This study identifies the practical and philosophical difficulties associated with testing strategic management and organization theories. Working from a critical realist perspective, we affirm the importance of falsification and verification efforts for progress in theory development. We advocate a four-step approach for advancing theory testing that prioritizes identifying and testing for the presence and effects of hypothesized causal mechanisms, rather than solely focusing on correlational methods to jointly test the set of effects composing a theoretical system. Going beyond prior critical realist writings, we provide practical guidance for deploying established research methods to test management theories. Copyright © 2010 John Wiley & Sons, Ltd.