Business Research Method by Zikmund & Babin

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After studying this chapter, you should be able to 1. Define the meaning of theory 2. Understand the goals of theory 3. Understand the terms concepts, propositions, variables, and hypotheses 4. Discuss how theories are developed 5. Understand the scientific method

Chapter Vignette: Theory and Practice
What if you went home tonight and turned on the light switch and nothing happened? Most of us would immediately start seeking a logical explanation: “Is the bulb burnt out?” “Did my roommate forget to pay the electric bill?” “Is the electricity out?” “Did a fuse blow?” These are common thoughts that would race through our minds. The order would probably depend on our past experience and we would try to determine the cause through a logical thought sequence. Attribution theory is one framework that helps us explain the world and determine the cause of an event (the light bulb not working) or behavior (why my girlfriend is mad at me). Simply put, this theory helps us make sense of events by providing a systematic method to assess and evaluate why things occur. Attribution theory is just one of many theoretical models that are useful to business researchers.

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CHAPTER 3 THEORY BUILDING

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Chapter 3: Theory Building

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Introduction
The purpose of science concerns the expansion of knowledge and the search for truth. Theory building is the means by which basic researchers hope to achieve this purpose. Students sometimes think their classes or course material are “too theoretical” or lacking “practical application.” However, this should certainly not be the case. Theories are simply generalizations that help us better understand reality. Furthermore, theories allow us to understand the logic behind things we observe. If a theory does not hold true in practice, then that theory holds no value. This chapter will provide a fundamental knowledge of theory, theory development, and some terminology regarding theory necessary for business researchers.

TOTHEPOINT

There is nothing so practical as a good theory.
—Kurt Lewin

What Is a Theory?
Like all abstractions, the word “theory” has been used in many different ways, in many different contexts, at times so broadly as to include almost all descriptive statements about a class of phenomena, and at other times so narrowly as to exclude everything but a series of terms and their relationships that satisfies certain logical requirements.1 A theory consists of a coherent set of general propositions that offer an explanation of some phenomena by describing the way other things correspond to this phenomena. Put another way, a theory is a formal, testable explanation of some events that includes explanations of how things relate to one another. A theory can be built through a process of reviewing previous findings of similar studies, simple logical deduction, and/or knowledge of applicable theoretical areas. For example, if a Web designer is trying to decide what color background is most effective in increasing online sales, he may first consult previous studies examining the effects of color on package design and retail store design. He may also find theories that deal with the wavelength of different colors, affective response to colors, or those that explain retail atmospherics. This may lead to the specific prediction that blue is the most effective background color for a Web site.2 While it may seem that theory is only relevant to academic or basic business research, theory plays a role in understanding practical research as well. Before setting research objectives, the researcher must be able to describe the business situation in some coherent way. Without this type of explanation, the researcher would have little idea of where to start. Ultimately, the logical explanation helps the researcher know what variables need to be included in the study and how they may relate to one another. The...
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