Thursday, June 24, 2010

Micro-foundations Conference at Helsinki

Dr. Hari Bapuji

During the last weekend (June 19-20), I took part in a small and unusual conference. The Micro-level Origins of Organizational Routines and Capabilities (MOORC) conference was held in Suomenlinna, a UNESCO World Heritage site. It was attended by a little over thirty participants, including keynote speakers. The unique nature of the conference was evident right from the place where we stayed in Helsinki to the fact that we all took a ferry to reach to Suomenlinna and return to Helsinki.

In all, a total of 10 papers were presented by speakers. What surprised me most was that nearly every paper presented was an empirical paper. The methods used ranged from case studies to surveys, through archival research, experiments, and simulations. I will not go into the details of these papers for two reasons: (i) I will not be able to do justice to that exercise given the format of this post, and more importantly, (ii) these papers are under review and I do not have permission to write about them. So, let me focus on the broad contours of the discussion at the conference and share my own thoughts.

For a few years now, Teppo Felin, Nicolai Foss and their colleagues have been arguing that management researchers need to study the micro-foundations of the phenomenon that they are interested in. Simply put, micro-foundations is about the elements of a phenomenon and the interaction between them that gives rise to the phenomenon. In other words, if someone is researching the effect of product innovation on organizational performance, the research should focus first on what is innovation, who innovates and how innovation occurs. Then, one needs to study how these different elements interact to give rise to superior performance. This might sound like how research should be done, but that is not how it has mostly been done. In general, researchers tend to examine the relationship between innovation and performance, without adequate consideration to how and why innovation occurs.

As I think back, the agenda of the conference was well-captured by the keynote speeches. Michael Cohen argued that the micro-origins of routines and capabilities lie in habits, that rely on memory and perception. In other words, the focus should be to understand what happens in the minds of individuals as they encounter and perceive things. Geoff Hodgson cautioned against an excessive focus on individuals and suggested that relations between individuals should also be given an equal consideration, if not more. Taking the level of analysis to the supra-individual level, Linda Argote suggested that research be directed at the transactive memory system that combines an individual’s specific knowledge with the meta knowledge of others in the organization. Doing empirical research on what happens in the mind or in the collectives of individuals is not an easy task and requires considerable effort, resources, and more importantly, creativity on the part of researchers to design new methods. Towards this direction, Maurizio Zollo shared the empirical challenges he faced in his research that spans neurological and cognitive factors as well as the social factors that affect action and performance. In short, the conference was about trying to understand what the micro-foundations of routines and capabilities are and how to empirically study them.

No matter which direction the research on micro-foundations might take, I believe that it will be a good thing because it will focus on how things evolve and effect organizations. For example, it is good to know that innovation leads to better performance, but it will be better to know how to create innovations and even better to know what type of innovations lead to better performance and why. Such inquiry will not only be exciting to the researchers, but will also be more useful to managers because the research can then really shed light not only on what to do, but how to do and why.

Here are a couple of photos from the conference:

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