Strategic organization: a field in search of micro-foundations

Abstract

Organizations are made up of individuals, and there is no organization without individuals. There is nothing quite as elementary; yet this elementary truth seems to have been lost in the increasing focus on structure, routines, capabilities, culture, institutions and various other collective conceptualizations in much of recent strategic organization research. It is not overstating the matter too much to say that ‘organization’ has generally entered the field of strategy in the form of various aggregate concepts. This editorial essay is born out of a frustration on our part for the present lack of focus on individuals in much of strategic organization and the taken-forgranted status of ‘organization’. Specifically, the underlying argument of this essay is that individuals matter and that micro-foundations are needed for explanation in strategic organization. In fact, to fully explicate organizational anything – whether identity, learning, knowledge or capabilities – one must fundamentally begin with and understand the individuals that compose the whole, specifically their underlying nature, choices, abilities, propensities, heterogeneity, purposes, expectations and motivations. While using the term ‘organizational’ may serve as helpful shorthand for discussion purposes and for reduced-form empirical analysis, truly explaining (beyond correlations) the organization (e.g. existence, decline, capability or performance), or any collective for that matter, requires starting with the individual as the central actor. Our particular focus in this essay is on the organizational capabilities-based literature in strategic management. This focus serves as a specific example of a more general problem of lack of attention to individuals in strategic organization. (Wider implications could be explicated given more space.) As brief support for the fact that our discussion does have wider ramifications, we note that Selznick has also quite poignantly raised the need for micro-foundations on the part of institutional scholars (1996: 274). Whetten (2004) also highlights the fact that scholars are rarely explicit about what they mean by ‘organizational’. STRATEGIC ORGANIZATION Vol 3(4): 441–455 DOI: 10.1177/1476127005055796 Copyright ©2005 Sage Publications (London,Thousand Oaks, CA and New Delhi) http://soq.sagepub.com