As the transaction cost theory of the firm was taking shape in the 1970s, another important movement in economics was emerging: a revival of the ‘Austrian’ tradition in economic theory associated with such economists as Ludwig von Mises and F. A. Hayek . As Oliver Williamson has pointed out, Austrian economics is among the diverse sources for transaction cost economics. In particular, Williamson frequently cites Hayek , particularly Hayek’s emphasis on adaptation as a key problem of economic organisation . Following (...) Williamson’s lead, a reference to Hayek’s ‘The Use of Knowledge in Society’ has become almost mandatory in discussions of economic organisation . However, there are many other potential links between Austrian and transaction cost economics that have not been explored closely and exploited.This article argues that characteristically Austrian ideas about property, entrepreneurship, economic calculation, tacit knowledge, and the temporal structure of capital have important implications for theories of economic organisation, transaction cost economics in particular. Austrian economists have not, however, devoted substantial attention to the theory of the firm, preferring to focus on business-cycle theory, welfare economics, political economy, comparative economic systems, and other areas. Until recently the theory of the firm was an almost completely neglected area in Austrian economics, but over the last decade, a small Austrian literature on the firm has emerged. While these works cover a wide variety of theoretical and applied topics, their authors share the view that Austrian insights have something to offer students of firm organisation. (shrink)

The 'Austrian' tradition is well-known for its definitive contributions to economics in the twentieth century. However, Austrian economics also offers an exciting research agenda outside the traditional boundaries of economics, especially in the management disciplines. This Element examines how Austrian ideas play a key role in expanding the understanding of fields like entrepreneurship, strategy, and organization. It focuses especially on the vital role that entrepreneurs play in guiding economic progress by shaping firms and their strategic behavior. In doing so, it (...) explains a wide range of contributions that Austrian economics makes to the understanding of key problems in management, while also highlighting many directions for future work in this inspiring tradition. (shrink)

Economics in general, and the theory of the firm more specifically, places motivation and cognition in very different analytical boxes, in spite of cognitive science evidence that the boundaries between the two are in reality blurred. While this analytical assumption has often served the theory of the firm well, a number of organizational phenomena are better understood if cognition and motivation are allowed to interact, for example, through framing effects, as organizational scholars have long argued. The paper exemplifies by developing (...) the implications of this for Williamson’s notion of the “impossibility of selective intervention.”théorie de la firme en particulier placent la motivation et la connaissance dans des boites analytiques très différentes, en dépit de preuves scientifiques affirmant que les deux se confondent dans la réalité. Même si cette hypothèse analytique a souvent été utile dans la théorie de la firme, certains phénomènes organisationnels sont mieux compris si on permet à la connaissance et à la motivation de réagir réciproquement, par exemple à travers des effets d’“encadrement ” comme les théoriciens des organisations le soutiennent depuis longtemps. Ce papier illustre cette interaction en développant les implications de l’effet d’encadrement pour la notion d’“impossibilité d’intervention sélective” de Williamson. (shrink)

I address the issue of justifiable profits from distinct perspectives in economics, strategy research and ethics. Combining insights from Austrian economics, the resource-based perspective, and finders, keepers ethics, I argue that strategy is about the discovery of hitherto unexploited possibilities for exchange. To the extent that strategy is about the discovery/creation ex nihilo of products, ways of producing products, etc., the resulting profits are argued to be justifiable from a finders, keepers perspective.

The advent of the knowledge economy changes the ways in which firms organize their activities and how they strategize in the market place. This non-technical volume lays the foundations for an analysis of these phenomena. In particular, it shows how 'knowledge-based approaches' in management studies may be complemented by key ideas from the economics of organization. The discussion is both theoretical and empirical.

ABSTRACTWhile the sonic logo for McDonald’s i’m lovin’ it campaign has been widely distributed and highly praised, little is known about the actual characteristics and meaning potentials of this pa...

We respond to Jack Vromen’s 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 inter-level relations can be causal, and that inter-level causal relations may also obtain between routines and actions and interactions; there are no macro-level causal mechanisms; and on certain readings of the notion of routines and capabilities, these may be macro causes.

There is considerable evidence that listeners’ understanding of a spoken sentence need not always follow from a full analysis of the words and syntax of the utterance. Rather, listeners may instead conduct a superficial analysis, sampling some words and using presumed plausibility to arrive at an understanding of the sentence meaning. Because this latter strategy occurs more often for sentences with complex syntax that place a heavier processing burden on the listener than sentences with simpler syntax, shallow processing may represent (...) a resource conserving strategy reflected in reduced processing effort. This factor may be even more important for older adults who as a group are known to have more limited working memory resources. In the present experiment, 40 older adults and 20 younger adults were tested for comprehension of plausible and implausible sentences with a simpler subject-relative embedded clause structure or a more complex object-relative embedded clause structure. Dilation of the pupil of the eye was recorded as an index of processing effort. Results confirmed greater comprehension accuracy for plausible than implausible sentences, and for sentences with simpler than more complex syntax, with both effects amplified for the older adults. Analysis of peak pupil dilations for implausible sentences revealed a complex three-way interaction between age, syntactic complexity, and plausibility. Results are discussed in terms of models of sentence comprehension, and pupillometry as an index of intentional task engagement. (shrink)

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.

One of Israel Kirzner’s less wellknown contributions is to the theory of capital. In this paper, we link the Austrian theory of capital and the theory of economic organization. Our starting point is the key Austrian notion of capital heterogeneity which we interpret in terms of attributes. Most capital assets are multi-attribute in nature, and many attributes may not be known to entrepreneurs. This fosters a need for experimenting with capital combinations. Because there are costs of measuring attributes, this process (...) has implications for economic organization. Thus, we argue that novel implications for the understanding of ownership and the existence and boundaries of firms may be teased out of such a perspective.La théorie du capital représente une des contributions les moins connues d’Israel Kirzner. Dans cet article, nous établissons le lien entre la théorie autrichienne du capital et la théorie de l’organisation économique. Notre point de départ est la notion autrichienne fondamentale d’hétérogénéité du capital que nous interprétons en termes d’attributs. De par leur nature, la plupart des biens capitaux possèdent plusieurs attributs qui peuvent demeurer inconnus aux entrepreneurs. Ceci accroît la nécessité d’expérimenter des combinaisons capitalistiques. Etant donné les coûts qu’entraîne la mesure des attributs, ce processus a des implications quant à l’organisation économique. Ainsi, cette perspective permet de tirer de nouvelles implications pour notre compréhension de la propriété, de l’existence et de la taille des firmes. (shrink)

RésuméL'idée d'un “monde des images” situé quelque part entre les mondes immatériel et matériel est un pivot de la spéculation eschatologique dans l'Islam médiéval tardif. Comme cela a déjà été reconnu, le concept a été inauguré par al-Suhrawardī. Cependant, ses fondements plus proprement philosophiques et en particulier la notion d'images “suspendues” – des images dotées d'un statut en quelque manière objectif plutôt que purement mental ou subjectif – méritent d’être davantage clarifiés; et c'est ce que cet article entend faire. Puisque (...) le concept de “formes suspendues”, tout en étant appliqué par al-Suhrawardī à des questions eschatologiques dans le dernier traité de sa Philosophie de l'illumination, apparaît pour la première fois dans une discussion sur la vision spéculaire, j'examine assez en détail la conception avicennienne de la vision spéculaire telle qu'elle est présentée dans le Shifāʾ, ouvrage contre lequel al-Suhrawardī réagit. J'entreprends ensuite une reconstruction détaillée de deux paragraphes de la Philosophie de l'illumination en accordant une attention particulière à la question du statut ontologique des images “suspendues” ou “auto-subsistantes” ainsi qu’à l'idée selon laquelle les miroirs servent non pas de lieux dans lesquels les images résideraient, mais de lieux où elles deviennent manifestes. (shrink)

Graduates of doctoral programs are expected to be competent at designing and conducting research independently. Given the level of research competence needed to successfully conduct research, it is important that assessors of doctoral programs have a reliable and validated tool for measuring and tracking perceived research competence among their students and graduates. A high level of research competence is expected for all Ph.D. graduates worldwide, in addition to in all disciplines/fields. Moreover, graduates of Ph.D. programs may complete their studies in (...) one country but then obtain a research position in another country, emphasizing the need to ensure that all doctoral programs are fostering similar levels of research competence. Thus, the purpose of this study was to gather additional evidence for validity and reliability of the Research Competence scale. Specifically, we sought to extend the findings of by adapting the scale, translating it to other languages, and applying the tool with a sample of early stage researchers. Our findings provide initial evidence that the adapted PR-Comp is appropriate for use in three languages and across a variety of disciplines/programs of study. (shrink)

This book provides practical and research-based chapters that offer greater clarity about the particular kinds of teacher reflection that matter and avoids talking about teacher reflection generically, which implies that all kinds of reflection are of equal value.

Although the first three dimensions of evolution outlined by Jablonka & Lamb (J&L) are persuasively presented as aspects of evolutionary science, the fourth dimension, symbolic evolution, is problematic: Though it may in some metaphorical sense be happening, there cannot be a science of symbolic evolution. Symbolic evolution essentially involves meaning, which, besides being nonphysical, resolutely resists scientific categorization.

Kripke [1972] a présenté un argument très influent contre le physicalisme, basé sur l’idée suivante : les énoncés psycho-physiques—ceux qui identifient les phénomènes psychologiques de l’expérience à des phénomènes physiques—sont, s’ils sont vrais, nécessairement vrais. Pourtant, ils semblent être contingents. Par la suite, Levine [1983] a prétendu que l’apparence de contingence était due à un «fossé explicatif » qui se trouve dans ces énoncés : les phénomènes physiques ne semblent pas rendre compte de l’existence et des caractéristiques des phénomènes psychologiques. (...) Je suspecte que l’apparition du fossé explicatif résulte, du moins en partie, du fait que l’on prend la subjectivité de l’expérience comme une condition ontologique alors qu’elle serait épistémologique. Dans ce papier je présente et développe cette idée. (shrink)

Although Nicolai Hartmann's Ethics is one of the most important works on ethics in this century, it is still little known in the English-speaking world, and most probably suffers from the same negligence on the European continent. Eva Cadwallader's book, I hope, will succeed in generating some interest in Hartmann's Ethics. Her book is a very competent exposition of Hartmann's Platonistic theory of values. It is also a critical study. She takes great pains to bring out the exact points (...) of some of Hartmann's highly subtle theses, assesses some of his arguments in order to bring out their strengths and weaknesses, and compares Hartmann's Platonism to other contemporary Platonistic theories, especially G. E. Moore's. On the whole she succeeds, in my view, in making a variety of value Platonism a credible philosophical thesis. Nicolai Hartmann's Platonism--in value theory as much as in his general ontology--is a most unusual combination of seemingly incompatible theses. Cadwallader distinguishes between various theses defended by value Platonists, and shows perspicuously which of them Hartmann accepts and which of them he rejects. A particularly interesting aspect of Hartmann's theory is his combination of Platonism with an open-ended pluralism of values, an axiological fallibilism, a sort of axiological relativism and a rejection of the view that moral issues can always be "objectively" resolved. In fact, although as a Platonist Hartmann maintains that values have an objective Ansichsein, he also insists that there are "objective" conflicts among values--which provides him with one ground for rejecting the resolutionism thesis. Generally, Platonism is combined with a cognitivist theory of values. Here again Hartmann's position is unconventional. He shares with Max Scheler the view that values are "apprehended" in appropriate emotional experiences, and he also argues for the objectivity of values in a Kantian sort of transcendental manner. Cadwallader discusses these aspects of Hartmann's theory in great detail and with competence. In his Introduction to the book, Werkmeister points out Hartmann's differing attitudes towards ethical and aesthetic values.--J. N. Mohanty, Temple University. (shrink)

continent. 1.2 (2011): 129-135. Introduction Vincent W.J. van Gerven Oei Successions of words are so agreeable. It is about this. —Gertrude Stein Nachoem Wijnberg (1961) is a Dutch poet and novelist. He also a professor of cultural entrepreneurship and management at the Business School of the University of Amsterdam. Since 1989, he has published thirteen volumes of poetry and four novels, which, in my opinion mark a high point in Dutch contemporary literature. His novels even more than his poetry are (...) criticized for being inaccessible, which I generally take to be a compliment. It would be like saying that Fernando Pessoa is inaccessible, which he is not. Neither is Wijnberg. When we think of the combination economist-poet we are immediately reminded of the American poet Wallace Stevens, who, as the story goes, had two stacks of paper on his desk, one for contracts, one for poems. We also know that Stevens wrote on the economy and that questions of economy and insurance surface at multiple points in his poems. The following text is a very preliminary attempt to point at the intersections between poems, novels, business, and poetry in Wijnberg’s work. On the back cover of his novel De opvolging ( The Succession , 2005), Wijnberg states the following: “[This is] a novel for whomever is interested in the workings of a company as much as in the workings of a poem.” Wijnberg thus claims that the way in which a company “works” may be similar to the way in which a poem “works.” The question is the obvious one, what does this similarity consist in? De opvolging tells the story of company in which bosses and company doctors, secretaries, children, clowns, and beggars have tons of meetings, recite poems, perform plays, tell jokes, and succeed each other, climbing up and down in the company’s hierarchy. De opvolging is a novel in which the career of people follows the career of words. It resonates with Gertrude Stein's sentences, "Grammar. What is it. Who was it" (1975, 50). The words in Wijnberg's poems are like he characters in his novel. And if we keep in mind this allegorical reading of De opvolging , which is obviously only one of the possible readings, we may be able to understand some aspects of Wijnberg’s poetry. A repetition is already a pun. Look, that word is trying it again, as if it is afraid that by not doing it it would give up the hope that it will ever be able to do something. A pun is the opposite of the first word coming to the mind of someone who shouts it when he suddenly discovers something. (104) The repetition, the succession of the same word, is already a pun, a joke. The succession of the father by the son after the revolution is a joke. "Look he's trying it again!" The essence of a joke is a repetition. Archimedes’ “Eureka!” is its opposite. Poems can easily become jokes, depending on the way the words follow and repeat each other. In De opvolging , the careers of the bosses, good and bad secretaries, and company doctors easily become jokes, as they are “afraid that by not doing it [they] would give up the hope that [they] will ever be able to do something.” Not only the repetition, but also the distance and difference between the words in a poem, their cause and effect relations can be read as company relations. This becomes clear when we, for example, read the first lines of the poem “Cause, sign” from Het leven van ( The Life Of , 2009). A sign lets know what is going to happen, a cause lets it happen. If the sign also lets happen there is no reason to isolate it, because then I would isolate some- thing only because it’s different for me. If I didn’t have to write this myself, but would have secretaries to whom I could dictate it, I would be able to say more about it. (49) Upon reading the first two lines we can already conclude that any word may be cause or sign or both. If a sign is also a cause there is no reason to discriminate it, yet to the poet they are still different. This difference only becomes expressible the moment he would have a secretary. Just like in De opvolging , the secretary introduces a distance; not in a company but in a poem. Hence the difference between “good” and “bad” secretaries in a company, where the good secretary of one boss may be the bad secretary of another one. The more we can say about the bosses of the company, or signifiers of the poem, the greater the distance we introduce between them and us. We should take serious the relation between Wijnberg’s novels and poems. Although they operate on different scales, they explain and converse with each other. Another example may be the novel Politiek en liefde ( Politics and Love , 2002), which deals with the relation, precisely, between politics and love. In the novel, Nicolai, a lieutenant in the Dutch army, is sent to Africa on a military mission. Upon leaving a receives a letter from his father. Dear son, Don’t do anything stupid before your father has advised you to do so. Your mother asked me to write a wise letter. I have been looking for wisdom for half a day and haven’t found much. If you borrow a small amount from a bank you become the bank’s slave, but if you borrow a couple of millions and spend them as quickly as possible the bank becomes your slave. What I want to say is that you have to return from Africa in good health, and before you know it the world will be your slave [....] Signed with a kiss from your father. (88) The line, “If you borrow a small amount from a bank you become the bank’s slave, but if you borrow a couple of millions and spend them as quickly as possible the bank becomes your slave,” returns as the title of poem in Het leven van: “If I borrow enough money the bank becomes my slave” (12-3), which elaborates this theme. So both in the way that these poems are structured and in their subject matter, they refer to the structures of our economy, to the ever-continuing line of CEOs succeeding each other like words, to the distance between them introduced by bureaucracy, and giving and receiving as economical and poetical acts. Poem and economy map onto each other, as in another episode from De opvolging : Edward reads two of the beggar’s poems about presents. Of a holiday nothing remains, except for memories, and if some of them are bad I’d rather forget them all; if I get a present I’d rather get something that’s useful to me for a long time. If I may choose, I choose what I can use longest, long enough to partially forget that this was the present, because it feels bad when nothing is left of it. […] Giving away becomes destruction in the stock destruction economy [ voorraadvernie -tigings-economie ], that is a gift economy [ geschenkeneconomie ], encountering for the first time an economy in which there’s selling and buying on markets. Instead of destroying supplies someone can also quickly say that they aren’t worth anything anymore; if someone wants to take them I’d gladly give him something extra. In a stock destruction economy he is someone who each day wants to work more hours than his colleagues. If around a company there is a gift economy in which someone’s rank is determined and made visible by the gifts someone can give someone else, a company will be more often character- ized by an invisible or unclear system of ranks. (152) Two poems about gifts present two different economical models, described by Wijnberg with the terms “stock destruction economy” and “gift economy.” Here we immediately recall the opposition introduced by George Bataille’s work on the concept of expenditure in The Accursed Share , where a “general economy” would surpass the stock destruction economy based on scarcity (capitalism) and become a gift economy (potlatch) and an egalitarian (communist) society. These claims are made both on the level of the poems and in their discursive explanation. They follow each other and on each other. I would like to finish this introduction to Wijnberg’s writing with a translation from his novel De joden ( The Jews , 1999), which develops the story of Hitler abdicating as chancellor of the Third Reich, appointing philosopher Martin Heidegger as his successor. In a conversation with two Russian actor-spies, sent by Stalin to figure out the situation, philosopher Walter Benjamin describes the abdication scene. Maimon: You were there when Hitler resigned? Benjamin: In the room we’re right now. The desk and the chairs are new. After his resignation Hitler would like to take his furniture to his new house. Martin naturally agrees. It is a sunny day. Martin is very nervous and complains about the heat. Martin is wearing his best dark blue suit, not his professor’s robe. Hitler is wearing his uniform. We enter the room and Hitler gets up and embraces Martin. Martin is not very good at embracing. Hitler shakes his hand. Hitler’s cap is on the desk. The cap has a metal lining. Hitler has strong neck muscles. Hitler says: A man is unclean. He takes a bath. Does he make the bath water unclean? I say: a man is unclean. He steps into a river. A little further a man steps into the river; does he become unclean? Hitler nods. I say: a man is standing in music. Another man hears the music but also sees the first man moving on the beat of the music in a way that he is certain that the music would excite different feelings in him if he wouldn’t to see the first man. Hitler says: a man is clean, listens to music, is suddenly touched and he doesn’t know by what. The conversation ends in the way you know it ends. Hitler picks up his cap from the desk and puts it on Martin’s head. (73-4) Aware of the never ending debate on the question of Heidegger’s involvement in the Nazi regime, Wijnberg has the audacity to present the arguments of complicity in the religious terminology of cleanliness and uncleanliness, while at the same time recalling overtones of Hitler’s supposed love for Wagner, suggesting a relation between Benjamin and Hitler, and so on. The space of this introduction is to small to treat a novel like De joden , a reading of which together with passages from Philippe Lacoue-Labarthe's Heidegger, Art, and Politics: The Fiction of the Political , Jacques Derrida's Of Spirit , Christopher Fynsk's Heidegger: Thought and Historicity , and Avital Ronell's The Telephone Book would be extremely elucidating and potentially open new avenues in thinking Heidegger's emphasis on poetry after the fall of the Nazi empire. But at this point we will have to curb our curiosity and follow the poet himself. The themes of the relation between business and poetry, but also Chinese landscape painting, love, Indian and Japanese poetry, and Western philosophy are analyzed and assimilated in Wijnberg’s work without ever losing the clarity of expression. It may be that, according to Alain Badiou, the “Age of the Poets” is over, but its end (Paul Celan) has exactly brought a new balance between philosophy and poetry, and it is this playful, but nonetheless serious balance that makes one hope that one day Wijnberg’s complete oeuvre might become available to readers across the planet. Tiranë, Albania February 15, 2011 English translations (all of them translated by David Colmer, who is preparing an English collection of Wijnberg’s poems entitled Advanced Payment ): Poetry International Words Without Borders Green Integer Review from Het leven van ( The Life of ) THE LIFE OF KANT, OF HEGEL As if every day he takes a decision that is as good as when he’d been able to think about it all his life. The life of Kant, of Hegel, the days of the life of, select three or four of them. Tell what he has discovered during those days as if he were the last one who knew so little. Give me something that I can cancel against then I can prepare myself for it. The reward is that I may continue with what I’m doing, it doesn’t matter how long it takes. This has nothing to do with everything remaining the same if I say that I no longer want anything else. I wouldn’t be able to say in which one and the other occur in a way that I if I knew something to cancel that one against it wouldn’t be possible now. The stars above my head and being able to say what belongs to what if I’ve let them in. FOLLOWING MY HEART WITHOUT BREAKING THE RULES Observing the rules without observing the rules by going where the rules no longer apply. I could also observe the rules there by applying them to what at great distance may resemble what the rules are about. But why would I do that, not to confuse someone who is seeing me from a great distance? Behind this morning the morning prepares itself when the rules are everything I have. IF I BORROW ENOUGH MONEY THE BANK BECOMES MY SLAVE A bank lends me money, if I don’t pay it back they tell my boss that he has to pay them my salary. But they have to leave me enough to eat and sleep and an umbrella when it’s raining. They can also empty my house, the furniture isn’t worth a lot, but every little helps. Each morning I leave for work, if I don’t start early they’ll soon get someone else, no bank will lend me money when the sun is shining. My boss has given me a cat to raise as a dog. Of course I know that it won’t work out, but I’ve asked for a week—maybe the cat gets lucky, maybe I get lucky. My hands around a cup of coffee, before I leave for work, warm-empty, cold-empty, as if hidden in the mist over a lawn. What I make when there’s no work left for me, I’m ashamed to say how little it is. Once I’m outside I check it, if they watch out of the window they can see me doing it. Suppose it is so much that I’d stay counting for hours, it’s getting dark and I’m still there. They stay watching for a while once they’ve finished their work, but have to go home, I get that, sure, I could also go home and continue counting there. If it’s too little running back immediately won’t help, because nobody’s there anymore, and if I come back tomorrow I may have spent what’s missing tonight. Going somewhere where it’s warm enough to walk around without clothes during daytime, it helps me to know that something’s more there than here. For someone like me there’s work anywhere, it shouldn’t take a week to find work for me there. Three times work and a home close to work, I may choose one and try for a week whether I want to stay there. If at the end of the week I don’t want to stay I’m back on the next day, then it was a week’s holiday. RULES If that’s against a rule, it’s yet another one that I cannot observe, or only so briefly that I cannot re- member it later. Anyways the rules are only there to help me remember what I need in order to do better what I do. In that respect there’s no difference between the rules that I find in a book and the rules that I think of early in the morning. I know that because I’ve made a rule just now nothing has yet to observe it. CAUSE, SIGN A sign lets know what is going to happen, a cause lets it happen. If the sign also lets happen there is no reason to isolate it, because then I would isolate something only because it’s different for me. If I didn’t have to write this down myself, but would have secretaries to whom I could dictate it, I could to say more about it. If something is taken away from me I consider how it would be if the opposite had been taken from me. That is what causes or signifies what is farthest away from what is caused or signified by what has been taken away from me. note: For the translations of “The life of Kant, of Hegel” and “If I borrow enough money the bank becomes my slave” I was able to consult David Colmer’s wonderful translations. (shrink)

This is a remarkably interesting and valuable book on the value-theory of Nicolai Hartmann. As its content is very complex, we shall sum up the main points made in its various chapters before proceeding to comment on them.

In a series of joint papers, Teppo Felin and Nicolai J. Foss recently launched a microfoundations project in the field of strategic management. Felin and Foss observe that extant explanations in strategic management are predominantly collectivist or macro. Routines and organizational capabilities, which are supposed to be properties of firms, loom large in the field of strategic management. Routines figure as explanantia in explanations of firm behavior and firm performance, for example. Felin and Foss plead for (...) a replacement of such macro-explanations by micro-explanations. Such a replacement is needed, Felin and Foss argue, because macro-explanations are necessarily incomplete: they miss out on crucial links in the causal chain that connect macro phenomena with each other. I argue that this argument is flawed. It is based on a doubtful if not outright incorrect understanding and use of Coleman’s diagram. In a sense to be explained below, only if Coleman’s diagram is squared it can accurately account for the relations between individual action and interaction, routines and firm behavior and firm performance. Once Coleman’s diagram is squared, one can see why and how macro-explanations need not miss out on any link in the causal chains that connect macro phenomena. Micro-analyses are still needed, not to highlight and specify causal links that macro-explanations miss out on, but to check whether the many properties that are ascribed to routines in macro-explanations of firm behavior are warranted. (shrink)