Building Micro-Foundations for the Routines, Capabilities, and Performance Links
AbstractMicro-foundations have become an important emerging theme in strategic management. This paper addresses micro-foundations in two related ways. First, we argue that the kind of macro (or “collectivist”) explanation that is utilized in the capabilities view in strategic management ? which implies a neglect of micro-foundations ? is incomplete. There are no mechanisms that work solely on the macro-level, directly connecting routines and capabilities to firm-level outcomes. While routines and capabilities are useful shorthand for complicated patterns of individual action and interaction, ultimately they are best understood at the micro-level. Second, we provide a formal model that shows precisely why macro explanation is incomplete and which exemplifies how explicit micro-foundations may be built for notions of routines and capabilities and for how these impact firm performance.
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Bibliographic InfoPaper provided by DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies in its series DRUID Working Papers with number 07-02.
Date of creation: 2007
Date of revision:
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Web page: http://www.druid.dk/
Routines; capabilities; micro-foundations; production function;
Other versions of this item:
- Peter Abell & Teppo Felin & Nicolai Foss, 2008. "Building micro-foundations for the routines, capabilities, and performance links," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(6), pages 489-502.
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
- M1 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-05-19 (All new papers)
- NEP-BEC-2007-05-19 (Business Economics)
- NEP-CBE-2007-05-19 (Cognitive & Behavioural Economics)
- NEP-CSE-2007-05-19 (Economics of Strategic Management)
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