| Course | BUS 700 Introduction to Business Administration in Doctoral Study (BUS/700) |
|---|---|
| Week | 5 |
| Paper type | Doctoral theory application paper |
| Length | about 1,153 words, 4 double-spaced pages plus title page and references |
| Format | APA 7 student paper |
| School | University of Phoenix |
| Program | DBA |
| Updated | October 2026 |
Free sample paper for BUS 700 Week 5
Four Theories, One Branch Closure Decision: Using Business Administration Theory to Explain What Managers Do
[Student Name]
University of Phoenix
BUS/700: Introduction to Business Administration in Doctoral Study
Week 5 Assignment
[Instructor Name]
[Date]
The doctoral student, Buckeye Valley Bank and all details are composites written for a model paper.
Two years ago, Buckeye Valley Bank, a composite regional bank in Ohio, closed eight of its 54 branches, mostly in small towns. Marcus Bell, a DBA student and the bank's director of retail operations, helped carry out the closures. Executives explained them as a response to declining branch visits and rising costs, and the local newspaper in one town called the closing the end of an era. In his doctoral program, Marcus is asked to look at the decision through theory. A theory is a way of seeing, and different theories applied to the same decision reveal different reasons, risks and questions that any single explanation would miss. This paper applies four business administration theories to the branch closures.
What Theory Is
Sutton and Staw (1995) argued that references, data, lists of variables, diagrams and hypotheses are not theory in themselves; theory explains why relationships exist, offering causal logic and underlying processes. A good theory tells a story about mechanisms that can be tested. Each theory below offers a different story about why banks close branches.
Transaction Cost Economics
Coase (1937) asked why firms exist if markets coordinate economic activity, and answered that using markets has costs, such as finding partners and negotiating contracts, so firms organize activities internally when doing so is cheaper. Later work developed this into transaction cost economics, which examines when activities should be performed inside the firm or through markets.
Applying Transaction Cost Economics
Through this lens, branches are a way to perform customer transactions internally. Mobile and online banking lower the cost of many transactions, and partnerships with retailers or shared branch networks offer market alternatives. When the cost of serving customers through owned branches exceeds alternatives, closing them follows. The theory explains the economic logic but says little about relationships lost.
Agency Theory
Jensen and Meckling (1976) defined an agency relationship as one in which principals engage agents to act on their behalf and argued that agents may pursue their own interests, creating agency costs. Monitoring and incentives align interests.
Applying Agency Theory
Buckeye Valley's executives receive bonuses tied to efficiency ratios. Agency theory asks whether the closures served shareholders' long-term interests or executives' short-term bonus targets. If closures improved efficiency ratios quickly but lost profitable small business relationships over time, they could reflect an agency problem.
The Resource-Based View
Barney (1991) argued that lasting advantage rests on assets a firm controls that create value, are scarce among rivals, are hard to copy and have no easy substitute. Relationships, knowledge and reputation can be such resources.
Applying the Resource-Based View
Small-town branches held relationships between branch managers and local business owners built over decades, knowledge about local businesses' creditworthiness and community trust. These were valuable, rare and hard to copy. Closing branches may have destroyed resources that mobile apps cannot replace, a cost the efficiency analysis did not count.
Institutional Theory
DiMaggio and Powell (1983) argued that organizations in the same field become similar through coercive, mimetic and normative pressures, adopting structures to gain legitimacy rather than only for efficiency. Under uncertainty, organizations imitate peers they see as successful.
Applying Institutional Theory
In the years before Buckeye Valley's closures, larger banks announced branch reductions, and industry conferences promoted digital-first strategies. Institutional theory suggests that Buckeye Valley may have closed branches partly because peers did and because analysts expected it, not solely because of its own data.
Testing Between Theories
Theories become useful in research when they predict different things. If cost logic drove the closures, the bank should have closed its highest-cost branches regardless of what peers did. If imitation mattered, closures should cluster in time after peer announcements and include branches with acceptable costs. If agency concerns mattered, closures should cluster near bonus measurement dates. Marcus checked the bank's records and found that closures followed peer announcements closely and included two profitable branches, evidence that institutional pressure played a role alongside costs.
Levels of Analysis
The four theories operate mainly at the level of the firm or the field of firms. Marcus's research interest, small business owners' behavior after closures, sits at the level of individuals. Moving between levels requires care: a firm-level theory can explain why branches closed, but individual-level theories explain how customers respond. Mixing levels without saying so is a common error in early doctoral work.
Theory and Practice
For practitioners, theory can seem remote. Yet executives at Buckeye Valley used implicit theories when they decided: they assumed customers would follow cost-efficient channels, a transaction cost view, and did not consider relationship resources. Making these implicit theories explicit could have prompted different questions, such as which branches held the most valuable relationships, before choosing which to close.
The Role of Assumptions
Each theory rests on assumptions about people and organizations. Transaction cost and agency theories assume people pursue their interests and can act opportunistically. Institutional theory assumes organizations seek legitimacy and are shaped by their fields. The resource-based view assumes firms differ in lasting ways. Choosing a theory means accepting its assumptions, so a researcher should ask whether they fit the setting studied.
Comparing the Theories
Transaction cost economics explains the cost logic, agency theory raises questions about incentives, the resource-based view highlights lost relationships and institutional theory points to imitation. Each assumes something different: rational efficiency, self-interested managers, resource heterogeneity or social pressure. Together they give a richer explanation than any alone.
What Each Conceals
Transaction cost economics overlooks relationships; agency theory may assume bad intent; the resource-based view can be hard to measure; institutional theory may understate real economic pressures. Recognizing these blind spots prevents overreliance on one lens.
How Theories Develop
Theories are not fixed. Coase's 1937 insight lay largely dormant for decades before others built transaction cost economics on it. The resource-based view emerged in the 1980s and 1990s and has been extended to dynamic capabilities. Institutional theory has moved from explaining similarity to explaining how organizations resist or reshape pressures. Doctoral students join these conversations, and a practitioner's study can refine a theory by showing where it does or does not fit a real setting.
Choosing a Lens for Research
Marcus's research question concerns older small business owners' banking after closures. The resource-based view frames the closures as a loss of relationship resources and suggests asking whether digital tools can rebuild them. Technology acceptance theory, from earlier weeks, explains individual adoption. Combining a firm-level lens with an individual-level theory may suit his study, provided he states clearly which level each part of the research addresses.
Conclusion
Applying four theories to one branch closure decision shows how theory shapes what managers and researchers see. Cost logic, incentives, resources and legitimacy each explain part of the decision. For Marcus's research, the resource-based view, paired with technology acceptance, best frames the question of what small business customers lose and whether digital tools can replace it.
References
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120. https://doi.org/10.1177/014920639101700108
Coase, R. H. (1937). The nature of the firm. Economica, 4(16), 386-405. https://doi.org/10.1111/j.1468-0335.1937.tb00002.x
DiMaggio, P. J., & Powell, W. W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48(2), 147-160. https://doi.org/10.2307/2095101
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360. https://doi.org/10.1016/0304-405X(76)90026-X
Sutton, R. I., & Staw, B. M. (1995). What theory is not. Administrative Science Quarterly, 40(3), 371-384. https://doi.org/10.2307/2393788
What the BUS 700 Week 5 instructions ask
Week 5 of BUS 700 has DBA students study theories of business administration and use them on a problem from their own work. Typical requirements include defining theory and its components, summarizing several major theories, applying them to an organizational issue, comparing their explanatory power and limits and explaining how theory could inform the student's research. Some prompts ask students to select a theory for their research focus. Use original or authoritative sources, explain each theory's core logic and assumptions, apply them concretely and cite sources in APA format. Compare what each theory notices and what it leaves out, since the choice of lens shapes the research questions that follow.
How this BUS 700 Week 5 example is built
A bank that closed eight branches could explain its decision in several ways, and the paper shows how four theories see it differently. Theory is defined as an explanation of why and how things happen, not a list of variables. Transaction cost economics asks which activities are cheaper inside the firm than through markets. Agency theory examines whether managers acted in shareholders' interests. The resource-based view asks whether branches were valuable, hard-to-copy resources. Institutional theory suggests banks closed branches partly because peers did. Each theory reveals part of the decision. The resource-based view best frames the student's research on lost relationships.
BUS 700 Week 5 grading rubric: where the points go
Strong theory papers explain each theory's core logic accurately and apply it to a specific situation in a way that reveals something new. Faculty credit a clear definition of theory, accurate summaries drawn from original sources, applications that go beyond labels, a comparison of what each theory explains and misses and a reasoned choice of lens for the student's research. Recognizing that theories rest on assumptions, such as rational actors or social pressures, shows sophistication. A scholarly voice and accurate APA references are expected. Credit also goes to papers that show how evidence could distinguish between theories, for example by identifying data that would support an institutional explanation over a cost-based one, since that is the bridge between theory and research design. Reading original articles, not textbook summaries, is expected.
BUS 700 Week 5 help: mistakes to avoid
A common weakness is describing theories in turn and never putting them to work. Run every theory against the same decision. Another frequent gap is treating theory as a list of factors. Explain the causal logic. Students also cite textbooks instead of original sources. Read the foundational articles. Avoid choosing a theory because it is popular; explain why it fits your problem. Note each theory's assumptions and limits, and check whether they fit your setting. Compare theories directly. Finally, connect the chosen theory to your research question, since theory should shape what you study and how. Say what evidence would favor one theory over another.
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BUS 700 Week 5 questions, answered
What does BUS 700 Week 5 usually cover?
It usually covers business administration theory: what theory is, major theories of the firm such as transaction cost economics, agency theory, the resource-based view and institutional theory, their application to a problem and their use in research.
Where can I find a free BUS 700 Week 5 sample paper?
The complete theory paper applying four theories to a bank's branch closure decision, with notes, is presented on this page. Send your theory prompt and a complimentary first version can be written.
What is a theory in business research?
An explanation of how and why phenomena occur, specifying relationships among concepts and the reasons behind them, which can be tested with evidence.
What is institutional theory?
A theory explaining that organizations adopt structures and practices partly to gain legitimacy, often by imitating peers or responding to regulatory and professional pressures, not only for efficiency.
What is agency theory?
A theory examining conflicts of interest between principals, such as shareholders, and agents, such as managers, and the costs of aligning their interests through monitoring and incentives.
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