Ron Sanchez
Joseph Mahoney
Strategic Management Journal, 1996
A Paper Summary
By
Amit Darekar
Modularity
Product design
Organization design
Flow of discussion
Simon’s(1962) notion of “nearly decomposable”
systems
Investigate modularity in product and organization
designs
Modular product design and new knowledge
management strategies
A system in which interactions among subsystems are
weak – Simon(1962)
Tasks within multidivisional firm are intentionally
designed to require low levels of coordination
 Quasi-independent divisions which work as loosely coupled
subsystems (Weick, 1976)
Environmental disturbances can be localized
This paper extends the logic to product design which
lead organizations which are structurally decomposed
Modularity –
A special form of design
Intentionally creates loose
coupling between component
designs
Standardized component
interface
How product designing
works?
Component 3
Component 1
Product
Architecture
Component 2
Methodology
Traditional designing
Methodology of constrained optimization
Highly integrated product designs
Requires intensive managerial coordination
Alternative designing
Intentionally creates loosely coupled component designs
Standardized component interfaces
Effective coordination of development process with less
managerial intervention
Modular product architecture
Uses standardized interfaces between components to
create flexible product architecture
Allows “substitution” of components without having to
redesign other components
Greater ability to “mix-and-match” that can lead to ease
of large number of product variations
Strategic flexibility – enable firm to respond quickly to
changing markets and technologies
Standardized component interfaces enable coordination
of loosely coupled organization structure linking
geographically dispersed component developers
Products
Form of modular product design
Aircrafts
Common wing, nose & tail
component
Automobiles
Engine components, interior parts
Consumer Electronics
Circuit boards,
Household Appliances
Modules to build up scaled products,
such as dish washers
Personal Computers
Dell
Software
Modules of codes
Test Instruments
Philips
Power Tools
Usage of common components
Modular product architecture allows processes to
be partitioned into tasks
-> can be done autonomously and concurrently by a
loosely coupled structure of development organizations
Modes of learning in product creation processes
Moderate
Moderate
Significant
Learning @ Component
Interactions and Configurations
Learning @ Component Functions and Designs
Significant
Incremental Learning at the
component level
Modular learning at the
component level
Architectural Learning
Radical Learning at
Architectural and Component
levels
Traditional sequential development process
• Information Structure is incomplete
• Require managerial adjudication
• Desired o/p can’t be fully specified in the • Hence tightly coupled organization
beginning
structure
Overlapping problem solving process
• Possible greater sharing of current info
• Has an evolving info structure
• Improves information flow, allowing some • Requires intensive managerial coordination
inter-related component development to
for incompletely specified tasks
proceed more quickly
Modular Product Design Process
• Creates complete info structure
• A firm must have advanced “Architectural
Knowledge”
• Improved component level learning
Modular Product Design Process
Creates a complete information structure – firm
must have advanced architectural knowledge
Improved component-level learning
Improved architectural-level learning
Using modular product architecture as mechanisms
for coordinating organizational learning
The shifting focus of knowledge management in
modular product development
This paper suggests that modular product architecture creates Flexible product designs
Enables the design of loosely coupled, flexible, “Modular” organization
structures
Reduces need for exercise of managerial authority
Gives greater flexibility to undertake large number of projects
While firms may develop specialized knowledge @ strategically
imp modular components, the authors expect firms to develop
fewer components
Knowledge management may result in increasingly dynamic
product markets
The paper expects to extend the concept of modularity to
designing marketing, distribution, and other processes as well to
help attain flexibilities