Brokerage and balance: Creating an effective organizational interface for product modularization in multinational R&D

Abstract

Despite numerous studies on modularity, the modularization processes have received less attention. In the global context, product modularity can be leveraged to satisfy heterogeneous market requirements across countries with low costs. Through a longitudinal case study of HomeTech, we examined how multinational R&D created an effective organizational interface to facilitate recombination of its organizational units, and thus product modularization. We found that three elements of an organizational interface were established through a process composed of three phases in HomeTech R&D: regional concentration, establishing a module pool, and creating architecture leader posts. We also found that the three elements exerted the balancing effect and the brokerage effect so that the organizational interface was effective in facilitating recombination of organizational units. We contribute to the literature through showing how organizational modularity can affect product modularity within a firm. We also reveal the critical role of architecture leaders in product modularization. Finally, we enrich the organizational interface concept by highlighting the combination of elements.N