Mind the Gap: Adapting and Reorienting firms’ organizational architecture

The study of organizational architecture builds upon the analysis of the different answers provided by organizations to increase the fit with their external environment. Investigating such theme, scholars emphasize the evolutionary nature of organizations in terms of adaptation, flexibility, evolution and decomposability: organizations combine and recombine elements that compose their architecture, modifying them in a number of different ways. In the present work we examine how organizations modify their architecture in response to environmental feedback, measured in terms of performance gap. In a study of 755 organizations, we find that, depending on the presence of a performance gap, organizations decide whether to maintain their current architecture or to modify it. Interestingly, the extension of the performance gap affects the magnitude of organizational architectural change: on the basis of the extension of the performance gap, organizations will implement either minor or major modifications in their architecture.