|Many business and social science research programs have come
under attack as not being relevant or worthwhile [1,2] expenditures of
money in a research university. In times of financial difficulty, business
school research has been viewed as either not impacting practice
sufficiently, as insufficient in preparing students for business careers, or
as too vocational (which some question as a goal of higher education).
Pfeffer and Fong  gave an analysis of the criticisms and the facts
related to these impressions, and the reality continues that the general
perception of many is that much research in business is not relevant
or cannot be generalized into practice. In this editorial we argue that
accounting and marketing research can be both practically relevant
and theoretically well-grounded, if a paradigm of application driven
theory is adopted and rigorously applied.
|We start with a brief description of the nature of research,
simplifying it into two different dichotomies: 1) basic research and
non-basic research on one continuum, and 2) applied research and
pure research on the other. We then give illustrations from science,
accounting and marketing to demonstrate each of the four possible
combinations of research: pure-basic, pure-non basic, applied-basic
and applied non basic when these terms are dichotomized. We discuss
the lasting impact of basic research and argue for the importance of
basic research as being both applied and practical when the theoretical
constructs developed arise from a specific application and are then
generalized. We call this research approach “Application Driven
Theory” and give historical examples of impactful application driven
theory in accounting and marketing. An application driven theory
approach to research development insures that theories created are
relevant to practice .
|Basic research is research that is foundational in that it either opens
new lines of research or cuts off existing lines of research. Basic research
allows generalizations that can impact areas outside the original area
for which it was invented. Examples of this from the history of science
include the invention of probability theory by Pascal and Fermat, the
development of the Arabic numeral system (taken from the Hindus)
for recording numbers, and Pasteur’s germ theory of disease. That
which is not basic is deemed non-basic.
|The dichotomy (or, conceptualized another way, possible
continuum) between pure and applied research is more difficult, and
comes from the motivation for the research rather than the impact of
the research . Pure research is undertaken for greater understanding
and applied research is undertaken to solve a particular problem or to
be used in a specific practice. Another differentiating factor is that pure
research is more generally disseminated (usually via publications) for
the purpose of increasing the body of knowledge and application areas,
whereas applied research often stops with the particular motivating
application with little effort given to generalizations beyond the
problem which gave rise to the investigation (e.g., industry consulting
situations). We give illustrations of each combination in Table 1.
|Consulting and general problem solving reflects non-basic applied
research. In accounting, a specific audit, tax preparation or preparation of annual statements falls into this category. In marketing, consulting,
designing company specific marketing or advertising plans and product
placements are non-basic and applied.
|Application driven theory resides in the top right quadrant of Table 1. An example of this is Fibonacci’s  book Liber Abaci, which
introduced Arabic numbers to Europe in 1202 to solve the problems in
calculation of mathematics.
|Had he stopped there, it would have been of interest to
mathematicians but little or no other disciplines. Instead he showed
how to apply these results to construct a theory of bookkeeping, of
doing interest calculations and other computations of importance to
merchants. According to David , Paccioli  (who is sometimes
referred to as the father of accounting) copied Fibonacci’s  book
almost in its entirety and popularized the applications (such as double
entry bookkeeping), showing further its uses, and creating another
example of application driven theory. Thus, Fibonacci’s  book had
its origination in an applied problem, but after solving this applied
problem created generalizations, as motivated by Paccioli’s  work,
outside the specific application that initiated the research.
|A similar development (the invention of probability theory in
1654 by Pierre de Fermat and Blaise Pascal) started as a solution to a
particular gambling problem posed by an avid gambler (the Chevalier
de Méré) trying to explain why he kept losing on a gambling bet that
seemed to him to be in his favor. This began the widely known area of
“probability theory”. Probability theory has since spread to affect all
areas of scientific thought, including accounting (e.g., how to take audit
samples) and marketing (e.g., consumer decision-making modeling).
|Another example from marketing research is illustrated by the
development of the Golden Numerical Scale for questionnaire design
. A very practical applied problem (a consumer attitude survey for
a restaurant) motivated the problem: The researchers needed many
repeated scales for multiple different restaurants in a more concise, but
still accurate, presentation format. The practical problem of creating
survey instruments with repeated scales across multiple restaurants by
existing methods would require numerous questionnaire pages. The
solution was to create a new response scale format, which was done to
evaluate multiple restaurants and characteristics on a single continuous
graphical scale. This scale was then generalized to multi-object and
multi-attribute questionnaires in general, and published with the
statistical and measurement properties of the scale investigated for uses far afield from comparisons of consumer attitudes of different
restaurants (e.g., a comparison of varying country images).
|It can be argued that all research in business disciplines must
begin with “Application Driven Theory”. If accomplished rigorously
and scientifically this approach generates research results that are
useful for applied industry issues, as well as having theoretical
construct properties commensurate with the goals of a solid academic
contribution. Not only is Application Driven Theory (i.e., start with
the applied problem and develop or utilize a solid theoretical structure
in its solution approach) relevant for accounting and marketing, but it
is relevant to many (if not all) disciplines in and outside of a business
- American Assembly of Collegiate Schools of Business (1996) AACSB Faculty Leadership Task Force Report.
- Pfeffer J, Fong CT (2002) The End of Business Schools? Less Success Than Meets the Eye. Academy of Management Learning & Education 1.
- Cooper WW, McAlister L (1999) Can research be basic and applied? You bet. It better be for B-schools! Socioecon Plann Sci 33: 257-276.
- Fibonacci L (1202) Liber Abaci.
- David FN (1969) Games, God, and Gambling: A history of probability and statistical ideas. Charles Griffin & Co., London, UK.
- Paccioli FL (1494) Summa de arithemetica, geometria, proportioni e proportionalita.
- Golden LL, Brockett PL, Albaum G, Zatarain J (1992) The Golden Numerical Comparative Scale Format for Economical Multi-Object/Multi-Attribute Comparison Questionnaires. J Off Stat 8: 77–86.
- Gilligan C, Golden LL (2009) Rebranding Social Good: A Social Profit Approach. Academy of Marketing Studies Journal 13: 97-117.