Micro Foundations For Strategy

Scholars increasingly seek to proffer microfoundations for macro management theory, notably strategic management theory. These microfoundations naturally revolve around human resources. We argue that proper microfoundations for strategic management theory must recognize that the management of motivation is first and foremost a matter of the management of cognitions of organizational members, an insight that we found in goal-framing theory, an emerging perspective based on cognitive science, behavioral economics, and social psychology. Building on this insight, we argue that a key reason why strategic goals matter to firm performance - that is, firm-level value creation and value capture and sustained competitive heterogeneity - is that such goals influence value creation rooted in employee motivations. Unfolding this idea allows us to generate new insight in the relations between value creation, strategic leadership and strategic goals.