Philosophy of Science & Business Administration

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Last updated: June 25, 2019

Philosophy of Science Topic Question: ‘In what sense do you think International Business Studies (IBS) is scientific or not scientific? Illustrate your point of view with a case from International Business Studies. ’ Introduction In this essay we will first elaborate on the early economists and their view on science. Then we will, with the use of possible philosophies of science, discuss to what extend IBS is scientific or not.

Eventually we will summarize what we have discussed in the conclusion.But what is science? Many definitions are present and used in our society, we will start using a definition that we believe is quite complete: according to Merriam Webster’s Dictionary, the definition of science is “knowledge or a system of knowledge covering general truths or the operation of general laws especially as obtained and tested through scientific method. Such knowledge or such a system of knowledge concerned with the physical world and its phenomena. ” Main body The rise of the early economistsIn his book “The Worldly Philosophers: The Lives, Times And Ideas Of The Great Economic Thinkers“ Robert Luis Heilbroner describes the great economic thinkers that our world has known. In the first chapter of his book, he describes how society has evolved over time and has caused for an economic system to develop that called for scientific analyses. In the next paragraphs a short outline will be given of his description of the developing need for economists. Since the beginning of civilization, humans have depended upon each other for their survival.If a certain task in society was not being fulfilled, it would hurt everyone individually as well as society as a whole.

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From this perspective, it has always been in every individual’s best interest to have all tasks in society fulfilled. In early times this ground rule led to a very basic economic system that was either based on tradition or command. In the Middle Ages it was very common to have profession being passed on from generation to generation. This warranted for a balanced workforce in each branch and made the phenomena of ‘profit’ or ‘personal gain’ not only unnecessary, but also unheard of.If not determined by tradition, or custom, the economic survival was steered by command. One can think of dictatorship in the Soviet Union or the absolute authority of the Egyptian pharaoh’s who coordinated the construction of the pyramids. For a very long time, humans have managed to preserver their economic survival through these two methods: custom or command.

The economic system was therefore very simple and quite evident and didn’t call for any analyses at scientific level. It was not until profit became a more accepted phenomenon, that a true economic revolution caused a third economic survival system to develop: the market system.In the market system, everyone does what he or she essentially thinks is best for themselves. If everyone pursues the highest personal gain possible, in the end this will balance out and all tasks will be done. This new economic system was a lot more complex than the solutions of custom or command and so the revolution also brought forth economists who analyzed and mapped the complexities of this new system. In 1776 Adam Smith wrote the famous “Inquiry into the Nature and Causes of the Wealth of Nations” which was the first great work to start off a whole new era to follow.International Business Studies As presented in class International Business Studies is based and formed by Science, Philosophy and Techniques which all together lead to a certain goal. [1][pic] Source: slides lecture 1, H.

de Regt, 2008 On the first examination of this picture we would like to state that the three aspects above, are dependent on each other and altogether form IBS. This can be supported by the following statement: “science is the process of first gathering information, then developing hypotheses on possible solutions and verify by analysis and then give your findings and ecommendations”1. This is in line with the definition presented in the introduction and hence for now we would like to state that to some extend IBS is indeed scientific. “We need science to ground our tools in business science”[2].

We will further examine the essay question with the use of some among other theories, (logical) positivism and critical rationalism which we will use in accordance with what we have experienced here at University as IBS students. Positivism, Hermeneutics and Logical positivismAccording to Comte “societies progress through three distinct stages of intellectual development”3. Since each science passes through these stages independently, we will elaborate now on the final stage which is the positive stage and later on the theological and metaphysical stage. “At this stage scientists no longer speculate or read books to find answers (metaphysical science is being rejected), they gather evidence, try to find regularities between observations and ask themselves how phenomena arise, not why”3 When applying this theory IBS is to some extend scientific.But only to the extend that, when performing some assignments, like the Project Assignments, students have to gather evidence to solve the problem. However gathering evidence means observing as well and can thus also include some bias due to sensory perceptions. We can state that “the combination of observation and theorizing makes good science”3.

Whereas positivists state that there is no difference between social and natural sciences, Hermeneutics do, and therefore also find the theological and metaphysical stage important.Dilthey introduces the method of Verstehen “which is the imaginative or dramatic skill to project oneself imaginatively in other people’s shoes and is seen as the foundation of the social sciences, it also could be a source for generating hypotheses”3. ”. In IBS an important part in solving problems and gathering evidence is to inventory perspectives of all the parties involved in the problem, therefore it is necessary to imaginatively replace yourself into another person by using the Verstehen method.

However one cannot be objective using the Verstehen method according to the book since “one cannot leave behind his own cultural aggage, preconceptions and presuppositions” Hence, this pleads for the statement that IBS is not scientific. The logical positivists agreed with Hume’s statement that “knowledge results from either abstract reasoning (logic) or experimental reasoning (observation). and they stated that if a statement cannot be empirically verified, it is meaningless”3. “Eventually it turned out that verification was not an objective process since it takes place in one’s own specific mind”. Hence, IBS is not scientific since in this study one verifies.

Critical rationalismAs a response to the classical empiricism, the Austrian philosopher Karl R. Popper developed a philosophy which he named ‘critical rationalism’. In his book ‘The logic of scientific discovery’ from 1959, he criticizes the observationalist-inductivist theory that had grown out of the classical empiricism. Popper reasoned that if a theory is supported by all observed data, this in fact means the theory is not scientific, for one can never observe all data and a finite number of observations does not rule out the possibility of the existence of data that would prove otherwise.Simply stated: “A finite set of observed black ravens does not show the truth of the general statement ‘All ravens are black,’ nor does it assign a probability other than infinitely close to 0. But, a single white raven would show that the general statement ‘All ravens are black’ is false! ”[3] Popper stated that verification of a theory, and thus induction, is impossible and an illogical approach. However, it is possible to try to prove a theory wrong by testing it.

If it is falsified, you have gotten one step closer to the truth, if it could not be falsified, it is a corroboration of the theory, but never a verification.According to Popper, mankind will never be able to grasp the full truth, we can only learn from our mistakes and by taking little steps, gradually growing closer to knowing the truth. An often heard statement in business and economics is: ‘Past performance is no guarantee for future results,’ which is in fact a statement supporting Popper’s critical rationalism and the statement that IBS is scientific. It implies that the theories that are being used to predict future outcomes are based on test results from the past that have not yet been proven to be false.

The assumption that the theory is falsifiable fits in the realm of critical rationalism. However, according to the book[4] one of the main points of critique regarding Popper’s critical rationalism is that falsification is being used to make the distinction between sciences and non- or pseudo-sciences, while pseudo-sciences can use falsifiable theories as well. According to Popper’s own theory, this would imply that the fact that IBS produces falsifiable theories, does not automatically make it a science. ConclusionIn our quest to find an answer to the question whether or not International Business Studies can be considered scientific, we have come across history and theories that have shown us different perspectives on the matter. First of all, we considered Heilbroner’s view on the rise of the early economists, which put the entire question in the perspective of history.

As he explained, for centuries there was no need for economists, because of the simple fact that there was no economy based on the market system that we now know.The field of economic science is thus fairly young and does not have the rooted and respected tradition like many other fields. It is therefore understandable that as of today, questions are still being posed upon the validity of economy as a scientific field. When considering the theories of positivism, hermeneutics and logical positivism, we came to the conclusion that not speculating and gathering information in the positive stage is the only aspect that follows from the theory of positivism that supports IBS to be scientific.The other concepts like verstehen/verifying that are being used in IBS, are not considered scientific. In critical rationalism, the method of deduction rather than induction is being used to come closer to the truth, which is also the approach used in IBS: a theory is maintained until it is proven to be wrong. This would plead for IBS being scientific.

But the theory of critical rationalism encaptures its own downfall, because non-science can also produce falsifiable theories and thus IBS could also be non- or pseudo-scientific.In the end, neither the positivist, nor the critical rationalist approach manages to produce a satisfying definition of what is, or what is not science and it is thus impossible to determine whether or not IBS is science. Note that our quest for an answer in this matter is an inductive approach which is disputable from a critical rationalist viewpoint to begin with. Let us therefore conclude with our own opinion in the matter. We believe that IBS is indeed scientific.IBS meets all the criterion of the description of science as given to us in class: “science is the process of first gathering information, then developing hypotheses on possible solutions and verify by analysis and then give your findings and recommendations. ”[5] Although it might take some more centuries to come before the field of economic science will have conquered a respectable position among the many other vested fields of science, we believe IBS would be done injustice if not considered scientific. ———————– [1] slides lecture 1, OC&C H.

de Regt, 2008 2] slides lecture 4, H. de Regt, 2008 3 De Regt, H. , Dooremalen, H. & Schouten, M.

, Exploring Humans. An introduction to the philosophy of the social sciences, Amsterdam: Boom Publishers, 2007 3 De Regt, H. , Dooremalen, H. & Schouten, M. , Exploring Humans.

An introduction to the philosophy of the social sciences, Amsterdam: Boom Publishers, 2007 [3] Slide 14, lecture 5, H. de Regt, 2008 [4] De Regt, H. , Dooremalen, H. & Schouten, M. , Exploring Humans. An introduction to the philosophy of the social sciences, Amsterdam: Boom Publishers, 2007 [5] slides lecture 1, OC&C H.

de Regt, 2008

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