Organising for modularity in dynamic markets
Journal article, 2012

Facing constantly increasing product variety and changing customer demands, many companies have adopted a product modularisation strategy to increase strategic flexibility. Despite the dominant view that product modularisation directly increases strategic flexibility, it is argued here that the causal link between product modularisation and strategic flexibility is mediated by specific complementary organisational factors which enable firms with a modular product structure to develop strategic flexibility. Moreover, the interrelationship between product architecture and organisational structure is regarded as reciprocal. That is, product architecture and organisational structure are considered to co-evolve and mutually influence each other. The purpose of this paper is to elucidate how firms applying a modularisation strategy organise in order to increase the strategic flexibility, and how the organisational structure is interrelated with the product architecture, especially the ability to maintain a modular product architecture over time. Two International automotive companies, both of them implemented a modularisation strategy in the mid-1990s, have been studied. From the cases it can be concluded that the alignment of product and organisational architecture, decision-making structures, and the management of knowledge affect a firm's ability to evolve its products and maintain a modular product structure over time.

market dynamics

Modularisation

management of knowledge

product architecture

decision-making

modularity

organising

strategic flexibility

Author

Maximilian Pasche

Chalmers, Technology Management and Economics, Supply and Operations Management

Magnus Persson

Chalmers, Technology Management and Economics, Supply and Operations Management

International Journal of Innovation Management

1363-9196 (ISSN)

Vol. 16 2 Art. no. 1250010-

Subject Categories

Other Engineering and Technologies not elsewhere specified

DOI

10.1142/S1363919611003507

More information

Created

10/6/2017