Peter Atkinson …. for deep thinking

10th December, 2023

Introduction to Critical Realism

Critical realism represents a philosophical methodology aimed at comprehending the essence of reality and the influence of human cognition. Originating in the mid-20th century, it emerged as a critique of the positivist and interpretivist models, promoting a more intricate perception of the societal sphere. Central to critical realism is the principle that reality is multi-layered and intricate, existing autonomously from our sensory perceptions or conceptual interpretations.

Tracing its roots, critical realism finds its genesis in the philosophical contributions of Roy Bhaskar, particularly highlighted in his influential work, “A Realist Theory of Science” (1975). Bhaskar’s writings were a reaction to the perceived inadequacies in then-prevailing scientific frameworks, especially positivism, which he argued overlooked the dynamic and stratified nature of reality. Critical realism proposes that reality comprises both discernible occurrences and underlying mechanisms, often invisible, thus contesting the positivist belief in the complete comprehension of reality solely through empirical evidence.

Diverging from positivism, which is centered on tangible phenomena and universal laws, critical realism embraces the social world’s intricacies, acknowledging influences like human interaction, cultural context, and structural factors. It stands apart from interpretivism as well, which underscores subjective understanding of social events. Critical realism asserts the existence of an objective reality that is independent of our interpretations, even as our comprehension of it is shaped by our cultural and historical milieu.

An essential facet of critical realism is its emphasis on the causative mechanisms and structures underlying visible phenomena. This viewpoint encourages an in-depth examination of the reasons and methods underlying social occurrences, going beyond simple descriptions to reveal the foundational processes responsible for these events. Bhaskar delineated reality into three strata: the real, the actual, and the empirical. The ‘real’ includes the foundational mechanisms and structures, existing irrespective of their activation; the ‘actual’ pertains to occurrences that transpire upon the activation of these mechanisms; and the ’empirical’ encompasses the domain of observed events and experiences.

This layered structure accentuates the unique perspective of critical realism in interpreting causality. Contrasting with positivist methodologies that emphasize regular patterns and correlations among observable variables, critical realism endeavors to uncover the deeper, often unseen, generative mechanisms responsible for these patterns. This approach holds particular significance in the realm of business research, where phenomena like market trends, organizational conduct, and consumer preferences are frequently the outcome of complex, interconnected factors not immediately visible.

Theoretical Foundations of Critical Realism

The field of critical realism, a philosophical approach for interpreting social phenomena, largely draws on the seminal works of Roy Bhaskar. This framework’s expansion and application across various disciplines are credited to a wider array of scholars beyond Bhaskar.

Key among these thinkers are Margaret Archer, Andrew Sayer, and Douglas Porpora, whose contributions have notably shaped critical realism. Archer’s exploration of the morphogenetic approach (1982; 1994), stands out for its innovative examination of the relationship between structure and agency. She proposes a dynamic interplay where structures influence human interactions, which then reshape these structures. Her insights into the temporal nature of social processes and the independence of social structures have informed the understanding of organizational change and development, particularly in the business sector.

Andrew Sayer has played a pivotal role in advancing critical realism’s methodological framework (1997). He advocates for a socially engaged, value-conscious scientific approach, highlighting the necessity to comprehend the normative aspects of social life for a true assessment of human motivations and actions. His perspective brings to light the ethical aspects of business research, especially in domains like corporate social responsibility and stakeholder theory.

Douglas Porpora’s contributions enrich the critical realist dialogue, especially in social ontology. His analysis of social structures and their emergent properties elucidates the influence of institutional contexts on individual and collective actions within organizations (2016). His views are particularly pertinent in deciphering power dynamics, organizational culture, and leadership roles in business.

Moreover, Dave Elder-Vass’s investigations into technology and its societal implications (2015), are significant in the realm of business research in an increasingly digital world. His theories on the causal powers of social and technological structures provide a nuanced framework for examining the influence of technology on business practices and consumer behavior.

Thus, critical realism in business research embodies a robust, multi-faceted methodology. It facilitates an in-depth examination of varied phenomena, ranging from market trends and consumer behavior to organizational dynamics and the impact of technology. The approach underscores the layered nature of reality, the significance of underlying mechanisms, and the dynamic interaction between structure and agency. Critical realism not only fosters theoretical progress but also yields practical insights for tackling modern challenges in business management and research.

The relevance of critical realism in business research lies in its ability to bridge the gap between the empirical and the real, offering a more holistic understanding of business phenomena. By acknowledging the existence of underlying mechanisms and structures, critical realism enables researchers to explore the ‘why’ behind business events and trends, going beyond mere description or subjective interpretation. This is crucial in areas such as market dynamics, organizational change, and consumer behavior, where surface-level observations often fail to fully capture the complexity of underlying processes.

One illustrative example of critical realism in business research is its application in the study of organizational culture. A critical realist approach would not only examine the observable aspects of an organization’s culture, such as employee behaviors and company policies, but also seek to uncover the deeper beliefs, values, and power structures that shape and sustain these observable traits. Such an approach can provide insights into how organizational cultures evolve, how they influence employee engagement and performance, and how they can be effectively managed or changed.

Another area where critical realism has been effectively applied is in understanding market dynamics. Traditional approaches might focus on statistical trends and consumer behavior patterns, but a critical realist approach looks deeper into the socio-economic structures, industry norms, and regulatory frameworks that drive these trends and patterns. For instance, a critical realist study of the housing market might explore not just the patterns of buying and selling but also the underlying factors such as economic policies, social inequalities, and cultural attitudes towards homeownership.

In comparison with other research paradigms, critical realism offers a more comprehensive approach. Where positivism might overlook the importance of unobservable mechanisms, and interpretivism might neglect the role of objective structures, critical realism acknowledges both. It allows for the integration of quantitative and qualitative methods, enabling researchers to draw on a wide range of data and perspectives. This integrative approach is particularly useful in business research, where both statistical trends and human experiences are important.

Furthermore, critical realism’s focus on causation is particularly beneficial in business research. By seeking to understand the causal mechanisms behind phenomena, critical realists can provide more profound insights and more robust explanations than those offered by purely descriptive or interpretive studies. This is invaluable for practitioners and policymakers who need to understand not just what is happening in the business world, but why it is happening and how it can be influenced or changed. By applying this paradigm, researchers can also gain insights that are both deep and broad, contributing to more effective management practices and more informed business strategies.

Methodological Implications of Critical Realism

The methodological implications of critical realism in research are profound and multifaceted, influencing how investigations are designed, conducted, and interpreted. Its emphasis on understanding the deeper structures and mechanisms behind observable phenomena, necessitates a distinctive approach to research methodology that is both challenging and advantageous.

Critical realism advocates for methodological pluralism, supporting the use of both qualitative and quantitative methods (Van Bouwel, J. ed., 2003). This approach is grounded in the belief that understanding the complexity of social phenomena requires multiple perspectives and tools. Qualitative methods are valued for their ability to explore the meanings, experiences, and contexts of social actions. They are particularly useful in uncovering the subjective experiences and understandings of individuals within organizations or markets. Quantitative methods, on the other hand, are employed to identify patterns and regularities that can suggest the presence of underlying structures and mechanisms. This blend allows researchers to not only describe phenomena but also to explore the causal mechanisms that underpin them.

Applying critical realism in research presents certain challenges. One of the primary challenges is managing the complexity that comes with combining qualitative and quantitative methods. Researchers must be skilled in both to effectively integrate them, ensuring that the insights from one method inform and enhance the findings from the other. Additionally, identifying and conceptualizing the underlying mechanisms and structures posited by critical realism can be demanding, as these elements are often not directly observable.

Despite these challenges, the advantages of a critical realist approach are significant. By combining qualitative and quantitative methods, researchers can gain a more comprehensive understanding of phenomena. This approach allows for the exploration of complex questions that neither method could adequately address alone. It also provides a more robust basis for developing theories that are grounded in empirical reality but also informed by a deeper understanding of the underlying causal mechanisms.

In critical realism, the integration of qualitative and quantitative methods is not merely about using both in a single study but about their meaningful integration to provide a more comprehensive understanding. This could involve using qualitative methods to explore the context and meaning of phenomena, which then informs the development of quantitative measures and models. Conversely, quantitative findings can identify patterns and regularities that can be further explored and explained through qualitative research.

Critical realism also emphasizes the role of reflexivity and the researcher’s position in the research process. Reflexive practice involves researchers being aware of and critically reflecting on their assumptions, biases, and the impact of their social and cultural backgrounds on their research. This is crucial in critical realism, as the researcher’s perspective can influence all stages of the research process, from the framing of research questions to the interpretation of data. Acknowledging and reflecting on these influences enhances the credibility and rigor of the research.

Critical realist research is guided by the twin processes of abduction and retroduction. Abduction involves the generation of plausible explanations for observed phenomena, while retroduction involves the drawing of inferences about the unobservable structures and mechanisms that give rise to those phenomena. This interplay of deduction and induction allows researchers to move beyond mere description and delve into the causal processes that underpin business phenomena. By recognizing the existence of unobservable factors, critical realist researchers can move beyond simplistic explanations and uncover the deeper causal processes that shape organizational behavior and individual decision-making.

Its ability to accommodate both etic and emic perspectives further strengthens its relevance for business research. Etic perspectives, rooted in external observation, provide insights into universal patterns and shared characteristics. Emic perspectives, derived from within the social context, offer deeper understandings of the meanings and interpretations of individuals within that context. Critical realist research seeks to integrate these two perspectives, recognizing that both external structures and individual experiences play a role in shaping business phenomena.

Critical realism does not relegate individuals to passive recipients of external forces. Instead, it acknowledges the role of agency, the ability of individuals to act intentionally and influence their circumstances. While structures and mechanisms set the stage, individuals possess the agency to interpret, respond, and potentially transform those structures. This recognition of agency underscores the importance of understanding the interplay between structure and individual action in business settings

Thus, the methodological implications of critical realism offer a robust framework for conducting research that is both deep and broad. By embracing methodological pluralism, addressing the challenges of integration, and recognizing the importance of reflexivity, researchers can develop a more comprehensive understanding of complex business phenomena. This approach not only enriches academic inquiry but also provides practical insights for business practitioners and policymakers

Critique and Debates Surrounding Critical Realism

Critical realism, despite its comprehensive approach in understanding social phenomena, is not without its critiques and debates. These critiques primarily revolve around its philosophical assumptions, its comparison with other paradigms such as postmodernism and constructivism, and the challenges associated with its practical application in business research.

One of the major critiques of critical realism concerns its claim to uncover underlying mechanisms and structures that are not directly observable. Critics argue that this aspect of critical realism verges on speculative, as it involves making inferences about entities and processes that cannot be empirically verified. The counterargument to this critique is that critical realism does not solely rely on empirical evidence but also on a logical and theoretical understanding of how things work. This approach is deemed necessary to understand complex phenomena that cannot be fully explained by observable data alone.

Another critique is that critical realism’s emphasis on structures and mechanisms may underplay the role of human agency. Critics suggest that this focus can lead to a deterministic view of social phenomena, where individuals are seen as merely conditioned by underlying structures. However, proponents of critical realism argue that it actually offers a more balanced view, acknowledging both the power of structures and the agency of individuals in shaping social realities.

Critical realism is often contrasted with postmodernism and constructivism, particularly regarding their respective views on truth and reality. Postmodernism, with its skepticism towards grand narratives and emphasis on the subjective construction of reality, appears to be at odds with the critical realist assertion of an objective reality (Lyotard, 1994). Constructivism, which posits that knowledge and meaning are constructed rather than discovered, also diverges from critical realism’s view that there exists an external reality independent of our perceptions.

However, critical realism does not entirely dismiss the views of postmodernism and constructivism. Instead, it tries to bridge the gap between the existence of an objective reality and the subjective experiences of individuals. Critical realists argue that while our understanding of reality is indeed mediated by social and cultural contexts (a point shared with constructivism and postmodernism), this does not negate the existence of a real world that can be objectively investigated.

In the context of business research, the practical application of critical realism has been a subject of debate. Critics point out the difficulty in applying its principles in empirical research, particularly in terms of operationalizing the concept of underlying mechanisms and translating critical realist philosophy into research methods. There is also a concern that the complexity of critical realism may make it less accessible and usable for practitioners compared to more straightforward paradigms.

Proponents, however, argue that the depth and comprehensiveness provided by critical realism are essential for truly understanding and addressing complex business issues. They suggest that the challenges in applying critical realism are outweighed by its potential to provide a more holistic and in-depth understanding of business phenomena, leading to more effective and sustainable business practices.

Ultimately, the most convincing challenge to critical realism is that it only in one direction and cannot be turned reflexively on itself; that is there is a failure of it to get to grips with its own epistemology. So, it cannot address questions about why the real is usually concealed from human perception and what the relationship is between the real and the empirical. When these relationships are simply stated as fact, they take on a mystical air, as though they really meant that “God moves in mysterious ways” (Archer, Collier and Porpora, 2004). This intrusion of theology into social science is, to many, unacceptable.

Future Directions and Conclusion

As we look toward the future of critical realism in business research, several emerging trends and potential cross-disciplinary applications point to its evolving and expanding role. The adaptability and depth of critical realism make it an increasingly influential paradigm in the landscape of business research.

One significant trend is the increasing integration of critical realism with advanced data analytics and big data (Fletcher, 2017). The rise of big data in business offers vast potential for uncovering patterns and trends, and when interpreted through a critical realist lens, it can provide deeper insights into the causal mechanisms behind these patterns. This integration promises a better understanding of consumer behavior, market dynamics, and organizational processes, going beyond mere data-driven insights to reveal the underlying structures and mechanisms at play.

Another emerging trend is the application of critical realism in understanding sustainability and corporate social responsibility (CSR) within businesses (Pez-Vega, 2008; Sanders, 2012). Critical realism’s focus on underlying structures and mechanisms is particularly suited to exploring the complex interplay between business practices, environmental impact, and social responsibility. This perspective can lead to more effective and genuinely sustainable business practices that move beyond superficial CSR initiatives.

The potential for cross-disciplinary applications of critical realism is vast. In fields like economics, sociology, and psychology, critical realism can provide a framework for exploring the intersections between business and these areas. For instance, in behavioral economics, critical realism can help understand the underlying cognitive and social structures that influence economic decision-making. In organizational psychology, it can aid in examining the deeper cultural and structural factors that impact organizational behavior and employee well-being.

Furthermore, critical realism’s emphasis on understanding the deeper layers of reality makes it a valuable approach in emerging areas such as digital transformation and artificial intelligence in business. It can provide insights into how these technological advancements are reshaping business landscapes, influencing consumer behavior, and altering traditional business models.

Critical realism continues to evolve as a key paradigm in business research. Its strength lies in its ability to provide a comprehensive understanding of business phenomena, bridging the gap between empirical observation and the deeper, often hidden, causal mechanisms. As business environments become increasingly complex and interconnected, the depth and breadth offered by critical realism become ever more essential.

The future of critical realism in business research is marked by a greater integration with other disciplines and methodologies, offering richer and more holistic insights. Its application in contemporary issues such as sustainability, technological innovation, and global market dynamics demonstrates its relevance and adaptability to the changing business landscape.

As we move forward, critical realism is poised to play a pivotal role in shaping how business research is conducted and understood. Its emphasis on understanding the complexity of real-world phenomena, combined with its potential for cross-disciplinary applications, positions it as a crucial framework for addressing the challenges and opportunities of modern business.

References

Archer, M.S., 1982. Morphogenesis versus structuration: on combining structure and action. The British journal of sociology, 33(4), pp.455-483.

Archer, M.S., 1995. Realist social theory: The morphogenetic approach. Cambridge university press.

Archer, M.S., Collier, A. and Porpora, D.V., 2004. Transcendence: critical realism and God. Psychology Press.

Bhaskar, R., 1975. A realist theory of science. Routledge.

Bhaskar, R., 1979. The possibility of naturalism: A philosophical critique of the contemporary human sciences. Routledge.

Easton, G., 2010. Critical realism in case study research. Industrial marketing management, 39(1), pp.118-128.

Elder-Vass, D., 2015. Developing social theory using critical realism. Journal of Critical Realism, 14(1), pp.80-92.

Elder-Vass, D., 2022. Pragmatism, critical realism and the study of value. Journal of Critical Realism, 21(3), pp.261-287.

Fletcher, A.J., 2017. Applying critical realism in qualitative research: methodology meets method. International journal of social research methodology, 20(2), pp.181-194.

Lyotard, J.F., 1994. The postmodern condition. The Postmodern Turn: New Perspectives on Social Theory, Cambridge University Press, Cambridge. England, pp.27-38.

Paz-Vega, R., 2008. Corporate social responsibility, action, and performance in international settings: A critical realist perspective. Instituto Tecnologico y de Estudios Superiores de Monterrey (Mexico).

Porpora, D.V., 2016. The recent methods debate in American sociology and how critical realism fits into it. Journal of critical realism, 15(4), pp.342-351.

Sanders, P., 2012. Is CSR cognizant of the conflictuality of globalisation? A realist critique. Critical perspectives on international business, 8(2), pp.157-177.

Sayer, A., 1997. Critical realism and the limits to critical social science. Journal for the theory of social behaviour, 27(4), pp.473-488.

Van Bouwel, J. ed., 2003. Critical realism and methodological pluralism in the social sciences (Vol. 71). Universiteit Gent.