Inducing Frame‐Breaking Insights through Qualitative Research

• Date: 01 March 2013
• DOI: http://doi.org/10.1111/j.1467-8683.2012.00930.x
• Author: Pratima Bansal
• Published date: 01 March 2013

Commentary

Inducing Frame-Breaking Insights through

Qualitative Research

Pratima Bansal*

The emperor has no clothes. The emperor here is corpo-

rate governance and the clothes are agency theory.

Much corporate governance research continues to be

informed by agency theory, even though the empirical evi-

dence supporting agency theory is, at best, equivocal (Daily,

Dalton, & Cannella, 2003). Agency theory asserts that prin-

cipals (owners) must monitor and control agents (managers)

to protect the owners’ residual claims from the excesses of

self-interested agents. Despite the widespread challenges

directed at the very foundations of agency theory, research-

ers continue to apply it to corporate governance research.

So, why does agency theory continue to dominate corporate

governance research?

The reason, I argue, is because corporate governancerelies

heavily on hypothetico-deductive quantitative research,

which fuels path-dependent theorizing. My intention is not

to rail against agency theory; I believe agency theory has its

place in corporate governance. But agency theory’s strong

roots in economics and f‌inance have contributed to deduc-

tive theorizing, which favors building new theory based

on old. This path dependent theorizing has likely narrowed

the f‌ield of vision. Agency theory has a place in corporate

governance research, but not to the exclusion of alternative

theories. Corporate governance researchers who rely solely

on agency theory are missing the opportunity to f‌ind the

emperor new clothes.

Good theorizing within a system of knowledge often

arises from a balance between deductive and inductive

research. Inductive research generates new theory that is

extended and tested through deductive theorizing. Once

deductive theorizing reaches its empirical boundaries, new

theory is induced from data that stretches the empirical con-

texts. This circular f‌low between inductive and deductive

theorizing builds a robust system of knowledge that can

explain corporate governance in ever-broadening empirical

contexts.

The present knowledge system in corporate governance

is, however, out of balance: there is too much deductive

theorizing and too little inductive. I receive all macro-

qualitative manuscripts in my current role as the Associate

Editor at the Academy of Management Journal. Of the more

than 110 new submissions I have handled, I recall only

two that addressed corporate governance. Some f‌ields of

research, e.g., institutional theory, elicit considerable quali-

tative attention. Corporate governance, on the other hand,

tilts heavily in the quantitative direction, which is surprising

given the equivocality of the evidence in support of its most

favored theory – agency theory.

WHAT IS QUALITATIVE RESEARCH?

To advance my argument, it is important to describe quali-

tative research and how it differs from a quantitative

approach. Qualitative research is based on textual data,

drawn from researchers’ observations, interviews, analyses

of archivalmanuscripts, and other similar sources. Such data

often provide rich accounts of the phenomena (Weick,

2007). These data are textured, nuanced, and elicit three-

dimensional mental images. Textual data are open to mul-

tiple interpretations, so multipleconnections can be made to

a single data point. For example, a CEO’s title might evoke

connections to such concepts as power,greed, and control, or,

alternatively, to leader and benevolence. These connections

then allow researchers to draw patterns within and between

data f‌ields, in order to identify new constructs and the

relationships between those constructs. The ambiguity in

the meanings of words also opens up the opportunities to

re-interpret data either over time or across researchers,

yielding new understandings of the constructs and their

relationships.

Yet, text-based qualitative data also have limitations. The

ambiguity in the meanings of words def‌ies commensura-

tion, making it diff‌icult to reduce qualitative data. Further-

more, qualitative researchers prefer understanding a single

phenomenon deeply, rather than collecting numerous obser-

*Address for correspondence: Pratima Bansal, Richard Ivey School of Business, Uni-

versity of Western Ontario,London, N6A 3K7, Canada. E-mail: tbansal@ivey.uwo.ca

127

Corporate Governance: An International Review, 2013, 21(2): 127–130

© 2012 Blackwell Publishing Ltd

doi:10.1111/j.1467-8683.2012.00930.x