Authority in the Age of Modularity
AbstractThis paper builds upon on-going research into the organisational implications of 'modularity'. Advocates of modularity argue that the Invisible Hand of markets is reaching activities previously controlled through the Visible Hand of hierarchies. This paper argues that there are cognitive limits to the extent of division of labour: what kinds of problems firms solve, and how they solve them, set limits to the extent of division of labour, irrespective of the extent of the market. This paper analyses the cognitive limits to the division of labour relying on an in-depth case study of engineering design activities. On this basis, this paper explains why co-ordinating increasingly specialised bodies of knowledge, and increasingly distributed learning processes, requires the presence of knowledge integrating firms even in the presence of modular products. Such firms, relying on their wide in-house scientific and technological capabilities, have the 'authority' to identify, propose, and implement solutions to complex problems. In so doing, they co-ordinate networks of suppliers of both components and specialised competencies.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by SPRU - Science and Technology Policy Research, University of Sussex in its series SPRU Working Paper Series with number 101.
Length: 25 pages
Date of creation: 01 Jun 2003
Date of revision:
Contact details of provider:
Postal: Jubilee Building G08, Falmer, Brighton, BN1 9SL
Phone: +44 (0)1273 686758
Fax: +44 (0)1273 685865
Web page: http://www.sussex.ac.uk/spru
More information through EDIRC
modularity; division of labour limits; knowledge integrating firms;
Find related papers by JEL classification:
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-08-08 (All new papers)
- NEP-INO-2007-08-08 (Innovation)
- NEP-KNM-2007-08-08 (Knowledge Management & Knowledge Economy)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ashish Arora & Alfonso Gambardella & Enzo Rullani, 1997. "Division of Labour and the Locus of Inventive Activity," Journal of Management and Governance, Springer, vol. 1(1), pages 123-140, March.
- Anna Grandori, 1997. "Governance Structures, Coordination Mechanisms and Cognitive Models," Journal of Management and Governance, Springer, vol. 1(1), pages 29-47, March.
- Radner, Roy, 1992. "Hierarchy: The Economics of Management," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1382-415, September.
- Arora, Ashish & Gambardella, Alfonso, 1994. "The changing technology of technological change: general and abstract knowledge and the division of innovative labour," Research Policy, Elsevier, vol. 23(5), pages 523-532, September.
- Vermeulen, Ben & De Kok, Ton, 2013. "A value network development model and implications for innovation and production network management," MPRA Paper 51393, University Library of Munich, Germany.
- Andrea Prencipe, 2004. "Change, Coordination, and Capabilities," SPRU Working Paper Series 120, SPRU - Science and Technology Policy Research, University of Sussex.
- Virginia Acha & Lucia Cusmano, 2005. "Governance and co-ordination of distributed innovation processes: patterns of R&D co-operation in the upstream petroleum industry," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 14(1-2), pages 1-21.
- Bongo Adi & Kenneth Amaeshi & Suminori Tokunaga, 2005. "Rational Choice, Scientific Method and Social Scientism," Method and Hist of Econ Thought 0509001, EconWPA.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Russell Eke).
If references are entirely missing, you can add them using this form.