Investigating modular organizations

This paper explores a new organizational form—modular organization—through a case-study approach. The aim is to isolate the specific properties that set this form apart from other known organizational forms. The case studies examined focus on the manufacturing process of small, medium and large companies in different industries, and provide a clear picture of modular organization. The analysis shows that modular organizations are an innovation per se and not the mere outcome of modular products. Modular organizations leverage decomposition by employing small units within a larger organization. Each unit is responsible for a specific domain, it is quasi-independent and makes autonomous decisions on various business issues. Modular organizations deal with suppliers directly, and are characterized by a flat structure. Companies based on modular organization can improve their efficiency in the high-tech and mature markets, and fully exploit their resources.