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Authority in the Age of Modularity

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Author Info
Stefano Brusoni () (SPRU, University of Sussex, CESPRI & CRORA, Bocconi University)

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Abstract

This 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.

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Publisher Info
Paper provided by University of Sussex, SPRU - Science and Technology Policy Research in its series SPRU Electronic Working Paper Series with number 101.

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Length: 25 pages
Date of creation: 01 Jun 2003
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Handle: RePEc:sru:ssewps:101

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Related research
Keywords: 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

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References listed on IDEAS
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.:
  1. 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. [Downloadable!] (restricted)
  2. Radner, Roy, 1992. "Hierarchy: The Economics of Management," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1382-415, September. [Downloadable!] (restricted)
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Cited by:
(explanations, 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.)

  1. Andrea Prencipe, 2004. "Change, Coordination, and Capabilities," SPRU Electronic Working Paper Series 120, University of Sussex, SPRU - Science and Technology Policy Research. [Downloadable!]
  2. 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 and Francis Journals, vol. 14(1-2), pages 1-21, January. [Downloadable!] (restricted)
  3. Bongo Adi & Kenneth Amaeshi & Suminori Tokunaga, 2005. "Rational Choice, Scientific Method and Social Scientism," Method and Hist of Econ Thought 0509001, EconWPA. [Downloadable!]
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