Organizational Routines and Capabilities: Historical Drift and a Course-Correction Toward Microfoundations

Organizational routines and capabilities have become key constructs in fields such as organization studies, strategic management, international business, and technology management, as well as certain parts of economics. We discuss the historical origins of the notion of routines and highlight some of the theoretical drift associated with the notion of routines over time. In particular, we note how recent routines-based work has unnecessarily moved the focus (1) from the individual to the collective level, (2) from intentional behavior to unintentional behavior, and (3) from the observable to the non-observable dimension. In parallel we also explicate the underlying theoretical problems of the concept of organizational routines (and associated constructs, such as capabilities); problems such as the lack of conceptual clarity on the origins of routines, and the more general need for microfoundations. We argue that the underlying, individual-level micro-components and interactional dynamics deserve more attention in extant work—calling in effect for a course-correction in work on organizational routines and capabilities. We highlight how an emphasis on (1) the origins of routines, (2) intentionality and exceptions, and (3) aggregation and emergence, provide opportunities to course-correct future research on organizational routines and capabilities.