Truth or Dare: Management Theory at a Crossroads The Harvard community has made this article openly available. Please share how this access benefits you. Your story matters Citation Fung, Ray. 2014. Truth or Dare: Management Theory at a Crossroads. Doctoral dissertation, Harvard Business School. Citable link https://nrs.harvard.edu/URN-3:HUL.INSTREPOS:37367805 Terms of Use This article was downloaded from Harvard University’s DASH repository, and is made available under the terms and conditions applicable to Other Posted Material, as set forth at http:// nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of- use#LAA Truth or Dare: Management Theory at a Crossroads A dissertation presented by Ray Fung to The Technology and Operations Management Unit at Harvard Business School in partial fulfillment of the requirements for the degree of Doctor of Business Administration in the subject of Technology and Operations Management Harvard University Cambridge, Massachusetts May, 2014 C ©2014 Ray Fung All rights reserved. D Dissertation Advisor: Clayton Christensen Ray Fung Truth or Dare: Management Theory at a Crossroads Abstract This dissertation examines the state of management theory, whether as espoused by the (largely self-proclaimed) gurus, or by management academics. Given that philosophers of science have determined that theory is supposed to provide reliable, non-obvious predictions I test whether management theory meets those requirements. I examine certain famous guru works for reliability through a case-study method. I examine the published results of management academia through a statistical analysis. I examine the non-obviousness of published management academia’s hypotheses through a series of interviews and by posing a survey of those hypotheses to volunteers untrained in management knowledge to determine whether they find those predictions to be obvious. Management theory is currently found to be wanting. However, I then propose a set of prescriptions that might allow management to become a truly progressive discipline as well as what management academics and gurus could fruitfully deliver to audiences today. iii 1. Management Theory Today – Gurus and Academics ........................................... 1 1.1 The Christensen & Sundahl ‘Theory of Theories’ ........................................ 4 1.2 A Vignette on Epistemology and the Purpose of Theory .............................. 7 1.3 The Enhanced Christensen-Sundahl Model: ............................................... 10 1.4 Structure of the Dissertation .......................................................................... 14 2 Empirical Testability and Falsifiability ................................................................ 19 2.1 The ‘Grid Framework of Empirical Validation’ ......................................... 21 2.2 The Curious Case of the Resource Based View (RBV) Theory .................. 25 2.2.1 How does RBV Define ‘Resources’? ..................................................... 26 2.2.2 How does RBV Define ‘Competitive Advantage’? .............................. 26 2.2.3 Which Resources Provide the Strongest Competitive Advantage? .... 27 2.3 Tautology of RBV ........................................................................................... 27 2.4 The Theory of Core Competency: RBV, Practitioner-Style ....................... 33 2.5 Principal-Agent Theory and Unfalsifiability ................................................ 36 2.6 Conclusions ...................................................................................................... 40 3 Non-Triviality .......................................................................................................... 41 3.1 Introduction ..................................................................................................... 43 3.2 Why is Non-Obviousness Important? ........................................................... 45 3.3 Obviousness of Academic Hypotheses in Top Journals: ............................. 46 3.4 Conclusion ....................................................................................................... 53 4 Empirical Testing & Prediction Validation .......................................................... 55 4.1 The Grid Framework ..................................................................................... 58 4.1 Case Study #1 ‘In Search of Excellence’ ....................................................... 62 4.2 Case Study #2: ‘Good to Great’ .................................................................... 68 4.2.1 Did Collins validate his G2GSS findings? ............................................ 76 4.2.2 “The Law of Truly Large Numbers” .................................................... 77 4.2.3 The Importance of When a Statistical Calculation Was Conducted. 85 4.2.4 Case Studies Conclusion ......................................................................... 88 4.3 The Statistical Validity of Management Academia ..................................... 90 4.3.1 Statistical Anomalies of ‘Significant’ Results Across the Literature . 90 4.4 Conclusion ....................................................................................................... 93 555 Causality .................................................................................................................. 94 5.1 Why is Causality Important? ....................................................................... 100 5.2 The Establishment of Causality Through Time Sequences and Leads/Lags 101 5.3 Control Variables .......................................................................................... 107 5.4 Exogenous-Shocks ......................................................................................... 113 5.5 How ‘Causal’ is the Published Literature? ................................................ 120 6 Continuous Testing ............................................................................................... 123 6.1 Are Management Theories Ever Later Ejected for Being Tautological? 126 iv 6.2 Are Management Theories Ever Later For Being Rendered Trivial? ..... 129 6.3 Are Management Theories Ever Ejected Empirically Invalidity? ........... 131 6.4 Are Management Theories Ever Ejected for Non-Causality? .................. 133 6.5 Conclusion ..................................................................................................... 135 7 Have Any Management Theories Become Paradigms? .................................... 137 7.1 Might Individual Theories Be Progressing Even if the Field is Not? ....... 137 7.2 A Case Study of Conflict: A Tale of Two Theories .................................... 141 7.3 TCE and RDT: A Quick Overview ............................................................ 143 7.3.1 Step 1: Falsifiability of TCE/RDT ...................................................... 146 7.3.2 Step 2: (Non)Obviousness of TCE/RDT ............................................ 147 7.3.3 Steps 3&4: (Initial) Validation and Causal Analysis of TCE/RDT .. 149 7.3.4 Step 5: Retesting and Revalidation: Falling off the Pyramid ........... 149 7.3.5 Summary and Recommendations Regarding Theoretical Dissensus 155 8 Final Conclusion: Proposals, Recommendations, and Final Thoughts .......... 162 8.1 One Potential Proposal: How About More Qualitative Research? ........ 164 8.2 How About Bringing Back the Practitioners? ............................................ 166 8.3 How about ‘Dedicated Research Cadres’? ................................................. 171 8.4 Whither Ejection? ......................................................................................... 173 8.4 You Say You Want a Revolution? Follow the Principles of Research .... 177 8.5 Two Immediate Deliverables: Dissensus and Pedagogy ........................... 185 Abbreviated Bibliography ............................................................................................... 196 v Figure 1 ............................................................................................................................... 6 Figure 2 ............................................................................................................................. 14 Figure 3 ............................................................................................................................. 20 Figure 4 ............................................................................................................................. 22 Figure 5 ............................................................................................................................. 23 Figure 6 ............................................................................................................................. 24 Figure 7 ............................................................................................................................. 25 Figure 8 ............................................................................................................................. 30 Figure 9 ............................................................................................................................. 31 Figure 10 ........................................................................................................................... 32 Figure 11 ........................................................................................................................... 35 Figure 12 ..........................................................................................................................