Strategic Partial Misting: The Linkages Between Modularity, Value, and the Mirroring Hypothesis

Abstract

The mirroring hypothesis suggests a correspondence between product, firm and industry architectures, however, empirical support to date has been mixed. We suggest that the inconsistent results can be attributed to whether mirroring studies utilized a ‘weak’ or ‘strong’ test of mirroring and which organizational tie is used to measure its presence or absence. Drawing upon a study of the UK pensions industry, we break new ground by examining mirroring across time, for different types of product architecture, and using three different organizational ties. Given the ‘misting’ literature has almost exclusively highlighted technological contingencies, we observe that ‘value’ characteristics at the product component or sub-system level of a product create a contingency that sees firms either choose to mirror or strategically break the mirror ex-ante. Our longitudinal study highlights how product and industry architectures change over time according to different stimuli and that mirroring similarly evolves in response to strategic choices.