chapter 2-theory building

8/3/2019 Chapter 2-Theory Building

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Research Methodology

Chapter 2Theory Building

Mrs. Suprika V Shrivastava, Assistant Professor, SCIT


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Business research is based on sound reasoning.

This process involves induction, deduction, observation, andhypothesis testing combined in a systematic way.

Essential tenets of scientific research are:

Direct observation of henomena.

Clearly defined variables, methods, and procedures.

Empirically testable hypotheses.

. Statistical rather than linguistic justification of conclusions.

The self-correcting process.

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Another important term is empirical testing or empiricism: to

experience and/or derived from such experience by methods ofinductive logic, including mathematics and statistics term.

Researcher uses an approach to describe, explain, and make

predictions based on information gained through observations. Based on the predictions, managers need to take decisions.

Critical thinking for managers : reasoning for whatever you say.

Two types of reasoning :deduction and induction

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Arguments are of two types: deduction and induction

Deduction: is a form of argument, where the conclusions mustnecessarily follow from the reasons given.

There is a strong relation between reason and conclusions.

For deduction to be correct, it must be both true and valid.

Premises reason iven for the conclusion must a ree withthe real world (true).

The conclusion must necessarily follow from the premisesvalid

The deduction is valid if it is impossible for the conclusion to befalse if the premises are true.

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E.g. 1:

managers are uman e ngs. rem ses

Steve is a manager (Premises 2)

Steve is a human being (conclusion)

E.g. 2:

All men are mortal. remise 1

Socrates was a man. (premise 2)

Socrates was mortal. (conclusion)

E.g. 3: Availability of jobs in urban areas causes the migration ofpeople.

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Based on the established facts you have some conclusions


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Radically different; there is no strength of relationship between.

You draw conclusion from one or more particular facts orpieces of evidence.

e conc us ons suppor s ac s, an e ac s suppor sconclusions.

n n uc ve argument s one n w c t e prem ses aresupposed to support the conclusion in such a way that if thepremises are true, it is improbable (unlikely to be true or to

. Thus, the conclusion follows probably from the premises and

inferences. (source:

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. . .


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E.g. 1:

ocra es was ree . prem se

Most Greeks eat fish. (premise)

Socrates ate fish. (conclusion)

In this example, even if both premises are true, it is stillpossible for the conclusion to be false (maybe Socrates was

allergic to fish, for example). (source:p: a e sm.a ou .com o cr ca n ng a e uc vearg. m

E.g.:

A stock broker observes price of gold rising with hijacking,

m ary a ac s. ac s Stock broker may induce from empirical observations that the

price of gold is related to political stability. (conclusion). (zikmund)

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E.g.:

sales did not increase durin or after the romotional cam ai n.

Conclusion: promotional campaign was poorly executed, sales will notincrease.

The conclusion is only a hypothesis

There may be other explanations also.

Retailers did not have sufficient stock to fulfill the customers request.

A hurricane came which closed all the retail shops. .

Inductive conclusion is an inferential jump beyond the evidence presented-one conclusion explains the fact that no sale increase happened.

Other conclusions may also do so. Or may be non of these may support thefact.

There is always a doubt in the findings from induction.

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. . .


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With deductive arguments, our conclusions are already

, , .

Strengthen the known facts.

This means that we don't arrive at new information at best, weare shown information which was obscured or unrecognizedpreviously. Thus, the sure truth-preserving nature of deductive

arguments comes at a cost.

Inductive arguments, on the other hand, do provide us withnew ideas and thus may expand our knowledge about the world

in a way that is impossible for deductive arguments to achieve. Thus, while deductive arguments may be used most often with

mathematics, most other fields of research make extensive use

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of inductive arguments.


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o g uc o a e uc o Inductive and deductive reasoning are used together in research.

it. We answer the question and give tentative explanation for the same

(hypothesis).

Deduction is the process by which we test whether the hypothesis iscapable of explaining the fact.

E.g.:

Hypothesis : there is increase in the usage of mobile devisesamongst youth by 20% in last 2 years.

Secondary data : of last 2 years to prove that there is an increase in

u v . Primary data : conduct a survey and get some observations. This

will help us to infer that there is an increase in the mobile device hastaken lace..

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o g uc o a e uc oThis is also called double movement of reflective thought (Dewey).

A typical way of carrying research : we develop multiplehypothesis which can explain a question. We then design astudy to test all the hypothesis at once. We test the hypothesisand present the results.

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o g uc o a e uc o Premise 1: Use of mobile devices is increased in young people

rem se : sa e o es top as re uces

Mobile has replaced desktop for most of the activities.

Premises 1: Consumption of drugs is increased in IT youth.

Premises 3: IT has increased lot of money which is making ITpeople spend more.

IT is causing youth spend more on drugs.

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The ResearchLanguage

A concept is a generally accepted collection of meaning or, ,

conditions, situations, and behaviors. Classifying and categorizing objects or events that have a

concepts.

E.g.: a man is walking, running, skipping or hopping are.

Concepts are building blocks. In organizational theory:

leadership, productivity, morale are concepts. In the theory of Finance: gross national product, asset, inflation

are concepts (zikmund).

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The Research

Language

In research, we devise hypothesis using concepts.

e ev se measurement concepts y w c we test t e

hypothesis. While devising such and instrument, one must take care

We conceptualize clearly.

Others understand the concepts we use.

E. .: we mi ht want to ask about famil income.

We need to narrow down the concept by specifying

Time period (weekly, monthly, annually)

Income in kind: free rent, employee discount, food stamps

Measuring attitude of people: further carefully selected concepts

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are requ re .


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The Research

Language

Concepts have progressive levels of abstraction: that is degree

objective to refer to. Table is an objective concept. The characteristics of table are

.

An abstraction like Personality is difficult to visualize.

Such abstract concepts are called constructs.

A construct is an image or abstract idea specifically invented fora given research or theory building purpose.

We build constructs b combinin more concrete conce ts,

especially when the idea or image we intend to convey is notsubject to direct observation.

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The Research

Language

E.g.: job redesign :presentation quality, language skills, job interest

Presentation quality : composed of format accuracy, manuscripterrors and keyboard errors (more concrete and easy to measure)

Language skills : vocabulary ,syntax and spelling.

Job interest is most difficult to measure. Will be composed of moreconcepts and constructs.

All the three together will help to analyze job redesign required.shown, we will form a conceptual scheme.

Definitions: can be used to reduce the confusion about the meaning

o concepts amongst var ous part es nvo ve . Two types of definitions

Dictionary definitions: concept defined with a synonym

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for testing or measurement. (important for research)


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The Research

Language

Operational definition: the definition must specify the.

E.g.: classification of a college student : freshman, sophomore,junior or senior. (Definition)

Operational definition helps you to determine, in which class astudent should fall.

Freshman : Fewer than 30 hours creditSophomore : 30-59 hours credit

Junior : 60- 89 hours credit

.

A more abstract concept : consumer socialization: will be definedin terms of skills, knowledge, and attitude or we may scale that

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.


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The ResearchLanguage

Variable: is a symbol of an event, characteristic, trait, or attribute

values.

Variables can be classified as

Dichotomous variables: have only two values (0 or 1):

employed, unemployed ; male, female Variables may take multiple values: race, religion, various

models of a machine.

Variables may also be classified as: Discrete: can have only certain values

Continuous: variables can take values in a iven ran e

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The Research

Language

Another classification Inde endent variable: is the redictor variable which causes an

effect on the dependant variable. Dependent variable: is the measured, predicted or monitored

variable. It is affected by the manipulation of the independentvariable.

E.g.: a switch from salary compensation (IV) will lead toincreased sale productivity (DV) per worker.

o era ng ar a e: In various relationships, there is an IV and a DV. Moderating variable is a second dependent variable that is

included because it is believed to have a significant contributory

or contingent effect on the originally stated IV-DV relationship.

A switch to commission from commission to salary compensation

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worker, especially among young workers (MV)


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Intervening variable (IVV) : that factor which theoretically affects, ,

manipulated. Proposition : Intelligent workers produce less defective product.

Boredom (IVV)

For causation: one should be able to identify the Intervening

variable

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Proposition: a statement about observable phenomenon

When a preposition is formulated for empirical testing , we call ita hypothesis.

.

Hypothesis have been described as statements in whichvariables are assigned to cases.

average achievement motivation.

Descri tive H othesis: the state the existence size form or

distribution of some variable. E.g.: In Detroit (case)our potato chip market stands 13.7 percent.

Ei ht ercent of Com an Z stockholders cases favor

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increase in companys cash dividend (variable)


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The Research

Language

Relational Hypothesis: these statements describe relationship

.

Correlation Hypothesis

States that the variables occur together in some specifiedmanner without implying that one causes the other.

There are weak claims about the causal linkages.

E.g.: Women under 35 purchase fewer units of our productthan women who are 35 years of age or older.

People in Atlanta give the president a more favorable ratingthan do people in St Louis.

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Causal Hypothesis

n ncrease n am y ncome ea s o an ncrease n e

percentage of income saved (DV) Exposure to companys message concerning industry

pro ems ea s o more avora e a u es yemployees towards the company.

In causal hypothesis : direction is important. am y ncome ea s to sav ng.

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Theory is a set of systematically interrelated concepts,,

predict phenomena (facts). Difference between Hypothesis and Theory is one of degree of

.

Theories tend to be more complex, be abstract, involves multiple

variables. Hypothesis : tends to be more simple, limited variable

statements involving concrete instances.

A theory is a set of systematically interrelated concepts,

definitions, and propositions that are advanced to explain andpredict phenomenon (facts)

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The Research

Language

E.g.: Product life cycle is a theory in marketing

A product has 4 stages :(introduction, growth, maturity, decline).

In each stage there are many concepts, constructs, andhypothesis. Definitions are also required for communicating theclaims of the theory and its consistency in testing to reality.

Growth stage: com any s ends heavily on advertising andpromotion to create the awareness of the product. Focus here isto promote the primary demand (concept).

Hi h ricin ma reflect skimmin conce t to hel the com an

recover the developmental costs. Or the product manager may use low pricing or penetration

ricin conce t

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The Research

Language

In the growth stage, the sale increases rapidly because the.

repeated customers (concept).

If the company is not able to attract repeated customers, itusually means, death of the product (proposition).

The maturity stage is a good time for a company to generatecash (proposition). At this stage, the cost of development of theproduct and establishing in the market is paid and its time to

make profits.

Firm now uses extension strate ies construct to dela the

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decline stage of the product.


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In the decline stage, the product will consume disproportionate

potential future worth. (Hypothesis)

To make the hypothesis fully testable, we need the operationaldefinitions of disproportionate share, tie, resources, and future

worth.

The challenge is to build more comprehensive theories to explainand predict how modifying the product and other variables will

help the firm.

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chapter 2-theory building

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