Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of Established Firms

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The concept of architectural innovation was first proposed in this paper, where Henderson and Clark felt that the categorization of innovations as either incremental or radical was inadequate. They defined such innovation as:

[Architectural] innovations … change the way in which the components of a product are linked together, while leaving the core design concepts (and thus the basic knowledge underlying the components) untouched.

This means that architectural innovation involves rearranging components ( various known parts) in a system, and linking them up in new ways. Henderson and Clark are of the opinion that such innovations may threaten established organizations –

It destroys the usefulness of a firm’s architectural knowledge but preserves the usefulness of its knowledge about the product’s components.

One of the core ideas proposed is that once a dominant design has emerged, the architectural knowledge of the product becomes ingrained in the organizational knowledge and information processing structures as firms strive to focus on refining the process rather than searching for new linkages between components. Thus in the event of an architectural innovation, critical information may be screened out, and solutions overlooked because of the firm’s resistance to change. Consequently, firms may find it difficult to react and regain market leadership thereby losing its competitive edge. Empirical evidence photolithographic alignment equipment industry has shown that is indeed the case. In all four episodes of architectural innovation in the industry, the market leader failed to respond effectively to new architectural innovations due to its preoccupation with the knowledge it was equipped with of the existing obsolete architecture.

This paper is based on empirical data from both semi-structured interviews, and journals and reports. Such materials are based on the opinion of an individual or group, whose vested interests may undermine their...
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