The Concept of Modularity in Management Studies: A Literature Review

Abstract

During the last decade, modularity has attracted the attention of numerous management scholars, and both theoretical and empirical studies on this topic have flourished. However, this broad‐based appeal has generated some controversies and ambiguities on how modularity should be defined, measured and used in managerially meaningful ways. This paper reviews the concept of modularity as a design principle of complex systems in management studies. Applying this criterion, 125 studies were selected and classified, grouped according to their prevalent unit of analysis: products, production systems and organizations. Although all these studies are based on Simon's seminal work on the hierarchical and nearly decomposable nature of complex systems (Simon, H.A. (1962). The architecture of complexity. Proceedings of the American Philosophical Society, 106, 467–482), this paper shows that they offer different definitions, measures and applications of the modularity concept. This review reveals the implicit structure of meanings underlying this literature and emphasizes that ambiguity in definitions and measures impedes rigorous empirical studies capable of understanding the relationship between modularity in product, in production and in organization design. Cautions and directions for future research are discussed.