Paper to be presented at the 25th Celebration Conference 2008 on ENTREPRENEURSHIP AND INNOVATION - ORGANIZATIONS, INSTITUTIONS, SYSTEMS AND REGIONS Copenhagen, CBS, Denmark, June 17 - 20, 2008 BEYOND PRODUCT ARCHITECTURE: ADDRESSING THE CHALLENGES OF COMPLEX PRODUCT DEVELOPMENT Markus Becker University of Southern Denmark, Strategic Organization Desig mab@sam.sdu.dk Francesco Zirpoli University of Salerno, Dept. of Mechanical Engineering fzirpoli@unisa.it Abstract: In the development of complex products, two decisions have an important impact on the organization of product development, its outcomes and the development of firms competences: (1) how to decompose the overall development task in order to manage problem-solving complexity, and (2) how to allocate such tasks in order to benefit from knowledge specialization. This paper focuses on the link between task decomposition and task allocation decisions. Grounded in a longitudinal case study of a major European auto manufacturer and eight of its first-tier suppliers, the article identifies a new way of allocating design tasks along the auto manufacturer s value chain. The auto manufacturer switched from making task allocation decisions according to the task decomposition scheme provided by product architecture, to a novel system ( template approach ). This empirical finding casts doubt on the isomorphism between product architecture and organization architecture, a cornerstone of the dominant approach in the innovation management literature. We propose an alternative criterion for allocating design tasks that adds to the conceptual frameworks for organizing the development of complex products. Firms can thereby achieve the benefits of both (1) knowledge specialization provided by leveraging external sources of innovation and (2) learning opportunities concerning the product architecture and performance guaranteed by retaining component-specific knowledge in-house. We further propose that this way of organizing task allocation might be the prelude to a fundamental shift in organizing the development JEL - codes: O32, L23, M10