Operations Workshop 2006
Observation to Theory in OM Empirical Science"
One key objective of OM empirical science
is to develop and test theories that explain phenomena of
interest to our professional community. An inductive theory
is a belief that is verifiable by observation and/or experimentation.
In this presentation, we illustrate how the scientific method
is used to build and test OM theory. Specifically, we describe
the process of theory building in OM research using the development
of competitive progression theory (CPT) as an example. The
starting off point is the observed 'sand cone' effect made
by OM scholars researching manufacturing strategy in the late
1980s. These researchers observed that the successful manufacturers
in Japan, Europe and the U.S. had multiple competitive capabilities
and the observed levels of these capabilities appeared to
be cumulative from quality to delivery to flexibility to low
cost. This observation was in stark contrast to the conventional
wisdom of the time - that successful firms make trade-offs
in their capability building, such as quality for low costs.
We describe the theory-building process from how evidence
was collected to the formation of hypotheses that form the
basis of CPT. The presentation highlights the discovery process,
the construct and measurement development, and the empirical
model. We highlight the evolution of thought and the obstacles
in the empirical journey of theory building and testing.
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