‘Architecture’ is introduced as the first of the three primary sources of distinctive capabilities and it refers to a network of relationship contracts within, or around, the firm. It can be subdivided into internal architecture (relationships with employees), external architecture (relationships with their suppliers and customers) and networks (relationships among a group of firms engaged in related activities). It adds value by helping create organizational knowledge and routines that enable the company to respond flexibly to changing circumstances and allows easy exchange of information. Note that such capabilities can only add value in a long‐term context, which penalizes opportunistic behaviour.
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