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This chapter focuses on the building blocks of theory, to guide purchasing and supply management researchers in understanding theory and developing their own theories. We begin by defining theory and describing its usefulness in designing and implementing high quality purchasing and supply management research. Theory is described in terms of its philosophical orientation and level of theoretical abstraction, with examples of its potential use in purchasing and supply management research. The primary focus of the chapter is on the building blocks of theory: constructs, relationships, domain, and predictions. We show how they work together in building basic theoretical propositions, enhancing the propositions to develop more advanced theoretical propositions and linking the propositions together to build theory. We provide detailed purchasing and supply management examples to illustrate this process.

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