Hoorcollege 1 Contemporary Theories
This course aims at teaching students to adopt a critical approach with regard to the validity
of the knowledge presented in much of the management literature.
More specifically:
• Assessing some salient theories and being able to understand the importance of
theory for research in business and management.
• Appraising the value of empirical research that has been carried out to prove/disprove
these theoretical insights.
• Evaluating the usefulness and limitations of these insights for Business and
Management
3 Thema’s: Corporate Social Responsibility, International Corporate Governance, Resource
Based-View
Everyone has theories
We try to make common sense of our daily experiences. We test this perceived reality with
methods and get feedback whether our theory is right or wrong.
However, any good social scientist knows that the facts do not speak for themselves.
Theoretical structures are critical. We need to understand why things happen the way they
do.
Concept: In the mind, abstract, idea generalized from particular instances
From concepts to theories: Theory belongs to the family of words that includes guess,
speculation, supposition, conjecture, proposition, hypothesis, conception,
explanation, model. […] If everything from a "guess" to a general falsifiable explanation has
a tinge of theory to it, then it becomes more difficult to separate what is theory from what
isn't.
You go from reality to science: theories and scientific models to try and explain your
perceived reality.
,From common sense to science
Daily experience vs research methods modelling technologies
Common sense = general views and concepts
Science = theories and scientific knowledge or models
Good theory: explicit, measurable, generalizable, falsifiable
What is theory?
A theory is a system of statements targeted at describing, explaining, and predicting a
real-world phenomenon
• It consists of constructs (i.e., concepts) and propositions (i.e., relationships
between constructs) that collectively presents a logical, systematic, and coherent
explanation of the real-world phenomenon within certain boundaries.
Example: Transaction Cost Theory stipulates that high transaction costs encourage firms to
insource the making of a product or service. Transaction costs depend on Asset Specificity,
Uncertainty or Frequency.
Theory is about abstraction from the observable – Theoretical plane, empirical plane
(cause → effect → consequence). De oorzaken en gevolgen zijn dan observeerbaar, de
effecten zijn niet observeerbaar.
Independent variable → Hypothesis → dependent variable
Scientific thinking: variables
A variable is observable directly, is empirically measurable, is a representation of an
abstract construct
Example: A person’s intelligence is often measured as his or her IQ (intelligence quotient)
score, which is an index generated from an analytical pattern matching test administered to
people. In this case the IQ score is a variable intended to measure the per se unobservable
intelligence construct.
, Scientific thinking: hypothesis
A hypothesis states relationships between variables, is empirically testable, is stated in a
falsifiable form.
Example: In our example, IQ scores and grade point average are respectively operational
measures of intelligence and academic achievement. A hypothesis specifies the expected
relationship between IQ score and grade point average.
Constructs represent classes of observations
Scientific thinking: construct
A construct is an abstract conceptual entity, is inferred from observable actions or states
of phenomena, needs an operational definition to become measurable.
Example: Student Intelligence is a construct, which explains the degree to which a person is
able to absorb knowledge. Since student intelligence usefulness is not empirically
measurable directly, it cannot be a manifest variable
Relations linking constructs
Scientific thinking: proposition
A proposition is a relationship between constructs, is stated in a declarative form, must
be falsifiable, explicitly delineates constructs, typically introduces causality.
Example: An increase in student intelligence causes an increase in their academic
achievement.
