Three essays on architectural complexity and organization of innovation in knowledge-intensive firms

This thesis focuses on the management of innovative activities in knowledge-intensive contexts. Specifically, it investigates how the product and organizational architectures co-evolve along the process of inter-generational technological innovations. It examines the drivers of such co-evolution, the underlying mechanisms, and its inter-temporal dynamics. To accomplish such ambitious task, I meticulously collected micro-data of developing an industrial software over 60 months, during which 13 versions of the software were released.

The first essay of the thesis deals with the complexity growth of product designs across generations of innovation. There, I first examine the path-dependent evolution of complex designs, and then, investigate how such process is moderated by work organization. The findings suggest that in order to contain future design complexity, team work organization is more effective than individual task assignment, especially for cyclical design elements. This essay contributes to the innovation management literature, highlighting how path dependence and organizational choices jointly shape product architecture evolution, as well as how designers might prevent products and services from evolving overly complex.

The second essay uncovers the dynamics of the mirroring hypothesis—a well-established proposition maintaining that product architecture and organizational structure of the developing entities (individuals, teams, or organizations) mirror one another. It is well documented that misalignments between product and organizational architectures might undermine firm’s competitive advantage. Thus, using a micro-dynamics perspective, I examine the misalignments between technical dependencies at the product level and corresponding collaborations at the organizational level, and investigate its antecedents. The findings suggest that misalignment increases when development tasks are routine, engineers are not co-located, and over time, as the deadline of releasing new software version approaches. These findings contribute to the organizational design literature, documenting how micro-organizational choices contribute to the misalignment between product and organizational architectures.

The third essay focuses on organizations’ key decision of search strategy in their problem-solving activities. Specifically, it investigates how problems’ characteristics influence the firms’ decision of organizing search endeavors jointly or via independent individual efforts. My empirical findings demonstrate that the problem-solvers pursue joint search for solving complex problems (involving cross-domain interdependences), whereas they opt to independent search efforts when searching in distant loci (creating new features). Moreover, the results show that in the short term (during the development of each version), the engineers resort to joint search, whereas in the long term (along the subsequent versions), they turn to individual search expeditions.

Overall, the thesis contributes to innovation management literature by shedding light on the processes and dynamics of technological and organizational systems’ co-evolution during continuous innovative activities and at the micro-level of study. It documents the path-dependent growth of a complex technological system and reveals the organizational contingencies of the process. It also explains how such organizational contingencies are endogenously shaped by innovative activities of problem solvers. Eventually, by focusing on the misalignment between organizational and technological systems, this thesis reveals how the co-evolution of the two interdependent systems unfolds as the synthetic outcome of the dialectical process of technological complexity growth and organizational uncertainty resolution over time.