'Closing the Loop' in an Architectural Perspective on Strategic Organizing: Towards a Reverse Mirroring Hypothesis

This paper elaborates important systemic interrelationships between firms' strategic choices of product architectures and organization architectures, and between firms' architectural choices and the industry structures and competitive/cooperative dynamics that emerge in an industry. We formalize a "Reverse Mirroring Hypothesis" suggesting that organizational architectures desired by firms influence their choices of product architectures. We embed firms' strategic architectural decisions in a co‐evolutionary model linking product market evolution, firms' architectural choices, and industry evolution. We invoke both transaction costs and capabilities perspectives to suggest how firms' assessments of their relative potential for capturing gains from specialization versus gains from trade influence their strategic architectural choices. We develop concepts of architectural commonality, architectural specificity, industry standard architectures, and firmspecific architectures to analyze strategic implications of firms' architectural choices.