the day. In this case, the
researcher should control for the time of day that the tests are administered to ensure that it does
not affect the observed relationship between the teaching method and student performance.
 Moderating Variable
Motivation, personality Traits

Independent Variable Dependent Variable

Education, Genetics Level of Intelligence

Confounding Variable
Socio economic status, nutrition

Extraneous Variable
Age, Sex,……..
Mediating Variable
Cognitive Skills
Other Types of Variables :

• Categorical variable: A variable that is divided into categories or groups.

Example: Gender, race, and occupation are categorical variables.

• Ordinal variable: A categorical variable where the categories can be ranked or

ordered. Example: Educational level, such as high school, college, and
graduate school, is an ordinal variable.

• Continuous variable: A variable that can take on any value within a range.
Example: Height, weight, and temperature are continuous variables.
Operational Definition:
• A clear and concise explanation of how a researcher defines and measures a
concept or variable in a research study
• Specifies the procedures and criteria that will be used to measure or observe
the variable or concept being studied
• Helps to make the measurement process more objective and reliable
• Should be specific, measurable, and observable
• Typically includes details about the method of measurement or observation,
the instruments used, and the criteria for interpreting the results
• May be different for different studies or researchers, depending on the
research question, context, and methods used
• Helps to ensure that researchers are measuring what they intend to measure,
and that the results are accurate and meaningful.
Example of Operational Definition
Variable: Exercise

• Operational Definition:
• Type of exercise: Aerobic exercise performed for at least 30 minutes, three
times per week
• Intensity of exercise: Target heart rate of 60-80% of maximum heart rate
• Duration of exercise: Measured in minutes using a stopwatch
• Frequency of exercise: Number of exercise sessions per week
• Setting of exercise: Gym, home, or outdoor location
• Participants' self-reported exercise log or heart rate monitor used to track
adherence to exercise program
• Outcome measure: Change in weight (measured in pounds) over 12 weeks
Example of Operational Definition
Variable: Brand Loyalty

Operational Definition:

• Definition: A consumer's tendency to consistently purchase products or services from a

particular brand over time
• Measurement method: Self-reported survey responses or purchase behavior data analysis
• Timeframe: Typically measured over a specific period, such as the past six months or one
year
• Type of product or service: Specific brand and product or service category being analyzed
• Response options: Multiple-choice questions or Likert scale items, such as "How likely are
you to buy [Brand X] again in the future?"
• Outcome measure: Brand loyalty score, calculated based on the frequency and
consistency of brand purchases or survey responses
Example of Operational Definition
Variable: Return on Investment (ROI)
• Operational Definition:
• Calculation method: Net gain or loss divided by the initial investment amount,
expressed as a percentage
• Timeframe: Typically measured over a specific period, such as a month,
quarter, or year
• Type of investment: Stocks, bonds, real estate, etc.
• Method of data collection: Review of financial statements, investment
portfolio, or market reports
• Outcome measure: ROI percentage, expressed as a numerical value or
graphically represented
Proposition:
• A proposition is a statement that asserts a relationship between two or more
concepts or variables.
• It is a tentative statement that can be tested through further research and
analysis.
• Propositions are often used to build theories or models that explain complex
phenomena or relationships between variables.
• Propositions are specific and narrow in scope, focusing on a single question
or problem.
• For example :
• Proposition: Increasing the amount of sunlight a plant receives will increase its
growth.
• Proposition: Increased physical activity leads to better mental health.
• Proposition: Increasing the number of hours worked per week decreases job
satisfaction.
Hypothesis:
• A hypothesis is a statement or idea that is proposed to explain a phenomenon or set of
phenomena.
• It is a testable prediction or educated guess about the relationship between two or
more variables.
• A hypothesis typically includes both an independent variable (the variable that is being
manipulated or tested) and a dependent variable (the variable that is being measured
or observed).
• Hypotheses are usually based on existing knowledge or theory and are used to guide
research or experimentation.
• They are often formulated as an "if-then" statement, where the researcher predicts
what will happen to the dependent variable if the independent variable is manipulated.
• Hypotheses must be testable through empirical research or experimentation in order to
be considered valid.
• Hypotheses can be supported or rejected based on the results of the research or
experimentation.
Hypothesis:
• Proposition: Increasing the frequency of social media posts will increase
engagement with the brand.
• Hypothesis: Increasing the frequency of social media posts to 3 posts per day
will result in a 20% increase in engagement rate compared to 1 post per day.
• Proposition: Increasing the interest rate on savings accounts will lead to
higher deposits from customers.
• Hypothesis: Increasing the interest rate on savings accounts from 0.5% to 1%
will result in a 20% increase in total deposits over the next quarter.
Where do theories come from ?