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

Author

Listed:
  • 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)

Abstract

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.

Suggested Citation

  • 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.
    • Handle: RePEc:wly:mgtdec:v:29:y:2008:i:6:p:489-502
    DOI: 10.1002/mde.1413
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    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration

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