Current micro foundations project (CMFP) Thomas Kalling & J.-C. Spender 23-SeptSMS Madrid 20141.

SMS Madrid 2014 1

current micro foundations

project (CMFP)

Thomas Kalling & J.-C. Spender

23-Sept

SMS Madrid 2014 2

what is the CMFP about ?• revealing the 'causal mechanisms' that link the multiple levels of

organizational/strategic analysis - e.g. individuals (micro) and firms (collective)

• 3 categories - individuals, processes, structures

• opening up collective-level 'black boxes' - e.g. firms, organizational routines, capabilities, org. culture, institutions, absorptive capacity.

• encouraging empirical research into the multi-level linking mechanisms so inducing a change in org/strategy researchers' methodological conventions

• being a 'big tent' and exploring a place for 'emergence'

23-Sept

what's the fuss ?

http://www.aims2014.org/index.php/nos-media/82-video-durand-foss

SMS Madrid 2014 3

Felin, Teppo, & Foss, Nicolai J. (2005). Strategic Organization: A Field in Search of Micro-Foundations. Strategic Organization, 3, 441-455.

(p.441) “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-for-granted status of ‘organization’.”

(p.443) “J. C. Spender notes ‘we must argue that organizations learn and have knowledge only to the extent that their members are malleable beings whose sense of self is influenced by the organization’s evolving social identity’ and thus learning is ‘primarily internalized from the social context’ (1996: 53, emphasis added). This places all the explanatory burden on the context and environment (over individual causation).”

CMFP first shot - from the So!apbox

Spender, J.-C. (2005). Management: Rational or Creative: A Knowledge-Based Discussion. CBS SMG Working Paper 14/2005.

Lukes, Steven. (1968). Methodological Individualism Reconsidered. British Journal of Sociology, 19(2, June), 119-129.

Felin, Teppo, & Spender, J. -C. (2009). An Exchange of Ideas about Knowledge Governance: Seeking First Principles and Microfoundations. In Nicolai J. Foss & Snejina Michailova (Eds.), Knowledge Governance: Processes and Perspectives (pp. 247-271). Oxford: Oxford University Press.

23-Sept

SMS Madrid 2014 4

Abell, Peter, Felin, Teppo, & Foss, Nicolai J. (2008). Building Micro-foundations for the Routines, Capabilities, and Performance Links. Management and Decision Economics, 29(6), p.491.

Coleman, James S. (1990). Foundations of Social Theory. Cambridge MA: Harvard University Press.

23-Sept

methodology

SMS Madrid 2014 5

Devinney, Timothy M. (2013). Is Microfoundational Thinking Critical to Management Thought and Practice? Academy of Management Perspectives, 27(2), 81-84.

Felin, Teppo, Foss, Nicolai J., Heimeriks, Koen H., & Madsen, Tammy L. (2012). Microfoundations of Routines and Capabilities: Individuals, Processes, and Structure. Journal of Management Studies, 49(8), 1351-1374.

Lazaric, Nathalie. (2011). Organizational Routines and Cognition: An Introduction to Empirical and Analytical Contributions. Journal of Institutional Economics, 7(Special Issue 02), 147-156.

CMFP special issues

23-Sept

success !

SMS Madrid 2014 6

• stylistic

• historical

• methodological

• substantive

4 comments

all cautionary - it is a risky work area

23-Sept

SMS Madrid 2014 7

stylistic

"To an astonishing degree, the disputants have argued at cross-purposes, and without manifest intention to understand the opposite point of view. There has been a marked tendency ... to misinterpret and misrepresent the ideas and arguments put forward by the other side ... for extra-scientific reasons. First (the debate) seems to be inextricably mixed up with some of peoples' most entrenched and strongly held beliefs about human nature and society. Second, these beliefs seems to be closely linked to their moral and political convictions." Udehn, Lars. (2001). Methodological Individualism: Background,

History and Meaning. London: Routledge. p.3

Udehn, Lars. (2002). The Changing Face of Methodological Individualism. Annual Review of Sociology, 28(2), 479-507.

CMFP explicitly targets ‘organizational routines’Felin, Teppo, & Foss, Nicolai J. (2009). Organizational Routines and Capabilities: Historical Drift and a Course-Correction Towards Microfoundations. Scandinavian Journal of Management, 25, 157-167.

23-Sept

CMFP discourse invites speculation into writers' intentions

SMS Madrid 2014 8

Homans, George C. (1964). Bringing Men Back In. American Sociological Review, 29(6), 809-818.

historical

23-Sept

" ... first clearly articulated by Hobbes, who held that 'it is necessary that we know the things that are to be compounded, before we can know the whole compound'."

Lukes, Steven. (1968). Methodological Individualism Reconsidered. British Journal of Sociology, 19(2, June), 119-129. p.119

Parsonian structural functionalism

"... the micro-macro distinction ranks with the core opposition in Occidental thinking, at least since the late medieval differentiation between the individual and the State."

Alexander, Jeffrey C., & Giesen, Bernhard. (1987). From Reduction to Linkage: The Long View of the Micro-Macro Debate. In Jeffrey C. Alexander, Bernhard Giesen, Richard Münch & Neil J. Smelser (Eds.), The Micro-Macro Link (pp. 1-42). Berkeley CA: University of California Press. p.3

SMS Madrid 2014 9

(our) differences ... derive predominantly from different predictions about the economic consequences of taking action - differences that in principle can be eliminated by the progress of positive economics - rather than from fundamental differences in basic values, differences about which men can ultimately only fight.

Friedman, Milton. (1953). The Methodology of Positive Economics Essays in Positive Economics (pp. 3-43). Chicago IL: University of Chicago Press. p.5

Robbins, Lionel. (1932). An Essay on the Nature & Significance of Economic Science. London: Macmillan & Co. p.134

methodological

• Methodenstreit• methodological pluralism • methodological individualism

23-Sept

1891

SMS Madrid 2014 10

sociological methodology

23-Sept

"This overlapping of the micro-macro theme with epistemological, ontological, and political distinctions gave rise to fierce disputes that demanded decisions be made between incompatible alternatives."

Alexander, Jeffrey C., & Giesen, Bernhard. (1987). From Reduction to Linkage: The Long View of the Micro-Macro Debate. In Jeffrey C. Alexander, Bernhard Giesen, Richard Münch & Neil J. Smelser (Eds.), The Micro-Macro Link (pp. 1-42). Berkeley CA: University of California Press. p.2

"It is necessary to know if we have to do with an ontological thesis about social reality, an epistemological thesis about possible knowledge, or a strictly metaphorical principle about the road to knowledge."

Udehn, Lars. (2002). The Changing Face of Methodological Individualism. Annual Review of Sociology, 28(2), 479-507. p.480

SMS Madrid 2014 11

The call for micro-foundations is a methodological point about the power of looking at lower-level constituent units when explaining higher levels of analysis. In other words, the precise point of the micro-foundations program is to systematically look at the origins and nature of the macro: how choices and interactions create structure, the behavior of individuals within structures, and the role of individuals in shaping the evolution of structures over time.

Barney, Jay B., & Felin, Teppo. (2013). What Are Microfoundations? Academy of Management Perspectives, 27(2), p.144

23-Sept

SMS Madrid 2014 12

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.

Felin, Teppo, & Foss, Nicolai J. (2005). Strategic Organization: A Field in Search of Micro-Foundations. Strategic Organization, 3, p. 441

"Nothing is more fundamental in setting our research agenda and informing our research methods than our view of the nature of the human beings whose behavior we are studying. It makes a difference, a very large difference, to our research strategy whether we are studying the nearly omniscient Homo economicus of rational choice theory or the boundedly rational Homo psychologicus of cognitive psychology. It makes a difference to research, but it also makes a difference for the proper design of political institutions."

Simon, Herbert A. (1985). Human Nature in Politics: The Dialogue of Psychology with Political Science. American Political Science Review, 79(2), 293-304 p.303

defining the CMFP individual?

23-Sept

SMS Madrid 2014 13

substantive: the CMFP 1.0 model

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.

Felin, Teppo, & Foss, Nicolai J. (2005). Strategic Organization: A Field in Search of Micro-Foundations. Strategic Organization, 3, 441

✖ step 1.0

which CMFP definitions of 'the individual' and 'the organization' are to be 'linked' ?

23-Sept

'Men are products of circumstances ... but men change circumstances'

Marx, Karl. (2009). On Feuerbach (Austin Lewis, Trans.). In Austin Lewis (Ed.), Frederick Engels: Feuerbach - the Roots of the Socialist Philosophy; Karl Marx On Feuerbach (pp. 30-93). New York: mondial.

SMS Madrid 2014 14

oops - 2.1

"A microfoundational approach, however, does not imply that collective level constructs cannot be part of the explanation."

Felin, Teppo, Foss, Nicolai J., Heimeriks, Koen H., & Madsen, Tammy L. (2012). Microfoundations of Routines and Capabilities: Individuals, Processes, and Structure. Journal of Management Studies, 49(8), 1351-1374. p.1352

✖ step 2.1

axiomatic collective level constructs ?escaping tautologies ?

23-Sept

SMS Madrid 2014 15

microfoundations are not solely about individuals. The problem with reducing everything to individuals is that it ignores the interactions among them as well as the context of the organization itself ... Individual interactions are not simply additive, but can take on complex forms and lead to surprising aggregate and emergent outcomes that are hard to predict based on knowledge of the constituent parts. Thus reducing, or attempting to reduce, everything to individuals is only “micro”—not microfoundational. In other words, the foundations portion of microfoundations is important in that it places emphasis on the need to specifically understand the unique, interactional, and collective effects that are not only additive but also emergent. “Adding individuals,” while important, leaves the hard work of actually aggregating up to the collective or organizational level undone. Therefore, microfoundations do not (solely) equal a focus on individuals.

Barney, Jay B., & Felin, Teppo. (2013). What Are Microfoundations? Academy of Management Perspectives, 27(2), 138-155. p.141

✖ step 2.2

er, well - 2.2

firms = addition / aggregation of 'individuals' - or just another 'collective construct' like 'capabilities' ?

23-Sept

SMS Madrid 2014 16

CFMP definition of 'micro foundation'

"We define microfoundations as a theoretical explanation, supported by empirical examination, of a phenomenon located at analytical level N at time t(Nt). In the simplest sense, a baseline micro-foundation for level Nt lies at level N - 1 at time t - 1, where the time dimension reflects a temporal ordering of relationships with phenomena at level N - 1 predating phenomena at level N. Constituent actors, processes, and/or structures, at level N - 1t-1 may interact, or operate alone, to influence phenomena at level Nt. Moreover, actors, processes, and/or structures at level N - 1t-1 also may moderate or mediate influences of phenomena located at level Nt or at higher levels (e.g. N + 1t+1 to N + nt+n). In addition, while our theory focuses on the organizational routine or capability as the focal level N, the focal level N in a microfoundations inquiry may represent any collective level."

Felin, Teppo, Foss, Nicolai J., Heimeriks, Koen H., & Madsen, Tammy L. (2012). Microfoundations of Routines and Capabilities: Individuals, Processes, and Structure. Journal of Management Studies, 49(8), 1351-1374. p.1353

23-Sept

not specifically tied to individuals

SMS Madrid 2014 17

CMFP ?

OK, CMFP is not sociology - but which aspects of 'the individual' separate 'the hard work of aggregation' (link 3) from 'addition' ?

heterogeneity

so the CMFP is ...

23-Sept

SMS Madrid 2014 18

✖ step 3.0 - ?

'the firm' - crucial CFMP aggregation question

• economics - rational actors aggregate into 'markets'

• non-rational actors, heterogeneous in their values, capabilities, etc. aggregate how ?

• “emergentism” - Marx, Durkheim, Parsons or ‘evolutionary’ ?

• CMFP is not economics - neoclassical, Austrian, institutional, behavioral, evolutionary, or ...

• just RCT sociology, politics or group psychology after all ?

23-Sept

SMS Madrid 2014 1923-Sept

the strange non-death of structural functionalism

"the social system is made up of the actions of individuals."Parsons, Talcott, & Shils, Edward A. (Eds.). (1962). Toward a General Theory of Action. Cambridge MA: Harvard University Press. p.190

SMS Madrid 2014 2023-Sept

social facts

psychologicalfacts

'initial conditions' of individual action

contingent psycho-socio-economic

outcomes

Coleman+ model

"theory of the individual"