Modularity and Innovation in Complex Systems

The problem of designing, coordinating, and managing complex systems has been central to the management and organizations literature. Recent writings have tended to offer modularity as, at least, a partial solution to this design problem. However, little attention has been paid to the problem of identifying what constitutes an appropriate modularization of a complex system. We develop a formal simulation model that allows us to carefully examine the dynamics of innovation and performance in complex systems. The model points to the trade-off between the destabilizing effects of overly refined modularization and the modest levels of search and a premature fixation on inferior designs that can result from excessive levels of integration. The analysis highlights an asymmetry in this trade-off, with excessively refined modules leading to cycling behavior and a lack of performance improvement. We discuss the implications of these arguments for product and organization design.

From Business Model to Business Modelling: Modularity and Manipulation

The concept of modularity has gained considerable traction in technology studies as a way to conceive, describe and innovate complex systems, such as product design or organizational structures. In the recent literature, technological modularity has often been intertwined with business model innovation, and scholarship has started investigating how modularity in technology affects changes in business models, both at the cognitive and activity system levels. Yet we still lack a theoretical definition of what modularity is in the business model domain. Business model innovation also encompasses different possibilities of modeling businesses, which are not clearly understood nor classified. We ask when, how and if modularity theory can be extended to business models in order to enable effective and efficient modeling. We distinguish theoretically between modularity for technology and for business models, and investigate the key processes of modularization and manipulation. We introduce the basic operations of business modeling via modular operators adapted from the technological modularity domain, using iconic examples to develop an analogical reasoning between modularity in technology and in business models. Finally, we discuss opportunities for using modularity theory to foster the understanding of business models and modeling, and develop a challenging research agenda for future investigations

The imperfect hiding : some introductory concepts and preliminary issues on modularity

In this work we present a critical assessment of some problems and open questions on the debated notion of modularity. Modularity is greatly in fashion nowadays, being often proposed as the new approach to complex artefact production that enables to combine fast innovation pace, enhanced product variety and reduced need for co-ordination. In line with recent critical assessments of the managerial literature on modularity, we sustain that modularity is only one among several arrangements to cope with the complexity inherent in most high-technology artefact production, and by no means the best one. We first discuss relations between modularity and the broader (and much older within economics) notion of division of labour. Then we sustain that a modular approach to labour division aimed at eliminating technological interdependencies between components or phases of a complex production process may have, as a by-product, the creation of other types of interdependencies which may subsequently result in inefficiencies of various types. Hence, the choice of a modular design strategy implies the resolution of various tradeoffs. Depending on how such tradeoffs are solved, different organisational arrangements may be created to cope with ‘residual’ interdependencies. Hence, there is no need to postulate a perfect isomorphism, as some recent literature has proposed, between modularity at the product level and modularity at the organisational level

Mirroring or misting: On the role of product architecture, product complexity, and the rate of product component change

This paper contributes to the literature on the within-firm and across-firm mirroring hypothesis – the assumed architectural mapping between firms’ strategic choices of product architecture and firm architecture, and between firms’ architectural choices and the industry structures that emerge. Empirical evidence is both limited and mixed and there is evidently a need for a more nuanced theory that embeds not only whether the mirroring hypothesis holds, but under what product architecture and component-level conditions it may or may not hold. We invoke an industrial economics perspective to develop a stylised product architecture typology and hypothesise how the combined effects of product architecture type, product complexity and the rate of product component change may be associated with phases of mirroring or misting. Our framework helps to reconcile much existing mixed evidence and provides the foundation for further empirical research

A review of modular strategies and architecture within manufacturing operations

This paper reviews existing modularity and modularization literature within manufacturing operations. Its purpose is to examine the tools, techniques, and concepts relating to modular production, to draw together key issues currently dominating the literature, to assess managerial implications associated with the emerging modular paradigm, and to present an agenda for future research directions. The review is based on journal papers included in the ABI/Inform electronic database and other noteworthy research published as part of significant research programmes. The research methodology concerns reviewing existing literature to identify key modular concepts, to determine modular developments, and to present a review of significant contributions to the field. The findings indicate that the modular paradigm is being adopted in a number of manufacturing organizations. As a result a range of conceptual tools, techniques, and frameworks has emerged and the field of modular enquiry is in the process of codifying the modular lexicon and developing appropriate modular strategies commensurate with the needs of manufacturers. Modular strategies and modular architecture were identified as two key issues currently dominating the modular landscape. Based on this review, the present authors suggest that future research areas need to focus on the development and subsequent standardization of interface protocols, cross-brand module use, supply chain power, transparency, and trust. This is the first review of the modular landscape and as such provides insights into, first, the development of modularization and, second, issues relating to designing modular products and modular supply chains

Limits to Modularity: A Review of the Literature and Evidence from Chip Design

This working paper has been prepared as part of the East-West Center's research project on Globalization of Knowledge Work: Why is Chip Design Moving to Asia. In this paper, Dieter assesses what we know about the limits to modularity and their impact on firm organization and industry structure. He focuses on evidence form chip design, drawing on interview on 2002 and 2003 with a sample of 60 companies and 15 research institutions that are involved in chip design in the US, Taiwan, Korea, China and Malaysia. It is summarized "stylized" propositions of the modularity literature that are well-established, as well as predictions that are controversial. In addition, important limits to modularity and relevant management responses were reviewed.

Communities, Knowledge Creation, and Information Diffusion

In this paper, we examine how patterns of scientific collaboration contribute to knowledge creation. Recent studies have shown that scientists can benefit from their position within collaborative networks by being able to receive more information of better quality in a timely fashion, and by presiding over communication between collaborators. Here we focus on the tendency of scientists to cluster into tightly-knit communities, and discuss the implications of this tendency for scientific performance. We begin by reviewing a new method for finding communities, and we then assess its benefits in terms of computation time and accuracy. While communities often serve as a taxonomic scheme to map knowledge domains, they also affect how successfully scientists engage in the creation of new knowledge. By drawing on the longstanding debate on the relative benefits of social cohesion and brokerage, we discuss the conditions that facilitate collaborations among scientists within or across communities. We show that successful scientific production occurs within communities when scientists have cohesive collaborations with others from the same knowledge domain, and across communities when scientists intermediate among otherwise disconnected collaborators from different knowledge domains. We also discuss the implications of communities for information diffusion, and show how traditional epidemiological approaches need to be refined to take knowledge heterogeneity into account and preserve the system's ability to promote creative processes of novel recombinations of idea