We discuss the microfoundations of routines and capabilities, including why a microfoundations
view is needed and how it may inform work on organizational and competitive heterogeneity.
Building on extant research, we identify three primary categories of micro-level components
underlying routines and capabilities: individuals, social processes, and structure and design. We
discuss how these components, and their interactions, may affect routines and capabilities. In
doing so, we outline a research agenda for advancing the field’s understanding of the
microfoundations of routines and capabilities.