Mind the gap: adapting and reorienting firms’ organizational architecture

This paper illustrates how organizations change their architecture in response to environmental feedback, measured in relation to performance gaps. Based on a study of 762 organizations, we explore the modus operandi underpinning architectural change and argue that the interplay between social and historical aspiration levels: (a) constitutes a benchmark against which organizations measure current performance; and (b) defines the scope of architectural change. While a small performance gap leads organizations to implement minor architectural changes (adaptation strategy), a large performance gap requires major change (reorientation strategy).