Grounded Theory was developed by Barney Glaser and Anslem Strauss in their book The Awareness of Dying (1965) and then expanded upon in The Discovery of Grounded Theory (1967).  The method was initially developed in order to measure how a cognizance of impending death influences the social interactions of terminally ill patients.

Grounded Theory was pretty revolutionary, as it switched up the order of the scientific method in that data collection precedes the formation of theories/hypotheses.

In a 1965 article explaining the use of his Constant Comparative Method (which was later re-named Grounded Theory), Glaser recognized a split between two forms qualitative research.  In the first, researchers desired to “convert qualitative data into crudely quantifiable form” (437), and so they coded their data.  In the second, researches only wanted to use their data to generate theories, and so they didn’t bother with unnecessary coding.  Glaser sought, essentially, to marry these two forms:  “The purpose of the constant comparative method of joint coding and analysis is to generate theory more systematically than allowed by the second approach [the one that generates theory]  by using the explicit coding and analytic procedures” (ibid).

Many different formal frames have been posited that stick generally within the confines of Grounded Theory (Glaser and Strauss even split with one another), but the four basic steps laid down by Glaser generally apply:

“The constant comparative method can be described in four stages:  (1) comparing incidents applicable to each category, (2) integrating categories and their properties, (3) delimiting the theory, and (4) writing the theory” (439)

CITED

Glaser, Barney G.  “The Constant Comparative Method of Qualitative Analysis.”  Social Problems 12.4. (Spring 1965). 436-445.