Concept formation is a demanding task in social research. A methodological approach (called LION) is presented that emphasizes the clarification of concepts based on linguistic and ontological views. This method originates from a qualitative-pragmatist tradition of studies of work-practices in organizational settings and it is explicitly based on the linguistic turn and the practice turn in social research. It is also based on the articulation of seven conceptualization maxims. Its aim is to bring rigor to the conceptualizing process and clarity to resulting conceptualizations. The method is illustrated through an analysis example from service management. The concepts of "value-in-use" and "value generation" are critically analyzed using linguistically and ontologically oriented questions. The application of the LION method in qualitative research is discussed concerning research question formulation, collection, and analysis of data, review of extant theory, and final articulation of theoretical contribution.