Theory Building

The Thought Process:

Reasoning
 Deductive reasoning:
The logical process of deriving a conclusion
from a known premise or something known to
be true. The conclusion must necessarily
follow from the reasons given.
 Premises (reasons) given for the conclusion must
agree with the real world (true).
 The conclusions must necessarily follow from the
premises (valid).
An example:
 Allregular employees can be trusted not to
steal (premise 1)
 John is a regular employee (premise 2)

 John can be trusted not to steal (conclusion)

Conclusions are not logically justified if one

or more premises are untrue or the argument
form is invalid.
 Inductive reasoning:
The logical process of establishing a general
proposition on the basis of observation of
particular facts.
 To draw a conclusion from one or more
particular facts or pieces of evidence. The
conclusion explains the facts and the facts
support the conclusions.
 In induction the conclusion is only a
hypothesis ( one explanation).
 Combining Induction and Deduction:
1. You promote a product but sales do not
increase (fact)
2. You ask the question, “why didn’t sales
increase?” (induction)
3. You infer a conclusion (hypothesis) to
answer the question: the promotion was
poorly executed (hypothesis)
4. You use this hypothesis to conclude
(deduce) that the sales will not increase
during a poorly executed promotion. You
know from experience (deduction).
Building Blocks of a Theory
 Concept:

A generalized idea about a class of objects;

an abstraction of reality that is the basic unit
for theory development. The success of
research depends upon how clearly we
conceptualize, and how well others
understand the concepts we use.
 Example: estimate of family’s total income.
 We need to narrow it down by specifying:
 Time period (weekly / monthly / annually)
 Before or after income taxes
 For head of family only or for all family members
 For salary and wages only or also for dividends,
interests etc.
 Income in kind such as free rents, employee
discounts or food stamps.
 Abstract level:
In theory development, the level of
knowledge expressing a concept that exists
only as an idea or a quality apart from an
object.
 Empirical level:

Level of knowledge reflecting that which is

verifiable by experience or observation.
 Construct; is an image or idea specifically
invented for a given research and / or theory
building purpose. Not directly subject to
observation. e.g. Language Skill (includes
vocabulary, syntax, spelling) and Presentation
Quality (Manuscript errors, format accuracy,
keyboarding speed)
 Definitions; in research need to be the same
for effective communication. Two types;
Dictionary definitions and Operational
definitions.
 Operational definition; is stated in terms of
specific testing or measurement criteria. Must
have empirical referents( i.e. we must be able
to count, measure or gather the information
through our senses). Must specify
characteristics and how they are to be
observed.
 Even more critical for abstract ideas; need to
develop / use a scale to operationally define
the construct.
 Variables:

In practice the term variable is used as a

synonym for construct or the property being
studied. A symbol to which we assign
numerals or values. Can be:
 Dichotomous; have only two values
reflecting the presence or absence of a
property.
 Discrete; that can fit into categories
 Continuous; take values within a given
range or infinite set. Income, temp. age
Independent and Dependent
Variables
Independent variable Dependent variable
Presumed cause Presumed effect
Stimulus Response
Predicted from Predicted to
Antecedent Consequence
Manipulated Measured outcome
Predictor Criterion
 Moderating variables; is a second
independent variable that is included
because it is believed to have a significant
contributory or contingent effect on the
originally stated IV-DV relationship.
 Extraneous variables; that might
conceivably affect a given relationship.
Assumed or excluded from the study as they
have a little or no effect in a given situation or
controlled.
 Intervening variables; is that factor which
theoretically affects the observed
phenomenon but cannot be seen, measured
or manipulated, effects must be inferred.
 Proposition:

A statement concerned with the relationship

among concepts that may be judged as true
or false if it refers to observable
phenomenon.
 Theories are networks of propositions
 Theorybuilding is a process of increasing
abstraction
Theories
Levels of Abstraction

Propositions

Concepts

Observations of objects and events

(Reality)
 Hypothesis:

An unproven proposition or supposition that

tentatively explains certain facts or
phenomenon; a proposition that is formulated
for empirical testing.
 Propositions are at abstract level while
hypotheses are at empirical level.
Descriptive Hypotheses
 Propositions that typically state the existence,
size, form or distribution of some variable;
e.g.
 Pakistani businesses (case) are facing
budget difficulties (variable)
 70% of the last batch of IAS graduates (case)
are employed (variable).
 Researchers often use a research question
rather than a descriptive hypothesis.
Advantages of Descriptive
Hypothesis
 It encourages researchers to crystallize their
thinking about the likely relationships to be
found
 Further encourages them to think about the
implications of a supported or rejected
findings
 It is useful for testing statistical significance
Relational Hypotheses
 The statements that describe a relationship
between two variables with respect to some
case. For e.g.
 Foreign (variable) products are perceived by
Pakistani consumers (case) to be of better
quality (variable) than domestic products.
Correlational Hypotheses
 State that the variables occur together in
some specified manner without implying that
one causes the other. For e.g.
 Young workers (under 35 years of age) are
less productive than those who are 35 years
of age or older.
Explanatory (causal)
Hypotheses
 State an implication that the existence of, or a
change in, one variable causes or leads to a
change in the other variable. For e.g.
 An increase in family income (IV) leads to an
increase in the percentage of income saved
(DV).
Role of the Hypothesis
 It guides the direction of the study
 It identifies facts that are relevant and those
that are not
 It suggests which form of research design is
likely to be most appropriate.
 It provides a framework for organizing the
conclusions that result.
What is a good Hypothesis?
 Adequate for its purpose
 Testable

 Better than its rivals

Understanding Theory
 Goals of Theory:
 Prediction
 Understanding
A Theory is a coherent set of general
propositions, used as principles of
explanation of the apparent relationships of
certain observed phenomenon. Theories
allow generalizations beyond individual facts
or situations.
 An Example of a Theory:
Labor market conditions
No. of organizations
Personal Charact.
Ease of movement

Perceived ease of
movement
Voluntary
Intentions
Job Performance Job
To quit
turnover

Perceived desirability
of movement

Pay, Job complexity

Particip. In decision
Making etc.
The Scientific Method of
Theory Building
 Seven steps are involved:
 Assessment of relevant existing knowledge
 Formulation of concepts and propositions
 Statement of hypotheses
 Design the research to test the hypotheses
 Acquisition of meaningful empirical data
 Analysis and evaluation of data
 Provide explanation and state new problems
raised by the research