Do design rules facilitate or complicate architectural innovation in innovation alliance networks?

Architectural innovation is fundamental to the renewal of technological systems. However, it can be a real challenge to organize architectural innovation, all the more so when success hinges upon close collaboration with other firms that are responsible for different subsystems of the end product. This study examines the impact of product design rules and the degree of organizational coupling among innovation network partners on the performance of architectural innovation projects. Using data from 270 collaborative innovation networks in the United States, we found an inversely U-shaped relationship between the presence of design rules and architectural innovation performance. When a certain turning point is reached, dominant design rules have a pronounced net negative impact on the performance of collaborative architectural innovation projects. At the same time, our findings reveal that lead firms can alleviate this negative effect of strong design rules by selecting loosely coupled innovation partners. Accordingly, our findings suggest that the presence of design rules and the extent of partner coupling should be considered jointly when optimizing network configurations that focus on architectural innovation.