CHAPTER 3: THEORY BUILDING

What is Theory in the research and the process of building theory? Give an
example from business research.

Theory in Research:
Research theories are well-structured, systematic, and logically consistent sets of concepts or
principles that explain and predict phenomena in a particular field. Theories help explain and
interpret observed facts and patterns and guide further research. A theory is developed by
building and refining a conceptual framework from empirical evidence and observations.
Process of Building Theory:
(A hypothetical research study on employee motivation in the workplace)
The process of building a theory in research typically follows several stages:
1. Observation: The process begins with careful observation of a particular phenomenon or
phenomena within a specific field of study. Researchers identify patterns, relationships,
or gaps in existing knowledge.
Example: Researchers notice that some employees in a company consistently perform
better and are more engaged than others. They observe that these high-performing
employees tend to have certain characteristics.
2. Formulation of Concepts: Based on observations, researchers formulate concepts and
constructs to represent key elements or variables related to the phenomenon under study.
These concepts are the building blocks of the theory.
Example: Based on their observations, researchers formulate concepts like "intrinsic
motivation," "extrinsic rewards," "job satisfaction," and "employee engagement" to
represent key elements related to employee motivation.
3. Hypothesis Generation: Researchers develop hypotheses that propose relationships or
explanations for the observed phenomena. Hypotheses are testable statements that serve
as initial propositions for further investigation.
Example: Researchers develop hypotheses, such as "Employees who receive regular
recognition for their contributions (extrinsic reward) are more likely to be intrinsically
motivated and, in turn, have higher job satisfaction and engagement."
4. Data Collection: Researchers collect empirical data through various research methods,
such as surveys, experiments, observations, or interviews. The data collection process
aims to test the hypotheses and gather evidence.
Example: Researchers collect data through surveys that measure variables like
recognition, intrinsic motivation, job satisfaction, and engagement among employees
 5. Analysis and Testing: Data is analyzed to evaluate whether the hypotheses are supported
or refuted. Statistical analysis, qualitative analysis, or other methods may be used to
assess the data.
Example: Data is analyzed using statistical methods (e.g., regression analysis) to assess
whether the hypothesis is supported. The analysis shows a significant positive correlation
between recognition and intrinsic motivation.
6. Refinement: If the hypotheses are consistently supported by the data, researchers refine
and expand the conceptual framework. They may modify or extend existing concepts and
relationships, leading to the development of a more comprehensive theory.
Example: Researchers refine the initial concept of "intrinsic motivation" to include
subcategories like "autonomy," "mastery," and "purpose" based on the data analysis. This
refinement leads to a more nuanced understanding.
7. Theory Development: As the empirical evidence accumulates and the theory becomes
more refined, it evolves into a well-developed theory that provides a systematic
explanation of the observed phenomena. This theory may be represented in the form of a
model or a set of principles.
Example: The researchers developed a comprehensive theory called the "Motivation-
Engagement Framework," which explains how extrinsic rewards, intrinsic motivation,
and job satisfaction interrelate to influence employee engagement. This theory outlines
the underlying principles and relationships.
8. Further Testing and Validation: The developed theory is subject to further testing and
validation through additional research. Researchers may seek to confirm its applicability
across different contexts or populations.
Example: To validate the Motivation-Engagement Framework, researchers conduct
follow-up studies in different industries and geographic regions, confirming that the
framework is applicable and robust across various contexts.

Another Example from Business Research:

Let's consider an another example of theory development in business research:
Theory: Resource-Based View (RBV) of the Firm
Process of Development:
1. Observation: Researchers in the field of strategic management observed that some firms
consistently outperformed their competitors over the long term, even in highly
competitive markets.
2. Concept Formulation: To explain this phenomenon, they formulated the concept of
"resources" within organizations, including tangible and intangible assets such as patents,
technology, brand reputation, and human capital.
 3. Hypothesis Generation: Hypotheses were developed, suggesting that firms with unique
and valuable resources would achieve sustained competitive advantage.
4. Data Collection: Researchers collected data on firms' resources, competitive
performance, and market conditions to test the hypotheses.
5. Analysis and Testing: Statistical analysis of the data supported the idea that firms with
valuable and unique resources were more likely to achieve competitive advantage.
6. Refinement: The RBV theory was refined and expanded over time, incorporating
additional concepts such as capabilities and the role of dynamic capabilities in resource
development and utilization.
7. Theory Development: The Resource-Based View theory emerged as a comprehensive
framework explaining how firms can achieve and sustain competitive advantage through
the strategic management of their resources and capabilities.
8. Further Testing and Validation: RBV has been widely tested and validated in various
business contexts, making it a foundational theory in the field of strategic management.
This example illustrates how a theory in business research, like the Resource-Based View theory,
is developed through systematic observation, hypothesis generation, empirical testing, and
ongoing refinement. The resulting theory provides valuable insights for understanding
competitive advantage and strategic decision-making in organizations.
 Chapter 5: Ethical Issues in Business Research

1. Definition of Ethics
2. Rights and Obligations of the Respondent
3. Rights and Obligations of the Researcher
4. Rights and Obligations of the Client (User)
5. Types of Ethical Misconduct in Research

1. Definition of Ethics:
Ethics refers to a set of moral principles, values, and standards that govern human behavior and
guide individuals and organizations in distinguishing right from wrong. In the context of research
and academia, ethics pertains to the moral principles and norms that researchers, institutions, and
participants should adhere to in the conduct of research. Ethical considerations in research
encompass issues related to fairness, integrity, honesty, respect, responsibility, and the protection
of human rights.
2. Rights and Obligations of the Respondent:
Respondents, also known as research participants, have certain rights and obligations in the
research process:
 Rights: Respondents have the right to informed consent, privacy, confidentiality, and
protection from harm. They should be treated with respect and dignity, and their
autonomy and well-being should be safeguarded.
 Obligations: Respondents are generally obligated to provide accurate and truthful
information to the best of their ability. They should also comply with any agreed-upon
terms or conditions for participation in the research.
3. Rights and Obligations of the Researcher:
Researchers have specific rights and obligations in conducting research:
 Rights: Researchers have the right to conduct research with integrity, honesty, and
intellectual freedom. They have the right to publish their findings and protect their
intellectual property.
 Obligations: Researchers are obligated to obtain informed consent from participants,
ensure the privacy and confidentiality of data, conduct research with honesty and
transparency, report findings accurately, and adhere to ethical guidelines and standards
established by their institutions or professional organizations.
4. Rights and Obligations of the Client (User):
The client or user of research may be an organization or individual commissioning or utilizing
research for specific purposes:
  Rights: Clients have the right to receive accurate and unbiased research findings that
meet their objectives and needs.
 Obligations: Clients are obligated to ensure that the research they commission adheres to
ethical standards. They should not request or use research for unethical purposes, such as
manipulating data or misleading the public.
5. Types of Ethical Misconduct in Research:
Ethical misconduct in research can take various forms, including:
 Plagiarism: Presenting someone else's work, ideas, or words as one's own without proper
attribution.
 Falsification: Manipulating research data or results to make them appear different from
what they actually are.
 Fabrication: Inventing or completely making up data or results that do not exist.
 Misleading Reporting: Selectively reporting research findings to emphasize certain
outcomes while downplaying or omitting others, leading to a biased or misleading
representation of the research.
 Failure to Obtain Informed Consent: Conducting research involving human subjects
without obtaining their informed and voluntary consent.
 Violation of Confidentiality: Breaching the confidentiality of research participants' data
or information without proper consent.
 Conflict of Interest: Failing to disclose financial, personal, or professional conflicts of
interest that could bias research findings or compromise objectivity.
 Harming Participants: Engaging in research practices that cause physical or
psychological harm to participants or violate their rights.
 Publication Bias: Selectively publishing research findings based on their outcomes (e.g.,
publishing positive results while not publishing negative results), which can distort the
overall knowledge base in a field.
Addressing and preventing ethical misconduct in research is crucial to maintaining the
credibility, integrity, and trustworthiness of scientific and scholarly endeavors. Researchers,
institutions, and organizations should establish and adhere to ethical guidelines and standards to
ensure responsible research conduct.