Empirical sciences are systems of theories. Scientifics theories build up the human’s knowledge realm through explaining the phenomena and develop it by raising new issues and participating in the formation of new theories in responding them .
This article presents a systematic method for theory building in managerial Studies as well as human oriented researches. The theories take shape by means of extracting and organizing the “concepts” hidden in the research subjects. This logic merges the empirical knowledge (singular statement)with the theorems (universal statements) by justification and generates new deductive theorems with scientific validity. Thus, in the present research “Grounded Theory”(GT) was presented as a widely accepted methodology and the theory building process was explained by means of GT.
An experience of theory building in managerial research was then presented to enlighten the process more clearly. This research studied twelve failed companies to find out the reasons behind the crashed strategies and the findings were presented in the pattern of two theories. The trustworthiness of the two theories was introduced through "falsification" at the end of the article.
The main purpose of this research was to familiarize the human science researchers with “theory building” and to report an actual work through the use of this me methodology. Even though it was restricted to summarizing due to its short structure.