Architectural Shift: Knowledge absorption under a shift in dominant design

The emergence and subsequent consolidation of a dominant design is a common phenomenon across industries. Once a dominant design is established, firms innovate incrementally to obtain competitive advantage. When technological advances render the dominant design obsolete, firms are forced to adjust in order to survive. This talk addresses the question of how firms absorb new knowledge when the dominant design shifts. To answer it, we conducted an in-depth qualitative case study at a large European automotive supplier. Our findings suggest that the dominance of an integral product architecture in the automotive industry impacts the ability of firms to learn. More specifically, we contend that an integral product design facilitates the absorption of new knowledge under a dominant design yet impedes the absorption of new knowledge when the dominant design shifts. We thereby underscore the growing recognition of contextual factors as moderators of firm learning.