The role of theory is to help explain the rationale behind cause and effect within the parameters of abstract and concrete accepted constructs. The building blocks of theory are called "concepts", or accepted notions. It is what you do with those concepts that entail the strategy to be followed to build theory.
Theories are not born out of thin air. They actually are the product of existing theories that have been re-analyzed and put to the test. The way that they have been analyzed are through the following:
1. Rational thinking- applying logic and concrete operations to the observations being made; leaving all egocentric tendency out and focusing on what is palpable and predictable.
2. Using generalizations- all accepted notions, social constructs, and general ideas are the framework of theory. These are the paradigms that will be accepted or rejected depending on what is at stake.
3. Structuring data- all empirical data, combined with quantitative and qualitative data is essential to determine the extent to which a new theory could be considered. The same happens when deciding on whether a theory will branch out into sub-theories. To which extent such ramification will affect the field in terms of continuous research and results?
4. Using the ladder of abstraction- this is when all researchers organize accepted concepts and notions ranging from those who are most close to the ego (personal) all the way to those who are universal and general. This helps in the process of deductive and rational thinking.
5. Deductive thinking- another form of logical thinking, it consists on taking away the constructs that do not belong within the parameters of the theory, nor have anything to do with what the theory aims to explain.
6. Inductive thinking- using generalizations to move forward in an investigation and see if such generalizations are true.
7. Making propositions at the empirical and abstract level- when forming a theory, researchers must first hypothesize, or bring in a central idea which is to be put to the test. The abstract level of thinking is what proposes the subject i.e, "ethical treatment of workers". The empirical level is what proceeds to experience what that really looks like, feels like, and is described as.
8. Extrapolating variables- anything that can in any way change the outcome of what a theory tries to explain must be placed aside and listed as part of the effects caused by the theory. It is perhaps one of the most imperative things to maintain the validity and solidity of the theory, since by understanding the variables you can predict outcomes.
Due to the wide variety of research models, theory building can have many other new strategies that are applied to the process. However, those discussed above are the most widely known and used to this day.