9 Modularity and Integrality Flashcards
What is modularity in product design?
Modularity is an approach where a complex product is divided into smaller, independent subsystems or modules. Visible design rules define how these modules fit together, while hidden design parameters within each module can be changed without affecting the others. This promotes flexibility, rapid innovation, and easier collaboration among multiple designers or companies.
How does modularity affect competition and innovation?
By enabling independent teams to work on separate modules, modularity dramatically increases experimentation and innovation speed. Many firms can offer specialized modules, intensifying competition and fostering continuous improvements. This leads to faster product development cycles and more frequent product enhancements.
What strategic choices does modularity create for companies?
Companies can adopt one of two main strategies in modular markets:
- Architects: Control the visible design rules and overall product architecture, influencing how modules connect.
- Module Makers: Specialize in producing specific components that fit into someone else’s architecture.
Both strategies require deep technical knowledge and the ability to navigate fast-paced, uncertain environments.
How must managers adapt to thrive in a modular environment?
Managers need a deep understanding of product technologies and market developments. They must lead flexible, decentralized teams while providing clear frameworks for coordination. Successful leadership in modular systems involves guiding innovation, managing a portfolio of design options, quickly responding to shifts in the market, and maintaining coherent, overarching design rules.
How does “architectural innovation” differ from radical and incremental innovation?
Architectural innovation reconfigures the way existing components of a product are linked together, without changing the core design concepts. Unlike radical innovation, it doesn’t introduce fundamentally new technologies; unlike incremental innovation, it significantly alters the product’s architecture and interactions among components.
Why can architectural innovation be so challenging for established firms?
Established firms often have their architectural knowledge embedded in their organization’s communication channels, information filters, and problem-solving routines. Architectural innovation undermines this existing architectural knowledge, making it difficult for firms to recognize the new challenges, adapt their internal structures, and effectively learn the new architectural relationships.
What are the two types of product knowledge required for successful product development according to Henderson and Clark?
Successful product development requires (1) component knowledge – understanding the core design concepts and how they are implemented in each component, and (2) architectural knowledge – understanding how those components integrate and interact to form a coherent whole.
How does a dominant design influence the way organizations learn and store architectural knowledge?
Once a dominant design emerges, architectural knowledge stabilizes and tends to be embedded into organizational routines, channels, and filters. This implicit embedding makes it efficient for incremental improvements but can hinder adaptation when architectural innovations arise.
Why might architectural innovation sometimes appear minor but lead to significant competitive shifts in an industry?
Although architectural innovations use existing component technologies, they alter the relationships and interfaces between components. This subtle shift can render established firms’ deeply ingrained architectural knowledge obsolete and give new entrants or more adaptable competitors a significant advantage
What were some key findings from the semiconductor photolithographic alignment equipment industry study by Henderson and Clark?
In that industry, several waves of architectural innovations repeatedly overturned market leadership. Incumbents struggled to adapt to changes in component interactions even though core technologies remained familiar, demonstrating how architectural innovations can cause significant upheaval and the rise of new leaders.
How can an organization mitigate the risks posed by architectural innovation?
Organizations can actively invest in flexible structures, encourage cross-functional communication, periodically reassess their architectural assumptions, and avoid overly rigid reliance on established communication channels and filters. Essentially, they need to maintain a learning-oriented culture that can detect and adapt to new component interdependencies.
Please mark as True or False the following statements about “Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of Established Firms” (Henderson and Clark, 1990)
Incremental innovation changes the core design concepts of a technology
Radical innovation establishes a new dominant design
Modular innovation leaves both the linkages between components and the core design concepts of a technology unchanged
Architectural innovation can be triggered by a change in a component (e.g., size) that creates new linkages in an existing product
Incremental innovation changes the core design concepts of a technology
False. Incremental innovation refines or improves upon existing design concepts and linkages without fundamentally altering either.
Radical innovation establishes a new dominant design
True. Radical innovation redefines both core concepts and the linkages, often leading to a new dominant design.
Modular innovation leaves both the linkages between components and the core design concepts of a technology unchanged
False. In modular innovation, the core concepts of a component are changed, but the linkages (the way components interact) remain largely the same.
Architectural innovation can be triggered by a change in a component (e.g., size) that creates new linkages in an existing product
True. Architectural innovation involves reconfiguring the linkages between existing components—sometimes prompted by a small change to a component that cascades into new relationships among components.
Please mark as True or False the following statements about “Managing in the Age of Modularity” (Baldwin and Clark, 1997)
Modularity enables companies to handle complex technologies by breaking up products into subsystems
Once a product is modularized, it cannot be reverted to an integral product
Modularity in use allows consumers to mix and match elements to come up with a product that suits their needs
Modularity allows for different companies to work independently and boost the rate of innovation of a product
Modularity enables companies to handle complex technologies by breaking up products into subsystems
True. By decomposing a product into smaller, self-contained modules, companies can manage complexity more effectively and focus on designing or improving each subsystem.
Once a product is modularized, it cannot be reverted to an integral product
False. Modularity is a design choice rather than a one-way path. Companies can (and sometimes do) revert to more integral designs if they see strategic or performance benefits in doing so.
Modularity in use allows consumers to mix and match elements to come up with a product that suits their needs
True. When products are designed in a modular way, consumers can customize by selecting different modules—much like building blocks—to tailor the product to their preferences.
Modularity allows for different companies to work independently and boost the rate of innovation of a product
True. Because each module can be developed separately, multiple firms can innovate on different parts of the product in parallel, which often accelerates overall innovation.
How do Henderson & Clark (1990) describe architectural innovation? And why do established firms
find it hard to cope with
Description: a change in the linkages between components, rather than the components themselves
Challenge: because the product architecture defines the organization’s (information) structure, which would have to change too
In class, we discussed a number of downsides to modularity. Name three, and give a real-world
example of each
Possible answers (without the examples):
- Very costly architecture to put in place (Needs to achieve a thorough understanding of the system)
- Trade off at strategic level (Performance vs. variety) → modular products allow for variety, but generally perform worse as a
package than the integral product would - Hold up problems and TC issues → if you let other firms provide modules of your products, they can leverage their power in the
supply chain - Learning trade off (Speed of search vs. breadth of search) → in modular systems, you can/should explore more broadly (e.g.
alternatives for every module)
