The Role of Micro‐Strategies in the Engineering of Firm Evolution*

abstract This paper proposes a model of strategic evolution as a sequence of intentional recombinations of a company's Core Micro‐strategy with new resources and organizational routines. A Core Micro‐strategy is defined here as the established system of interconnected routines, micro‐activities and resources that can be traced through most of a company's strategic initiatives. The paper is based on two comparative case studies and on theories of evolution in social and cultural systems, intraorganizational ecology and the resource‐based view of the firm. The resulting model advances the existing literature on strategy evolution by (1) incorporating a more direct and salient role of managerial leadership within processes of strategic evolution, (2) incorporating a central role for micro‐level processes through which management can directly and intentionally shape strategic evolution, and (3) proposing recent developments in the resource‐based view of the firm as a suitable theoretical framework with which to explain the processes in which strategic evolution is rooted. The model also contributes to the dynamic capabilities perspective by offering a microprocessual interpretation of their workings. The resulting view of dynamic capabilities suggests that they operate more through repeated recombination patterns of stable organizational factors, than through disruption of existing practices. The paper describes the empirical evidence which emerges from analysis of the two case studies; the two descriptive models of strategy evolution inductively built on the cases; the theoretical model resulting from cross‐case analysis and iteration between the two grounded models and theoretical frameworks.