Architectural Change across Levels: Understanding Drivers of Industry Modularity

This paper develops a conceptual framework discussing architectural change at different levels to understand moderating factors that drive differences in industry modularity. It outlines how modularity increases at the product and organizational level, focusing on codification of standardized interfaces and stabilization of organizational practices. Industry modularity increases when product interfaces and organizational practices disseminate beyond the focal organization. Several moderating factors that influence this dissemination process are highlighted. At the product level I focus, first, on strategic considerations regarding standardization, and second on capability trajectories and firm specialization. At the organizational level I highlight informational mechanisms and convergence of cognitive frames, and the role of technological breakthroughs and its influence on the complexity and interaction of organizational practices. As such, the study presents a contingent perspective toward understanding ...