Modularity: Implications for Imitation, Innovation, and Sustained Advantage

Modular design practices provide a lens on the link among product architecture, imitation, and the dynamic capabilities that sustain long-term performance. Looking at closed product systems, we propose that simplified links between design and performance outcomes in modular environments facilitate imitation. The same reduction in complexity drives development of dynamic capabilities. These take the form of more rapid and reliable search processes for incremental and radical innovations. The scope and timing of a firm's modular strategy influence the development of these capabilities, which are critical to sustainable modular performance advantages.

[1]  D. L. Parnas,et al.  On the criteria to be used in decomposing systems into modules , 1972, Software Pioneers.

[2]  Stefan H. Thomke,et al.  Asset accumulation, interdependence and technological change: evidence from pharmaceutical drug discovery , 2002 .

[3]  Steven D. Eppinger,et al.  Integration analysis of product decompositions , 1994 .

[4]  J. Barney.  Looking inside for competitive advantage , 1995 .

[5]  K. Eisenhardt,et al.  Competing on the Edge: Strategy as Structured Chaos , 1998 .

[6]  Daniel A. Levinthal,et al.  Exploration and Exploitation in Organizational Learning , 2007 .

[7]  B. Chakravarthy,et al.  The persistence of knowledge‐based advantage: an empirical test for product performance and technological knowledge , 2002 .

[8]  Morten T. Hansen,et al.  The Search-Transfer Problem: The Role of Weak Ties in Sharing Knowledge across Organization Subunits , 1999 .

[9]  E. Hilgard,et al.  Theories of Learning , 1981 .

[10]  R. V. Hoek.  Clockspeed: Winning Industry Control in the Age of Temporary Advantage , 2000 .

[11]  M. Hannan,et al.  Structural Inertia and Organizational Change , 1984 .

[12]  Ron Sanchez,et al.  Modular Architectures in the Marketing Process , 1999 .

[13]  S. Winter,et al.  An evolutionary theory of economic change , 1983 .

[14]  Kim B. Clark,et al.  Sun Wars: Competition within a Modular Cluster , 1997 .

[15]  R. Langlois.  Modularity in technology and organization , 2002 .

[16]  John K. Gershenson,et al.  Product modularity: measures and design methods , 2004 .

[17]  K. Weick,et al.  Loosely Coupled Systems: A Reconceptualization , 1990 .

[18]  Marco Iansiti,et al.  From technological potential to product performance: an empirical analysis , 1997 .

[19]  野中 郁次郎,et al.  The Knowledge-Creating Company: How , 1995 .

[20]  Kathleen M. Eisenhardt,et al.  DYNAMIC CAPABILITIES, WHAT ARE THEY? , 2000 .

[21]  Walter G. Vincenti,et al.  What Engineers Know and How They Know It: Analytical Studies from Aeronautical History. , 1992 .

[22]  Mitchell M. Tseng,et al.  Understanding product family for mass customization by developing commonality indices , 2000 .

[23]  Marco Iansiti,et al.  Technological Evolution, System Architecture and the Obsolescence of Firm Capabilities , 1995 .

[24]  Clayton M. Christensen.  The innovator's challenge : understanding the influence of market environment on processes of technology development in the rigid disk drive industry , 1992 .

[25]  HERBERT A. SIMON,et al.  The Architecture of Complexity , 1991 .

[26]  Stuart A. Kauffman,et al.  The origins of order , 1993 .

[27]  K. Pavitt.  Technologies, Products and Organization in the Innovating Firm: What Adam Smith Tells Us and Joseph Schumpeter Doesn't , 1998 .

[28]  Akira Takeishi,et al.  Special Issue: Knowledge, Knowing, and Organizations: Knowledge Partitioning in the Interfirm Division of Labor: The Case of Automotive Product Development , 2002, Organ. Sci..

[29]  Matthias Holweg,et al.  Linking Product Variety to Order-Fulfillment Strategies , 2004, Interfaces.

[30]  D. Teece.  Knowledge and Competence as Strategic Assets , 2004 .

[31]  Kathleen M. Eisenhardt,et al.  Architectural Innovation and Modular Corporate Forms , 2001 .

[32]  S. Brusoni,et al.  Unpacking the Black Box of Modularity: Technologies, Products and Organizations , 2001 .

[33]  Clayton M. Christensen,et al.  Strategies for Survival in Fast-Changing Industries , 1998 .

[34]  Marc H. Meyer,et al.  Metrics for Managing Research and Development in the Context of the Product Family , 1997 .

[35]  Nalin Kulatilaka,et al.  Options Thinking and Platform Investments: Investing in Opportunity , 1994 .

[36]  Melissa A. Schilling.  Toward a General Modular Systems Theory and Its Application to Interfirm Product Modularity , 2000 .

[37]  S. Wheelwright,et al.  The interaction of design hierarchies and market concepts in technological evolution * , 2003 .

[38]  G. Hoetker.  Do Modular Products Lead to Modular Organizations , 2006 .

[39]  J. March.  Exploration and exploitation in organizational learning , 1991, STUDI ORGANIZZATIVI.

[40]  S. Sanderson,et al.  Managing product families: The case of the Sony Walkman , 1995 .

[41]  Akira Takeishi,et al.  Modularization in the Auto Industry: Interlinked Multiple Hierarchies of Product, Production, and Supplier Systems , 2001 .

[42]  Jan W. Rivkin.  Imitation of Complex Strategies , 2000 .

[43]  D. Gregori,et al.  Inside the Black Box: Technology and Economics , 1984 .

[44]  Raghu Garud,et al.  Technological innovation: Technological choices and the inevitability of errors , 1997 .

[45]  B. Kogut,et al.  Knowledge of the Firm, Combinative Capabilities, and the Replication of Technology , 1992 .

[46]  John Paul Macduffie,et al.  The Adoption of High‐Involvement Work Practices , 1996 .

[47]  Kai Yang,et al.  The components of complexity in engineering design , 1999 .

[48]  Kathleen M. Eisenhardt,et al.  Has Strategy Changed , 2002 .

[49]  Ron Sanchez,et al.  Modularity, flexibility, and knowledge management in product and organization design , 1996 .

[50]  Daniel A. Levinthal,et al.  ABSORPTIVE CAPACITY: A NEW PERSPECTIVE ON LEARNING AND INNOVATION , 1990 .

[51]  Karl T. Ulrich,et al.  Product Design and Development , 1995 .

[52]  Mari Sako,et al.  Modules in Design , Production and Use : Implications for the Global Automotive Industry 1 , 1999 .

[53]  Kim B. Clark,et al.  Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of , 1990 .

[54]  S. Thomke,et al.  Agile Product Development: Managing Development Flexibility in Uncertain Environments , 1998 .

[55]  R. Henderson.  Of life cycles real and imaginary : the unexpectedly long old age of optical lithography , 1995 .

[56]  Raymond J. Bandlow.  Theories of Learning, 4th Edition. By Ernest R. Hilgard and Gordon H. Bower. Englewood Cliffs, N.J.: Prentice-Hall, Inc., 1975 , 1976 .

[57]  John Roberts,et al.  Uncertain Imitability : An Analysis of Interfirm Differences in Efficiency under Competition , 2007 .

[58]  S. Winter,et al.  Appropriating the Returns from Industrial Research and Development , 1987 .

[59]  Karel Cool,et al.  Asset stock accumulation and sustainability of competitive advantage , 1989 .

[60]  Thomas M. Smith,et al.  A History of Mechanical Inventions , 1961, Nature.

[61]  James M. Utterback,et al.  Mastering the Dynamics of Innovation: How Companies Can Seize Opportunities in the Face of Technological Change , 1994 .

[62]  Anurag Sharma.  Professional as Agent: Knowledge Asymmetry in Agency Exchange , 1997 .

[63]  Melissa A. Schilling,et al.  The Use of Modular Organizational Forms: An Industry-Level Analysis , 2001 .

[64]  Jan W. Rivkin,et al.  Complexity, Networks and Knowledge Flow , 2002 .

[65]  M. Jelinek.  Technology, Organizations, and Contingency , 1977 .

[66]  S. McGaughey,et al.  Strategic Interventions in Intellectual Asset Flows , 2002 .

[67]  Rachel Laudan,et al.  Cognitive Change in Technology and Science , 1984 .

[68]  K. Eisenhardt.  Agency Theory: An Assessment and Review , 1989 .

[69]  Daniel A. Levinthal,et al.  Landscape Design: Designing for Local Action in Complex Worlds , 1999 .

[70]  R. Langlois,et al.  Networks and innovation in a modular system: Lessons from the microcomputer and stereo component industries , 1992 .

[71]  John K. Gershenson,et al.  Product modularity: Definitions and benefits , 2003 .

[72]  Nam P. Suh.  Development of the science base for the manufacturing field through the axiomatic approach , 1984 .

[73]  Daniel A. Levinthal.  Adaptation on rugged landscapes , 1997 .

[74]  Carliss Y. Baldwin,et al.  Managing in an age of modularity. , 1997, Harvard business review.

[75]  R. Gulati,et al.  The dynamics of learning alliances: competition, cooperation, and relative scope , 1998 .

[76]  Araújo,et al.  An Evolutionary theory of economic change , 1983 .

[77]  R. Garud,et al.  Technological and Organizational Designs for Realizing Economies of Substitution , 1997 .

[78]  L. Argote.  Organizational Learning: Creating, Retaining and Transferring Knowledge , 1999 .

[79]  R. Sanchez.  Strategic flexibility in product competition , 1995 .

[80]  Kim B. Clark,et al.  Design Rules: The Power of Modularity , 2000 .

[81]  Kim B. Clark,et al.  Sun Wars: Competition within a Modular Cluster, 1985-1990 , 2003 .

[82]  Stefan H. Thomke,et al.  The Role of Flexibility in the Development of New Products , 1997 .

[83]  Melissa M. Appleyard,et al.  HOW DOES KNOWLEDGE FLOW? INTERFIRM PATTERNS IN THE SEMICONDUCTOR INDUSTRY , 1996 .

[84]  K. Clark,et al.  Integration and Dynamic Capability: Evidence from Product Development in Automobiles and Mainframe Computers , 1994 .

[85]  M. Polanyi.  Chapter 7 – The Tacit Dimension , 1997 .

[86]  Marc H. Meyer,et al.  The power of product platforms : building value and cost leadership , 1997 .

[87]  E. Mansfield,et al.  Imitation Costs and Patents: An Empirical Study , 1981 .

[88]  D. Teece,et al.  DYNAMIC CAPABILITIES AND STRATEGIC MANAGEMENT , 1997 .

[89]  Daniel A. Levinthal,et al.  Modularity and Innovation in Complex Systems , 2002, Manag. Sci..

[90]  Peter Galvin,et al.  MODULARITY ON INDUSTRY STRUCTURE: THE CASE OF THE WORLD THE EFFECT OF PRODUCT BICYCLE INDUSTRY , 2001 .

[91]  Paul M. Vaaler,et al.  Same as it Ever Was: The Search for Evidence of Increasing Hypercompetition , 2003 .

[92]  Christopher Alexander.  Notes on the Synthesis of Form , 1964 .

[93]  Karl T. Ulrich,et al.  Fundamentals of Product Modularity , 1994 .