Do modular products lead to modular organizations?

Glenn Hoetker

Research output: Contribution to journalReview article

192 Scopus citations

Abstract

The tacit assumption that increased product modularity is associated with advantageous increases in organizational modularity underlies much of the literature on modularity. Previous empirical investigations of this assumption, few in number, have faced numerous confounding factors and generated conflicting results. I build a causal model for the relationship between product and organizational modularity, which I test using a distinctive empirical setting that controls for confounding factors present in previous studies. I find support for only part of the assumed relationship, showing that modularity is a more multifaceted concept than previously recognized. In particular, increased product modularity enhances reconfigurability of organizations more quickly than it allows firms to move activities out of hierarchy. The paper contributes to the emerging stream of research that focuses on the previously underappreciated costs of designing and maintaining a modular organization.

Original languageEnglish (US)
Pages (from-to)501-518
Number of pages18
JournalStrategic Management Journal
Volume27
Issue number6
DOIs
StatePublished - Jun 1 2006

Keywords

  • Buyer-supplier relationships
  • Knowledge-based theory of the firm
  • Modularity
  • Transaction cost economics: management of innovation

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management

Fingerprint Dive into the research topics of 'Do modular products lead to modular organizations?'. Together they form a unique fingerprint.

  • Cite this