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Building micro-foundations for the routines, capabilities, and performance links

  • Peter Abell

    (London School of Economics, London, UK)

  • Teppo Felin

    (Marriott School of Management, Brigham Young University, Provo, UT, USA)

  • Nicolai Foss

    (Copenhagen Business School, Center for Strategic Management and Globalization, Porcelainshaven 24, Frederiksberg, Denmark)

Micro-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 presently 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 how these impact firm performance. Copyright © 2008 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/mde.1413
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Article provided by John Wiley & Sons, Ltd. in its journal Managerial and Decision Economics.

Volume (Year): 29 (2008)
Issue (Month): 6 ()
Pages: 489-502

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Handle: RePEc:wly:mgtdec:v:29:y:2008:i:6:p:489-502
Contact details of provider: Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976

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  8. Teppo Felin & Nicolai Foss, 2006. "Individuals and Organizations Thoughts on a Micro-Foundations Project for Strategic Management and Organizational Analysis," DRUID Working Papers 06-01, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  9. Markus C. Becker, 2004. "Organizational routines: a review of the literature," Industrial and Corporate Change, Oxford University Press, vol. 13(4), pages 643-678, August.
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