The Imperfect Hiding : Some Introductory Concepts and Preliminary Issues on Modularity

In this work we present a critical assessment of some problems and open questions on the debated notion of modularity. Modularity is greatly in fashion nowadays, being often proposed as the new approach to complex artefact production that enables to combine fast innovation pace, enhanced product variety and reduced need for co-ordination. In line with recent critical assessments of the managerial literature on modularity, we sustain that modularity is only one among several arrangements to cope with the complexity inherent in most high-technology artefact production, and by no means the best one. We first discuss relations between modularity and the broader (and much older within economics) notion of division of labour. Then we sustain that a modular approach to labour division aimed at eliminating technological interdependencies between components or phases of a complex production process may have, as a by-product, the creation of other types of interdependencies which may subsequently result in inefficiencies of various types. Hence, the choice of a modular design strategy implies the resolution of various tradeoffs. Depending on how such tradeoffs are solved, different organisational arrangements may be created to cope with ‘residual’ interdependencies. Hence, there is no need to postulate a perfect isomorphism, as some recent literature has proposed, between modularity at the product level and modularity at the organisational level. ♣ Financial support from the Italian Ministry of University and Scientific and Technological Research (project COFIN 99) is gratefully acknowledged.