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
