IDEAS home Printed from
   My bibliography  Save this article

The Theory of the Business, Falsification and Avoiding Managerial Unawareness


  • Doron Faran

    () (Department of Industrial Engineering and Management Ort Braude Academic College of Engineering, Karmiel, Israel)


Organizational strategy is based, too often implicitly, on a theory about the organization's environment. Although the falsity of this theory puts the entire strategy at risk, managers are usually unaware of both the theory and the peril. The issue of theory falsification is mostly associated with the philosopher Karl Popper, but unfortunately the management literature identifies with his rival, Thomas Kuhn. The wish to apply Popper's doctrine in the managerial context faces another difficulty – the formation of the theory. Whilst Popper sketches a hierarchical structure of a theoretic system, managers hold a one-tier theory-of-action that harms falsification. An adaptation of the Popperian method for the managerial context is suggested and examined through Action Research. The findings indicate that a careful extraction of an upper-level theory from the theory-of-action and its testing through derivable scenarios enables early falsification, namely before the actions are taken.

Suggested Citation

  • Doron Faran, 2009. "The Theory of the Business, Falsification and Avoiding Managerial Unawareness," Interdisciplinary Management Research, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 5, pages 89-101.
  • Handle: RePEc:osi:journl:v:5:y:2009:p:89-101

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. David Dequech, 2000. "Fundamental Uncertainty and Ambiguity," Eastern Economic Journal, Eastern Economic Association, vol. 26(1), pages 41-60, Winter.
    2. Durand, Thomas & Mounoud, Eléonore & Ramanantsoa, Bernard, 1996. "Uncovering strategic assumptions: Understanding managers' ability to build representations," European Management Journal, Elsevier, vol. 14(4), pages 389-398, August.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Organizational learning; Philosophy of science; Strategy; Theory-of-action; Unawareness;

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:osi:journl:v:5:y:2009:p:89-101. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Hrvoje Serdarusic, PhD). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.