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Managing In The Modular Age: Architectures, Networks, and Organizations by Richard N. Langlois, Arun Kumaraswamy, Raghu Garud

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Chapter 11. MODULARITY, FLEXIBILITY, AND KNOWLEDGE MANAGEMENT IN PRODUCT AND ORGANIZATION DESIGN

Ron Sanchez and Joseph T. Mahoney

Introduction

Daft and Lewin identify the "modular organization" as a new paradigm that has as its premise "the need for flexible, learning organizations that continuously change and solve problems through interconnected coordinated self-organizing processes" (1993: i). This paper investigates approaches to managing knowledge in a firm's product-creation processes that facilitate specific forms of "coordinated self-organizing processes" capable of improving a firm's strategic flexibility to respond advantageously to a changing environment (Sanchez, 1993, 1994b, 1995). To do so, we investigate concepts of modularity in both product designs and organization designs.

We explain how advanced technological knowledge about component interactions can be used to fully specify and standardize the component interfaces that make up a modular product architecture, creating a nearly independent system (Simon, 1962) of "loosely coupled" components. We then suggest that just as some work may be coordinated by specifying standard operating procedures (Cyert and March, 1963) that govern processes directly, much work in product development may be coordinated by specifying standardized component interfaces that govern the outputs of component development processes. In essence, the standardized component interfaces in a modular product architecture provide a form of embedded ...

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