For many people a theory and a model may mean the same thing. These words are used loosely by people in daily life as well as in business speak. To grasp management concepts clearly, and to apply theories and models correctly, it is important to have clear definitions of words. This is my take on the subject – lets have your views.

THEORY

According to Oxford dictionary , theory is “a supposition or a system of ideas intended to explain something, especially one based on general principles independent of the thing to be explained”, or “a set of principles on which the practice of an activity is based.”

Merriam-Webster Learners dictionary defines theory as “an idea or set of ideas that is intended to explain facts or events”, or “an idea that is suggested or presented as possibly true but that is not known or proven to be true.”

In a nutshell, theory is an idea, a suggestion or a proposition put forward to explain something based on flimsy evidence or experience, but that which has not, or cannot, be verified to be true in all cases.

From management perspective, a theory is an explanation of why and what leads to certain behaviours in people.

An example of management theory is Maslow’s Hierarchy of Needs, which states that people are motivated on needs that are hierarchical. When one need is satisfied, then people are motivated to fulfil another need. As Maslow’s suggestion cannot be verified to be true in all cases of human motivation, it does not become a rule or a fact, thus it remains a proposition – or a theory.

MODEL

Oxford dictionary’s description of model includes “a thing used as an example to follow or imitate” or “a simplified description, especially a mathematical one, of a system or process, to assist calculations and predictions.” Merriam-Webster includes “a description or analogy used to help visualize something (as an atom) that cannot be directly observed.”

In management context, a model is an explanation of how something works, not why it work in a particular way. Model addresses ‘as-is’ situation, thus it could be a description of market forces interactions, it could be a process by which people learn or it could be a pattern of behaviour. Models do not answer ‘why’ something is done – for example, why do people learn.

Example of a model is David Kolb’s Learning Model which suggested that learning is a continuous cycle, with four processes: concrete experience, observation of and reflection on that experience, formation of abstract concepts based upon the reflection, and testing the new concepts.

Models can be quite accurate representation of a reality but there still could be elements of uncertainty. Hence, multiple models may exist of same situation or reality.