MICRO-Foundations in Strategic Management: Squaring Coleman’s Diagram

Abell, Felin and Foss argue that “macro-explanations” in strategic management, explanations in which organizational routines figure prominently and in which both the explanandum and explanans are at the macro-level, are necessarily incomplete. They take a diagram (which has the form of a trapezoid) from Coleman, Foundations of Social Theory, The Belknap Press of Harvard University Press, Cambridge (Mass.)/London, (1990) to task to show that causal chains connecting two macro-phenomena always involve “macro-to-micro” and “micro-to-macro” links, links that macro-explanations allegedly fail to recognize. Their plea for micro-foundations in strategic management is meant to shed light on these “missing links”. The paper argues that while there are good reasons for providing micro-foundations, Abell, Felin and Foss’s causal incompleteness argument is not one of them. Their argument does not sufficiently distinguish between causal and constitutive relations. Once these relations are carefully distinguished, it follows that Coleman’s diagram has to be squared. This in turn allows us to see that macro-explanations need not be incomplete.