Grounding the “mirroring hypothesis”: Towards a general theory of organization design in New Product Development

Abstract

The similarity between product architecture and organization design has become known as the “mirroring hypothesis”. We present a theoretical model of new product development using the NK-model, in which we represent organization design with varying degrees of mirroring. The main result holds that perfectly mirroring organizations only perform well in designing products with many components and low complexity, while imperfectly mirroring organizations do better in designing product with few components and high complexity. Our theoretical model can inform future empirical research, which hitherto lacked a common representation framework for organization design.