Lecture 2: Theory Building
Course Teacher:
Dr. Niluthpaul Sarker
Professor
Department of Accounting, JnU.
Business Research Methods
1. Definition of Theory
A coherent set of general propositions used as principles of
explanation of the apparent relationships of certain observed
phenomena.
Theories
Theories are nets cast to catch what we call “the world”: to
rationalize, to explain, and to master it. We endeavor to make the
mesh ever finer and finer.
Karl R. Popper
2. Levels of Reality
2.1. Concept (or Construct)
A generalized idea about a class of objects,
attributes, occurrences, or processes that has
been given a name
Building blocks that abstract reality
“leadership,” “productivity,” and “morale”
“gross national product,” “asset,” and “inflation”
CONCEPTS
OBSERVATION OF OBJECTS
AND EVENTS (REALITY)
Empirical
Level
Abstract
Level
Concepts are Abstractions of Reality
Vegetation Vegetation
Fruit Fruit
Banana Banana
Reality Reality
I
n
c
r
e
a
s
in
g
ly
m
o
r
e
a
b
s
t
r
a
c
t
A Ladder Of Abstraction: For Concepts
Theory Building: A Process Of Increasing
Abstraction
Theories Theories
Propositions Propositions
Concepts Concepts
Observation of objectsObservation of objects
and events (reality ) and events (reality ) I
n
c
r
e
a
s
in
g
ly
m
o
r
e
a
b
s
t
r
a
c
t
2.2. Propositions
Propositions are statements concerned with the
relationships among concepts.
•A hypothesis is a proposition that is empirically
testable. It is an empirical statement concerned
with the relationship among variables.
•A variable is anything that may assume different
numerical values.
Always makes
four sales calls
a day
Dollar bonus for
sales volume
over quota
Concept B
(Habits)
Hypothesis at Empirical Level
Concept A
(Reinforcement)
Proposition at Abstract Level
3. Scientific Method
The use of a set of prescribed procedures for establishing and
connecting theoretical statements about events and for
predicting events yet unknown.
Assess
relevant
existing
knowledge
Formulate
concepts &
Propositions
Statement
of
Hypotheses
Design
research
Acquire
empirical
data
Analyze &
evaluate
data
Provide
explanation-
state new
problem
The Scientific Method: An Overview