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The authors discuss the microfoundations of institutional theory, specifically as microfoundations are manifested in this volume of Research in the Sociology of Organizations. The authors argue that the main interest seems to be in better understanding macrofoundations: top-down forces from institutions to actors. Furthermore, throughout the volume institutions themselves are definitionally layered – in problematic ways – with a large array of other macroconstructs, including fields, logics, practices, habitus, situations, routines, and so forth. The authors argue that there is an opportunity to more carefully delineate microfoundations for institutional theory, by focusing on lower-level heterogeneity, agency, as well as the aggregate and emergent social processes that animate microfoundational explanation.

Comparative organizational analysis once dominated American organizational sociology, grounded in rich case studies about organizational processes and outcomes. The Columbia school's approach to organizational research was exemplary in this regard. Following the publication of Robert K. Merton's (1940) essay, “Bureaucratic Structure and Personality,” he attracted a group of talented doctoral students to his formal organizations seminar (Crothers, 1990), the core of whom would go on to write dissertations, books, and articles forming the substance of American organizational sociology in the decades to come. Among those students were Philip Selznick, Alvin Gouldner, Peter Blau, Seymour Martin Lipset, Rose Coser, and James Coleman. While their work varied greatly in substantive content, their studies shared a theoretical interest in explaining intra-organizational dynamics and the unexpected outcomes of bureaucratic administration. Organizations, they demonstrated, developed “lives of their own,” quite outside the intents of their founders (Haveman, 2009; refer, especially, Selznick, 1957). Organizations, in other words, were adaptive to the needs of their constituents, but adaptations did not always produce the intended results. One of the unintended consequences of organizational development was increasing variety in the kinds of organizations that emerged to meet particular societal goals or ends. Thus, an inherent focus of this early comparative research was the explanation of variety in organizational types, policies, and outcomes and an emphasis on the ways in which organizations diverged from ideal types.

Making links between micro and macro levels has been problematic in the social sciences, and the literature in strategic management and organization theory is no exception. The purpose of this chapter is to raise theoretical issues in developing micro-foundations for strategic management and organizational analysis. We discuss more general problems with collectivism in the social sciences by focusing on specific problems in extant organizational analysis. We introduce micro-foundations to literature by explicating the underlying theoretical foundations of the origins of individual action and interaction. We highlight opportunities for future research, specifically emphasizing the need for a rational choice programme in management research.

This chapter sets forth a form of comparative analysis that is explicitly organizational, in the sense that it uses cross-level, contextual or compositional, analysis to explain organizational-level observations, especially comparisons between organizations. Inter-organizational comparisons often surface paradoxical results, in the form of unexpected differences among similar kinds of organizations, or unexpected similarities among different kinds of organizations. The value of using comparative analysis in these cases is that the information required to unravel organizational-level puzzling results is often located at a higher or lower levels. The proposed form of comparative analysis thus extends the conventional top-down, unidirectional form by adding a bottom-up component – making it bi-directional. In addition to introducing an organization-centered form of comparative analysis, the chapter offers suggestions for its practice and speculates about the potential benefits of its broad application within organizational studies.

When we try to explain the dynamic relationship between actors and their environment, “unidirectional” paradigms clustered at either end of an agency–determinism continuum, theoretical absolutes, and a focus on final outcomes are of limited value. Comparative research is uniquely positioned to move beyond such limitations and toward accounts of organizing that incorporate variation, interests, and interaction. To guide comparative research toward this more relational approach, we (1) highlight a move toward the middle ground of the agency–determinism continuum, that is, varieties of interaction and mutual influence between actors and their environments across levels of analysis; and (2) propose to conceptualize actor–environment relations as a “negotiation.” We use this metaphorical lens to stimulate a focus on the variety of different “negotiation spaces” and “negotiation moves,” which actors may utilize in an organizational field to affect stability or change. We provide an exemplary application of the framework and conclude with some observation on the implications for future research.

This double volume presents the state of the art in research on the microfoundations of institutions. In this introductory chapter, we develop an overview of where the emerging microfoundational agenda in institutional theory stands and in which direction it is moving. We discuss the questions of what microfoundations of institutions are, what the “micro” in microfoundations represents, why we use the plural form (microfoundations vs microfoundation), why microfoundations of institutions are needed, and how microfoundations can be studied. Specifically, we highlight that there are several traditions of microfoundational research, and we outline a cognitive, a communicative and a behavioral perspective. In addition, we explain that scholars tend to think of microfoundations in terms of an agency, levels, or mechanisms argument. We delineate key challenges and opportunities for future research and explain why we believe that the debate on microfoundations will become a defining element in the further development of institutional theory.