Epistemology, methodology or philosophy of science, i.e., the foundations and validity of knowledge, have never been very popular subjects as applied to management research. Lately, though, the need for better theories and the methodological discussion underlying the creation of such theories appears to be receiving more attention. In this paper, I review some basic underlying issues in the area by taking a look at some of the classical authors. I first analyze Hayek's view of methodological problems in economics and then apply his analysis to the development of management theory. Then, I elaborate on Elster's distinction between causal, functional and intentional explanations. Naive methodological attitudes are discussed in this context. I use agency theory as an example of what should and should not be done. Finally, I examine the falsification criterion in management theory and discuss the role of mathematics in the development of theory.