Dhruv Rajesh Agarwal, TWC- Thursday

Architectural innovation: The reconfiguration of Existing Product technologies and the

Failure of Established Firms, is an article written by Rebecca M. Henderson and Kim B.
Clark. They talk about how the conventional classification of innovation into incremental and
radical is insufficient to explain failures of established firms when there is a slight
improvement in the product technology, and go on to explain that a new concept-
architectural innovation is needed to explain them. They identify the different types of
technological change and build up a conceptual framework about the knowledge required to
explain technological change. Illustrating the concept by providing an analysis of the
semiconductor lithographic industry, the authors attribute the failure of the firm to two main
problems- difficulty of firms in recognition of the architectural innovation and incorporating
the change of the innovation in the system due to the established communication channels,
information filters and problem solving strategies.
The paper is very relevant as the authors talk about how the management has to beware of
losing track of those innovations apart from incremental and has to take measures to promote
every form of innovation in the company. The argument is built on the premise that in order
to increase efficiency, firms get too focused on improving their existing core components,
thereby providing an opening for new firms to enter the market through minor yet significant
innovations. However, there are a few drawbacks- firstly, due to the date of publishing; they
cover companies in the 1970s and therefore cannot explain the current modified scenario of
innovation. Also, the impact of architectural innovation on different industries isnt covered.
The authors could provide the readers with a better understanding by covering a few more
topics.
The authors encourage managers to have a macroscopic view of technology where they
promote innovations of every type. It can also be loosely related to Marketing Myopia, a term
Dhruv Rajesh Agarwal, TWC- Thursday


coined by Levitt where he explains the failure of firms due to the myopic view of their
product. Firms in this case are too focused on selling their products and thus miss out on
innovations of their products which will serve the ever changing consumer needs. The
concept can be applied even today. With rapid innovation in the IT sector, it becomes
necessary for firms to constantly innovate to stay in the game. A perfect example would be
Apple Inc. Which captured the market which its invention of the IPod, clearly an architectural
innovation over the existing mp3 players. Thus, they talk about how the management needs
to have a macroscopic view of the technology and not get too entangled in its channels, filters
and strategies.
The paper has certain drawbacks. Firstly, today there are new forms of innovations which let
companies outsource R&D to other companies. In this case, as shown in the connect and
develop model of P&G, innovation could strengthen the company by enabling smaller firms
to form a part of the supply chain model already established. Also, the paper could be
improved by talking about how various firms differ in their culture, history and leadership
and therefore would deal with innovations differently in different industries. Secondly, it
could also cover different types of architectural innovation, where the change is more
inclined either toward incremental or toward radical innovation. This could be a factor in
deciding how well can firms cope up with architectural innovation.
To conclude, the paper provides insight and explains the fall of established firms when there
is slight improvement in the product technology. It is very relevant in todays world of rapid
innovations and suggests managers to keep an eye for every form of innovation. However,
the paper could be updated to include the new types of innovations taking place today and
also by explaining the impact of such changes on firms in different industries and with
different cultures and histories.
Dhruv Rajesh Agarwal, TWC- Thursday