Business Research Methods
            Chapter 3. Theory Building
                      Dr. Werner R. Murhadi
              http://www.wernermurhadi.wordpress.com/
                                                www.wernermurhadi.wordpress.com
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             Afterstudying this chapter, you should be able to
             1. Define the meaning of theory
             2. Understand the goals of theory
             3. Understand the terms concepts, propositions,
               variables, and hypotheses
             4. Understand the scientific method
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                                     Theory
            • Students sometimes think their classes or course
              material are “too theoretical” or lacking “practical
              application.”
            • Theories are simply generalizations that help us
              better understand reality. If a theory does not
              hold true in practice, then that theory holds no
              value.
            • Atheory is a formal, testable explanation of
              someevents that includes explanations of
              howthingsrelate to one another.
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                 TwoPurposesOfTheory
         • Understanding, to gain an understanding
           of the relationship among various
           phenomena.
         • Prediction, a theory enables us to predict
           the behavior or characteristics of one
           phenomenonfromtheknowledgeof
           another phenomenon.
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