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However there are found positive correlation with the HR practices and business performance there is lacking
the comprehensive theory that explains the phenomen. Researchers should try to open up the ‘black box’ of
the causal relationship between HR components and unit of organizational performance (Becker et al. 2001,
Fleetwood & Hesketh 2010). Latest studies reveal that the HRD investment’s impact on business is not
properly evaluated and therefore the management decision-making process lacks this essential information
(Wang and Wilcox 2006; Swansson 2005; Bunch 2007; Kim and Cervero 2007). Indeed, there is an obvious
need for managers and executives to comprehend whether the HR development in question will produce a
change in employee performance and, if so, to what extent? (Becker et al. 2001)
According to Popper (1968) and Lee (1989) the scientific theory should satisfy the following requirements:
1) Empirical validity. Do the case studies support it?
2) Logical consistency. Are the predictions consistent with each other?
3) Relative predictive power. Is the theory at least as explanatory or predictive as any competing theory?
4) Falsifiability. Can the theory survive the actual attempts of its falsification?
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