Chapter 3 RIC

Chapter 3
Q 1)Explain Theory , concept, Proposition,Hypothesis
• Theory: Suppose a researcher investigating business phenomena wants to

know what caused the financial crisis. Another person wants to know if
organizational structure influences leadership style. Both of these individuals
want to gain a better understanding of the environment and be able to
predict behavior; to be able to say that if we take a particular course of
action we can expect a specific out-come to occur. These two issues—
understanding and predicting—are the two purposes of
theory.Accomplishing the first goal allows the theorist to gain an
understanding of the relationship among various phenomena. For example, a
financial advisor may believe, or theorize, that older investors tend to be
more interested in investment income than younger investors. This theory,
once verified, would then allow her to predict the importance of expected
dividend yield based on the age of her customer. Thus a theory enables us to
predict the behavior or characteristics of one phenomenon from the
knowledge of another phenomenon. The value of understanding and
anticipating future conditions in the environment or in an organization
should be obvious. In most situations, of course, understanding and
prediction go hand in hand.
Concept: A concept or construct is a generalized idea about a class of objects,
attributes, occurrences, or processes that has been given a name. If you, as an
organizational theorist, were to describe phenomena such as supervisory behavior
or risk aversion, you would categorize empirical events or real things into concepts.
Concepts are the building blocks of theory. In organizational theory,leadership,
productivity, and morale are concepts. In the theory of finance, gross national
product, risk aversion, and inflation are frequently used concepts. Accounting
concepts include assets, liabilities, and depreciation. In marketing, customer
satisfaction, market share, and loyalty are important concepts.
Dipika H.Mankar
Concepts abstract reality. That is, concepts express in words various events or
objects.
Proposition: Propositions are statements concerned with the relationships among

concepts. A proposition explains the logical linkage among certain concepts by
asserting a universal connection between concepts. For example, we might
propose that treating our employees better will make them more loyal employees.
This is certainly a logical link between managerial actions and employee reactions,
but is quite general and not really testable in its current form.
Hypothesis :A hypothesis is a formal statement explaining some outcome. In its

simplest form, a hypothesis is a guess. A sales manager may hypothesize that the
salespeople who are highest in product knowledge will be the most productive. An
advertising manager may hypothesize that if consumers’ attitudes toward a
product change in a positive direction, there will be an increase in consumption of
the product. A human resource manager may hypothesize that job candidates with
certain majors will be more successful employees.
A hypothesis is a proposition that is empirically testable. In other words, when one

states a hypothesis, it should be written in a manner that can be supported or
shown to be wrong through an empirical test.
Q 2) What do you mean Theory Building?
At the abstract, conceptual level, a theory may be developed with deductive

reasoning by going from a general statement to a specific assertion. Deductive
reasoning is the logical process of deriving a conclusion about a specific instance based
on a known general premise or something known to be true. For example, while you
might occasionally have doubts, we know that all business professors are human
beings. At the empirical level, a theory may be developed with inductive reasoning.
Inuctive reasoning is the logical process of establishing a general proposition on the
Dipika H.Mankar
basis of observation ofparticular facts. All business professors that have ever been
seen are human beings; therefore, all business professors are human beings.
Q 3)What do you mean by scientific method?
Seven operations may be viewed as the steps involved in the application of the
scientific method:
1. Assessment of relevant existing knowledge of a phenomenon
2. Formulation of concepts and propositions.
3. Statement of hypotheses.
4. Design of research to test the hypotheses.
5. Acquisition of meaningful empirical data.
6. Analysis and evaluation of data.
7. Proposal of an explanation of the phenomenon and statement of new problems

raised by the research.
Dipika H.Mankar

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Chapter 3

Q 1)Explain Theory , concept, Proposition,Hypothesis

• Theory: Suppose a researcher investigating business phenomena wants to

Proposition: Propositions are statements concerned with the relationships among

Hypothesis :A hypothesis is a formal statement explaining some outcome. In its

A hypothesis is a proposition that is empirically testable. In other words, when one

Q 2) What do you mean Theory Building?

At the abstract, conceptual level, a theory may be developed with deductive

Q 3)What do you mean by scientific method?

1. Assessment of relevant existing knowledge of a phenomenon

2. Formulation of concepts and propositions.

4. Design of research to test the hypotheses.

5. Acquisition of meaningful empirical data.

6. Analysis and evaluation of data.

7. Proposal of an explanation of the phenomenon and statement of new problems

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