Abstract
This paper explores the issues of technological and organizational coevolution in the process of diversification. In contrast to conventional approaches to diversificationthat focuses primarily on the product relatedness issue, this paper portrays diversification as a complex process of coevolution across levels of analysis anddimensions. Using the Taiwanese personal computer industry as an example, this article suggests a systemic approach that looks into the dynamics between firm-levelstrategic actions and sector-level emergent properties, thus contributing to an evolutionary theory of firm and sectoral boundaries.