Chapter 4 - Microfoundations

Summary

The aim of the microfoundations movement in management is to link macro management phenomena, such as corporate governance and strategic alliances, with more micro disciplines, such as organizational behavior and psychology. The core ideas of microfoundations are closely related to methodological individualism, which is the epistemological stance stressing the explanatory primacy of individuals and their purposeful behavior. Methodological individualism should be distinguished from ontological individualism, which is the thesis that all social phenomena are created, or caused, by individuals. Coleman’s boat is a visual representation showing how large-scale entities (the macro) influence smaller-scale entities (the micro) and how a macro phenomenon is composed of microscale events and activities. A key limitation of the microfoundations movement is that emergent entities, such as organizations, and their properties are common in management research. The properties of an emergent entity itself cannot be explained away and thus eliminated entirely from explanations involving the exercise of the entity’s causal powers.