Theory thus become instruments, not answers to enigmas, in which we can rest. We don’t lie back upon them, we move forward, and, on occasion, make nature over again by their aid. (William James, 1907: 46)

Some scholars of organization and strategy expend significant energy disparaging and defending various research methods. Debates about deductive versus inductive theory-building and the objectivity of information from field observation versus that of large-sample numerical data are dichotomies that surface frequently in our lives and those of our students. Despite this focus, some of the most respected members of our research profession (i.e., Simon (1976), Solow (1985), Hambrick (1994), Staw and Sutton (1995), and Hayes (2002)) have continued to express concerns that the collective efforts of business academics have produced a paucity of theory that is intellectually rigorous, practically useful, and able to stand the tests of time and changing
circumstances.
The purpose of this paper is to outline a process of theory building that links questions about data, methods and theory. We hope that this model can provide a common language about the research process that helps scholars of management better understand the roles of different types of data and research, and thereby to build more effectively on each other’s work. Our unit of analysis is at two levels: the individual research project and the iterative cycles of theory building in which a researchers attempt to build upon each other’s work. The model synthesizes and augments other studies of how communities of scholars cumulatively build valid and reliable theory.1 It has normative and pedagogical implications for how we conduct research, evaluate the work of others, train our doctoral students, and design our courses.
While many feel comfortable in their understanding of these perspectives, it has been our
observation that those who have written about the research process and those who think they
understand and practice it proficiently do not yet share even a common language. The same words are applied to very different phenomena and processes, and the same phenomena can be called by many different words. Papers published in reputable journals often violate rudimentary rules for generating cumulatively improving, reliable and valid theory. While recognizing that research progress is hard to achieve at a collective level, we assert here that if scholars and practitioners of management shared and utilized a sound understanding of the process by which theory is built, we could be much more productive in doing research that doesn’t just get published, but meets the standards of rigorous scholarship and helps managers know what actions will lead to the results they seek, given the circumstances in which they find themselves.
Our purpose in this paper is not to praise or criticize other scholars’ work as good theory or
bad theory: almost every published piece of research has its unique strengths and shortcomings.
We will cite examples of other scholars’ research in this paper, but we do so only to illustrate how
the theory-building process works. We hope that the model described here might constitute a
template and a common language that other scholars might use to reconstruct using how bodies of understanding have accumulated in their own fields.

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