Modularity, value and exceptions to the mirroring hypothesis

The mirroring hypothesis suggests a correspondence between product, firm and industry architecture, however, empirical support to date has been mixed. Drawing upon an inductive study of the UK pensions industry, we break new ground by investigating extent which architectures correspond in face changing institutional dynamics – most notably dynamic regulatory change. In considering periods both non-correspondence at aggregate sector level, our results show that firms seek efficiency benefits product component-level mirroring, but only component low value. contrast, where components provided opportunity capture value, managers strategically chose developing stronger relational ties with suppliers and, later period, through vertical (re)integration, despite systemic modularity product.