Theory Building and Theory Testing
Research revolves around theory. Hereby, the role of researchers is twofold: Researchers can either start with real-life observations and produce a set of propositions that summarize a new theory (inductive theory building), e.g., using grounded theory research, or start with an existing theory for formulating hypotheses and use data to test them (deductive theory testing), e.g., using structural equation modeling.
For an extensive investigation of this dual role see Colquitt and Zapata-Phelan (2007).
Colquitt, J. & Zapata-Phelan, C. (2007). Trends in theory building and theory testing: A five-decade study of the Adademy of Management Journal. Academy of Management Journal, 50 (6), 1281-1303 DOI: 10.5465/AMJ.2007.28165855