Modularity, value and exceptions to the mirroring hypothesis

Nicholas Burton*, Peter Galvin

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

The mirroring hypothesis suggests a correspondence between product, firm and industry architecture, however, empirical support to date has been mixed. Drawing upon an inductive study of the UK pensions industry, we break new ground by investigating the extent to which product, firm and industry architectures correspond in the face of changing institutional dynamics – most notably dynamic regulatory change. In considering periods of both correspondence and non-correspondence at the aggregate sector level, our results show that firms in the sector seek the efficiency benefits of product component-level mirroring, but only to the extent that the component has low value. In contrast, where components provided an opportunity to capture value, managers strategically chose non-correspondence by developing stronger relational ties with suppliers and, in a later period, through vertical (re)integration, despite the systemic modularity of the product.

Original languageEnglish
Pages (from-to)635-650
Number of pages16
JournalJournal of Business Research
Volume151
Early online date23 Jul 2022
DOIs
Publication statusE-pub ahead of print - 23 Jul 2022

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