Importance of microfoundations for strategic management

Nicolai J. Foss, Copenhagen Business School, Denmark, Copenhagen

The microfoundations project would seem to have a fairly successful one over its decade plus long existence. And yet, the movement confronts a number of fundamental challenges, not the least the challenge of making it come (more) alive in the empirical dimension. The purpose of this essay is to briefly outline these challenges.

The notion of microfoundations is a fundamentally simple one. Thus, it is the heuristic that collective/aggregate/macro outcomes (e.g., organizational performance) and formations (e.g., institutions) be explained in terms of the actions and interactions of lower level entities, typically (but not necessarily) individuals. In turn, micro entities may be influenced by macro entities.

Thus, the microfoundations lens has been applied to macro-concepts (and the underlying perspectives) such as capabilities, dynamic capabilities, routines, competitive advantage, rent appropriation, organizational innovation, strategic problem solving, absorptive capacity, the flexibility/efficiency tradeoff, and institutional isomorphis. The microfoundations project would seem to have a fairly successful one over its decade plus long existence. And yet, the movement confronts a number of fundamental challenges, not the least the challenge of making it come (more) alive in the empirical dimension.

That the microfoundations project is not hugely controversial doesn’t mean it isn’t needed. In fact, the spate of work that has appeared over the last decade, mainly of a theoretical nature, suggests that the microfoundations project was a needed one. It is clearly the case that microfoundations “work” in the theoretical dimension. In terms of theory-building, microfoundations are thus demonstrably doable. However, a key issue concerns the empirical dimension of microfoundational research.

To read the article, access

FOSS, N. J. Reflections on a decade of microfoundations research. Rev. Adm. (São Paulo) [online]. 2016, vol.51, n.1, pp.117-120. [viewed 20^th May 2016]. ISSN 1984-6142. DOI: 10.5700/RAUSP1227. Available from: http://ref.scielo.org/st46gh

External link

Revista de Administração USP – RAUSP: www.scielo.br/rausp