The architecture and design of organizational capabilities

Abstract

This article considers how ideas from evolutionary theory in general, and Sidney Winter in particular, can be fruitfully combined with ideas from Herbert Simon and the Carnegie tradition on decomposability and cognitive limits. Rather than focusing on any one individual issue, this article outlines a research program on the architecture and design of organizational capabilities. Such a program can help us explain how labor is divided and organized within and between firms and can consider the implications of the division of labor for the process of capability development. Extensions to this emerging research program are proposed: The emergence and evolution of intra- and inter-organizational boundaries, the implications of such boundaries for different types of capabilities and for the knowledge accumulation process, and the design of firms’ architecture to support adaptation and change are all briefly discussed.