Transcript Changes of MNE Strategies -

Developing Theory and Hypotheses
in Management and Organization Research
YADONG LUO
University of Miami
IACMR Dissertation Proposal Development Workshop
July 12, Guangzhou
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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
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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
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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
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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)
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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)
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Theory is an approximated continuum
• Literature review
with hypotheses
weak
Mid-range theoretical
model or framework
medium
Grand or full-blown
theory or perspective
strong
Theoretical completeness, rigorousness, and originality
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Theoretical requirements vary
•
e.g., Management Science
J. of Applied Psychology
e.g., ASQ, AMJ
• e.g., Non-A Journals
e.g., AMR,
Empirical
requirement
Annual R. of Sociology
•
Theoretical requirement
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Developing 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)
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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
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please do …..
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
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please do …..
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)
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please do …..
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
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FIGURE 1
A Theoretical Model of Control and Cooperation Coupling in Buyer-Supplier Dyads
Contractual Completeness
Structural Formalization
L


Economic Control
H
Cell 2
Cell 1
Hammer
Integrator
Commitment (M)
Information Sharing (M)
Coercive Power Execution (H)
Non-coercive Power Execution (L)
Dependence Continuity (L)
Commitment (H)
Information Sharing (H)
Coercive Power Execution (H)
Non-coercive Power Execution (H)
Dependence Continuity (H)
Cell 3
Cell 4
Buffer
Lubricant
Commitment (L)
Information Sharing (L)
Coercive Power Execution (L)
Non-coercive Power Execution (L)
Dependence Continuity (L)
Commitment (M)
Information Sharing (M)
Coercive Power Execution (L)
Non-coercive Power Execution (H)
Dependence Continuity (M)
L
Social Control


H
Interorganizational Attachment
Interpersonal Socialization
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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).
FIGURE 3
Plot of Centroids of Four Clusters
Function 1 (Econoic Control)
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Cluster II
3
Cluster I
2
1
0
Cluster IV
Cluster III
-1
-2
-3
-4
-4
-3
-2
-1
0
1
2
3
Function 2 (Social Control)
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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)
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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
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Now, 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 wellcrafted 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.
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Developing 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
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Developing your hypotheses
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
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Developing your hypotheses
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
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Developing your hypotheses
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
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Developing your hypotheses
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
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Developing your hypotheses
If your hypotheses are based on a cumulative body of more-orless 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
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Finally, 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?
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Finally, your self-assessment
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 wellrounded, rather than a superficial, quality? Do your
arguments reflect a current understanding of the subject?
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Finally, your self-assessment
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?
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Finally, your self-assessment
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?
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Further Readings
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Argyris, C. and Schon, D.A. 1977. Theory in practice: Increasing
professional effectiveness. San Francisco: Jossey-Bass.
Bacharach, S.B. 1989. Organizational theories: Some criteria for
evaluation. Academy of Management Review, 14(4): 496-515.
Blalock, H.M. 1969. Theory construction: From verbal to mathematical
formulation. Englewood Cliffs, NJ: Prentice Hall.
Cohen, B. 1980. Developing sociological knowledge: Theory and method.
Englewood Cliffs, NJ: Prentice Hall.
Davis, J.P., Eisenhardt, K.M. and Bingham, C.B. 2007. Developing theory
through simulation methods. Academy of Management Review, 32(2):
480-499.
Dubin, R. 1969. Theory building. New York: Free Press.
Eisenhardt, K.M. 1989. Building theories from case study research.
Academy of Management Review, 14(4): 532-550.
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8.
9.
10.
11.
12.
13.
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15.
16.
DiMaggio, P.J. 1995. Comments on “what theory is not”.
Administrative Science Quarterly, 40: 391-397.
Freese, L. 1980. Formal theorizing. Annual Review of Sociology,
6:187-212.
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.
Smith, K.G. and Hitt, M.A. 2005. Great minds in management:
The process of theory development. Oxford: Oxford University
Press.
Sutton, R.I. and Staw, B.M. 1995. What theory is not.
Administrative Science Quarterly, 40: 371-384.
Tsang, E.W.K.1999. Replication and theory development in
organizational science: A critical realist perspective. Academy of
Management Review, 24(4): 759-780.
Weick, K.E. 1989. Theory construction as disciplined
imagination. Academy of Management Review, 14(4): 516-531.
Weick, K.E. 1995. What theory is not, theory is. Administrative
Science Quarterly, 40: 385-390.
Whetten, D.A. 1989. What constitutes a theoretical contribution.
Academy of Management Review, 14(4): 490-495.
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