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In this essay we respond to Jepperson and Meyer’s  critique of “action theories” and methodological individualism in sociology. We highlight fundamental problems with their argument, notably their misconception of methodological individualism(s) and the belief that this explanatory principle ignores – and is somehow invalidated by – the complex, “emergent” and multi-level nature of social phenomena. We focus on the need to specify and understand: 1) component actors and social complexity; 2) theory of action, aggregation, and emergence; 3) self-selection and matching; and 4) process and the context of action. We concurrently critique Jepperson and Meyer’s own (implicit but highly problematic and under-specified) theory of action.
We respond to Jack Vromen’s (this issue) critique of our discussion of the missing micro-foundations of work on routines and capabilities in economics and management research. Contrary to Vromen, we argue that (1) inter-level relations can be causal, and that inter-level causal relations may also obtain between routines and actions and interactions; (2) there are no macro-level causal mechanisms; and (3) on certain readings of the notion of routines and capabilities, these may be macro causes.
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.