1 Developing Theory and Hypotheses in Management and Organization Research YADONG LUO University of Miami IACMR Dissertation Proposal Development Workshop

11

Developing Theory and Hypotheses Developing Theory and Hypotheses in Management and Organization Researchin Management and Organization Research

YADONG LUOYADONG LUOUniversity of MiamiUniversity of Miami

IACMR Dissertation Proposal Development WorkshopIACMR Dissertation Proposal Development Workshop

July 12, GuangzhouJuly 12, Guangzhou

It is difficult…..It is difficult…..

Theoretical development is, perhaps, the most difficult part in research development

Lack of consensus on exactly how to evaluate theoretical contribution

Lack of agreement about which theoretical perspectives are best suited for the topic in question

Reviewers may be biased or lack adequate knowledge, and your theoretical domain may clash with their personal tastes and preferences

Tough to make tradeoffs between generality, simplicity, and accuracy

Writing strong theory is time consuming and fraught with error for even the most skilled management scholars

22

It is difficult but…..It is difficult but…..

Theoretical assumptions may not be universally shared

A topic in question may be so complex that it requires multiple lenses to theorize

But, a paper without theoretical logic is tantamount to a body without heart

It is the theoretical part (framework and hypotheses) that tells why. Data describes which empirical patterns were observed and theory explains why empirical patterns were observed or are expected to be observed

Theory guides propositions, research methods, and even analytical tools

Strong theory delves into underlying processes so as to understand the systematic reasons for a particular occurrence or nonoccurrence

33

44

Theory is…..Theory is…..

A theory is a system of constructs and variables in which the constructs or variables are related to each other by propositions or hypotheses, within the boundary that sets the limitations and assumptions in applying it (e.g., values, context, space, time)

Its purpose is (1) to organize (parsimoniously) and to (2) communicate (clearly)

Theory is developed by which to explain AND predict complex events, objects or phenomena. A theory is useful (i.e., utility value) if it can both explain and predict (e.g., TCE; Resource dependence)

An explanation establishes the substantive meaning of constructs, variables, and their linkages, while a prediction tests that substantive meaning by comparing it to empirical evidence

Theory comprises Theory comprises ..........

What (constructs, variables, concepts) – It requires sensitivity to (a) Comprehensiveness (are all relevant factors included?) and (b) Parsimony (should some factors be deleted because they add little additional value to our understanding?) (e.g., institutional theory; RBV)

How – How a set of factors are related? Operationally, it uses “arrows” to connect the “box” and to show the pattern. The more complex the set of relationships under consideration, the more useful it is to graphically depict them (TCE: transaction traits – transaction cost – governance and control)

55

Theory comprises Theory comprises ..........

Why - What are the underlying psychological, economic, or social dynamics that justify the selection of factors and the proposed causal relationships? It defines logic, the most important criterion to evaluate a theory (e.g., coopetition theory and alliance theory)

Researchers should push back the boundaries of our knowledge by providing compelling and logical justifications for altered views

The soundness of fundamental views of human nature, organizational requisites, or societal processes often provides the basis for judging the reasonableness of the proposed conceptualization

Without whys underlying the model, it would lead to data-driven or empirically, rather than theoretically, dominated discussions of the implications of a study’s results

Who, where, when – define a theory’s boundary constraints (e.g., temporal and contextual factors) and its generalizability. Researchers should be encouraged to theoretical sensitivity to context (e.g., time, space, environment, regulation, market structure, etc.) (e.g., IO theory)

66

Theory is an approximated continuumTheory is an approximated continuum

• Literature review Mid-range theoretical Grand or full-blown

with hypothesesmodel or framework theory or perspective

weak medium strong

Theoretical completeness, rigorousness, and originality

77

Theoretical requirements varyTheoretical requirements vary

e.g., Management Science e.g., ASQ, AMJ

J. of Applied Psychology

• Empirical

requirement

• e.g., Non-A Journals e.g., AMR, Annual R. of Sociology

• Theoretical requirement

88

99

Developing theoretical FrameworkDeveloping theoretical Framework

Most studies do not generate new, novel theories from scratch. Instead, they generally work on improving what already exists

The additions or deletions of factors are not of sufficient magnitude to substantially alter the core logic of the existing theory. Relationships, not lists, are the domain of theory

Authors must be able to identify and delineate how proposed changes affect the accepted relationships between the factors and what contributions you will make

It is a common approach to explain why and strengthen logic by borrowing a perspective from other fields, which encourages an alternative explanation or challenge the underlying rationales of accepted theories. Theories are often challenged because their assumptions have been proven unrealistic (e.g., structuration theory and social exchange theory)

1010

please do …..please do …..

Explicate pertinent logic from past theoretical work so that the reader can grasp the author’s developmental arguments

Strong theory usually stems from a single or small set of research ideas, though their implications are widespread. Papers with strong theory often start with a few sharpened conceptual statements and build a logically detailed case; they have both simplicity and interconnectedness (e.g., population density theory)

Read the diverse literature in multiple fields (economics, sociology)

Avoid mentioning those variables or process that you cannot measure and test


Use diagrams or figures. Although they by themselves do not constitute theory, such diagrams or figures are a valuable part of theoretical development.

Diagrams provide structure to otherwise rambling or amorphous arguments. More helpful are figures that show causal relationships in a logical ordering so that readers can see a chain of causation or how a third variable intervene in or moderates in a relationship. Moderating and mediating models become popular in recent years

Also useful are temporal diagrams showing how a particular process unfolds over time

Rich verbal explication on arrows is always necessary. Arguments must be rich enough that processes have to be described with sentences and paragraphs so as to convey the logic behind the causal arrow

1111


Typology and metaphors are powerful literary tools and extremely useful in describing what – helping researchers to meet one of the goals of theory – eliminating some of the complexity of the real world. In this context, they may well serve as precursors to theories

Typology is a mental construct or categorization formed by the synthesis of many diffuse, complex and interrelated phenomena which are arranged, according to certain one-sidedly accentuated points of view, into a unified analytical construct (e.g., Miller and Friesen emphasized the environment-strategy configurations)

A metaphor is a statement that maintains that two phenomena are isomorphic (e.g., the notions of organizations as “loosely coupled systems” by Weick in 1976 and as “garbage cans” by Cohen, March, and Olsen in 1972; LOF by Hymer in 1976)

1212


Typologies and metaphors are the source of material of theories, they themselves are not theories

To be use in theory development, typology and metaphors must go beyond description (what) and be a useful heuristic device. That is, the categorization and imagery contained in typology or metaphor must assist the theorist in deriving specific propositions and/or hypotheses about the phenomenon being studied

See a small example

1313

1414

FIGURE 1A Theoretical Model of Control and Cooperation Coupling in Buyer-Supplier

Dyads

Cel l 2Hammer

Commitment (M) Information Sharing (M) Coercive Power Execution (H) Non-coercive Power Execution (L) Dependence Conti nui ty (L)

Cel l 1Integrator

Commitment (H) Information Sharing (H) Coercive Power Execution (H) Non-coercive Power Execution (H) Dependence Continuity (H)

Cel l 3Buff er

Commitment (L) Information Sharing (L) Coercive Power Execution (L) Non-coercive Power Execution (L) Dependence Continuity (L)

Cel l 4Lubri cant

Commitment (M) Information Sharing (M) Coercive Power Execution (L) Non-coercive Power Execution (H) Dependence Continuity (M)L

L H

H

Soci al Control Interorgani zati onal Attachment Interpersonal Soci al i zati on

Econ

omic

Con

trol

Co

ntra

ctua

l Co

mple

tene

ss

Stru

ctur

al F

orma

liza

tion

1515

Hypothesis 1: Commitment in buyer-supplier partnerships will be highest in the integrator metaphor (Cell 1), lowest in the buffer metaphor (Cell 3), with in-between levels in the metaphors of hammer (Cell 2) and lubricant (Cell 4).

-4

-3

-2

-1

0

1

2

3

4

-4 -3 -2 -1 0 1 2 3

Function 2 (Social Control)

Func

tion

1 (E

cono

ic C

ontr

ol)

Cluster IIICluster IV

FIGURE 3Plot of Centroids of Four Clusters

Cluster ICluster II

Please do not Please do not …..…..

Just as a collection of words does not make a sentence, a collection of constructs and variables does not necessarily make a theory. A theory must explain why variables or constructs come about or why they are connected

Applying an accepted theory or model to a new setting and merely showing that it works as expected is not instructive by itself. This conclusion has theoretical merit only if qualitative changes in the boundaries or notions of a theory, rather than mere quantitative explanations, are conceptually illustrated (i.e., a theoretical feedback loop)

1616

Please do not Please do not …..…..References and citations are not theory. References to theory developed in prior work help set the stage for new conceptual arguments. Authors need to acknowledge the stream of logic on which they are drawing and to which they are contributing

But listing references to existing theories and mentioning the names of such theories is not the same as explicating the logic they contain. References are sometimes used, along a flurry of citations, like a smoke screen to hide the absence of theory

Previous empirical findings are not theory: Often, authors try to develop a theoretical foundation by describing empirical findings from past research and then quickly move from this basis to a discussion of the current results. Mere citing previous findings without offering logical reasoning does not justify your argument

1717

Now, hypothesesNow, hypotheses

Not all theoretical contributions require propositions (involving concepts and constructs) or hypotheses (involving variables and measures), nor should all papers need follow the same format

However, when the paper is designed to make some theoretical contributions, testable hypotheses are very useful, and they can be an important part of a well-crafted theoretical framework

Hypotheses serve as crucial bridges between theory and data, making explicit how the variables and relationships that follow from a logical argument will be operationalized.

1818

Developing your hypothesesDeveloping your hypotheses

Hypotheses must be conceptually logical. Compiling literature reviews and citations without underlying logic does not constitute good hypotheses development

Hypotheses must be empirically testable: Empirical adequacy embodied in hypotheses cannot be achieved if the hypothesized relationships do not meet standards of a good measurement model or if they are inherently untestable

Hypotheses must be context-specific (environmentally- or spatially bound?). The predictive adequacy of a hypothesis is judged in terms of its ability to make predictions within delineated spaces and time

1919


Constructs and variables with broader scope allow hypotheses to have greater overall explanatory power. A good hypothesis is the one that achieves a balance between scope (range of arguments) and parsimony (ratio of hypotheses to propositions/arguments)

Individual hypotheses must satisfy the two criteria: (a) they must be non-tautological, and (b) the nature (e.g., strength or form) of the relationship between antecedent and consequent must be specified

2020


A good hypothesis contains (1) the substantive element (explanatory potential) and (2) the probabilistic element (predictive adequacy)

A hypothesis with explicit assumptions is clearly preferable to one without spelling out assumptions (e.g., the strategic choice perspective assumes the interdependence of units within and across organizational boundaries)

Although path and structural equation (e.g., LISREL) models provide a systematic format for expressing the proposed relationships, the actual ordering of the variables and the nature of their relationship (e.g., causal, simultaneous, associative, reciprocal, recursive, dialectical) must be conceptually clarified and justified

2121


A hypothesis’s explanatory power is also continent upon the extent to which the actual empirical form of the relationship (e.g., linear, curvilinear, U-shape, inverse U-shape, J-curve, S-curve) is stated.

Even though this is an empirical question, it is preferred to think further whether your hypotheses will be strengthened or more contributory when including the above forms

2222


Predictive adequacy of two competing hypotheses derived from two alternative theories needs to be comparatively assessed on the basis of the degree of confidence researchers have in the theory (statistical significance)

Empirical results cited from previous works can provide useful support for your hypotheses; but they should not be construed as theory or hypotheses themselves. Prior findings cannot by themselves motivate hypotheses, and the reporting of results cannot substitute for causal reasoning

It is not advisable to pose a wide range or a long list of hypotheses to show your rich labor and/or rich data

2323


If your hypotheses are based on a cumulative body of more-or-less universally accepted theories, then the first task is to select an appropriate theory to underpin hypotheses

Connectivity – the ability of a selected theory to explain and justify the central logic of your argument

Transformationality – the ability of hypotheses to make the theory enlightening in a new study setting

Should we use single or multiple theories to underpin hypotheses in one study? Depending on necessity and compatibility

2424

Finally, your self-assessmentFinally, your self-assessment

What’s new? Does the paper make a significant, value-added contribution to current thinking? Reviewers are not necessarily looking for totally new theories. However, modifications or extensions of current theories should alter scholars’ extant views in important ways

So what? Will the theory likely change the practice or organizational science in this area? Does the paper go beyond making token statements about the value of testing or using these ideas? Are solutions proposed for remedying alleged deficiencies in current theories?

2525


Why so? Are the underlying logic and supporting evidence compelling? Is your theoretical framework built on a foundation of convincing argumentation and grounded in reasonable, explicit views?

Well done? Are multiple theoretical elements (what, how, why, etc) covered, giving the paper a conceptually well-rounded, rather than a superficial, quality? Do your arguments reflect a current understanding of the subject?

2626


Connected well? Are your hypotheses logically connected with and derived from your theoretical framework? Have you incorporated your central arguments and compelling logic in developing these hypotheses? Are your arguments appeared in theory and hypotheses are completely consistent?

Written well? Is the paper well written? Does it flow logically? Are the central ideas easily accessed? Is the paper long enough to cover the subject but short enough to be interesting?

2727


Who cares? Is the topic broad enough to attract academic readers? Is the paper theoretically interesting and technically adequate to most of our broad audience? Does the paper also have some practical or managerial implications? If yes, in what ways?

Why now? Is the topic very timely in the area? Will it likely advance current discussions, stimulate new discussions, or revitalize old discussions?

2828

2929

Further ReadingsFurther Readings

1. Argyris, C. and Schon, D.A. 1977. Theory in practice: Increasing professional effectiveness. San Francisco: Jossey-Bass.

2. Bacharach, S.B. 1989. Organizational theories: Some criteria for evaluation. Academy of Management Review, 14(4): 496-515.

3. Blalock, H.M. 1969. Theory construction: From verbal to mathematical formulation. Englewood Cliffs, NJ: Prentice Hall.

4. Cohen, B. 1980. Developing sociological knowledge: Theory and method. Englewood Cliffs, NJ: Prentice Hall.

5. Davis, J.P., Eisenhardt, K.M. and Bingham, C.B. 2007. Developing theory through simulation methods. Academy of Management Review, 32(2): 480-499.

6. Dubin, R. 1969. Theory building. New York: Free Press.7. Eisenhardt, K.M. 1989. Building theories from case study research.

Academy of Management Review, 14(4): 532-550.

3030

8. DiMaggio, P.J. 1995. Comments on “what theory is not”. Administrative Science Quarterly, 40: 391-397.

9. Freese, L. 1980. Formal theorizing. Annual Review of Sociology, 6:187-212.

10. Poole, M.S. and Van de Ven, A.H. 1989. Using paradox to build management and organization theories. Academy of Management Review, 14(4): 562-578.

11. Smith, K.G. and Hitt, M.A. 2005. Great minds in management: The process of theory development. Oxford: Oxford University Press.

12. Sutton, R.I. and Staw, B.M. 1995. What theory is not. Administrative Science Quarterly, 40: 371-384.

13. Tsang, E.W.K.1999. Replication and theory development in organizational science: A critical realist perspective. Academy of Management Review, 24(4): 759-780.

14. Weick, K.E. 1989. Theory construction as disciplined imagination. Academy of Management Review, 14(4): 516-531.

15. Weick, K.E. 1995. What theory is not, theory is. Administrative Science Quarterly, 40: 385-390.

16. Whetten, D.A. 1989. What constitutes a theoretical contribution. Academy of Management Review, 14(4): 490-495.

Documents

1 Developing Theory and Hypotheses in Management and Organization Research YADONG LUO University of Miami IACMR Dissertation Proposal Development Workshop