Product Modularization and Organizational Coordination

Paper in proceeding, 2003

Existing literature on product modularization proposes that by standardizing module interfaces, it is possible to avoid the exercise of overt managerial authority in coordinating the development process. We test this assumption by investigating two product modules in a car development project. Despite having standardized and simple interfaces to other modules, managerial involvement in coordination was still needed. Some problems could not be solved by mutual adjustment. The conclusion is that dividing a product into modules and modularizing the development organization, does not do away with the need for a managerial hierarchy making important decisions, as suggested in the literature.