Research On The Mechanism Of The Modular Organization's Formation, Evolution And Performance

Along with the development of information and computer manufacturing technology since 90s of last century, the modular concept and method have been introduced to the production and management, becoming the revolutionary forces in promoting industrial restructuring and upgrading. With the modularization of product design and production process, modular orientation has emerged from the enterprise organizations, and then modular organization comes into being. Currently, modular organization has become a major production organization in the United States, Japan and other developed countries.The paper exerts neo-institutional economics, game theory and other analytical tools, basing on the economic theories and methods, combing relative management theory, and analyzes the formation and operation mechanism of modular organization.Based on the analysis of knowledge, the paper views modular organization as a set of professional knowledge association as the main line. Adopting of a revised Becker-Murphy model, it studies the endogenous evolution of modular organization. Furthermore, it compares the difference between the modular and division of labor through the creation of theoretical model on technology-system-division-evolution. The paper also studies the impact of modular on organizational evolution. The main content of modular organization is technological innovation based on knowledge. This paper studies influence of coupling relationship of modular organization's internal subjects on innovation incentives.Summary from the research:(a) As a form of division, modular organization is essentially different from traditional division of labor. Modular organization is a kind of knowledge integration machine to solve the contradiction between division of knowledge and division of tasks, through intensive internal exchanges and collaboration to make up for the division of personal knowledge with the overall mandate.(b)To be a technology as well as an institution, modular technology leads to a brand-new collaboration which is completely different from the former approach basing on knowledge sharing between organizations. From a technical aspect, modular technology promotes the growth of knowledge which lowers the internal knowledge correlation and coordinative costs because of division; from the institutional aspect, as a collaborative operation, modular technology reduces internal assessment costs and increases the efficiency of the transaction in the mean time. The application of modular technology allows the economy from division more than transaction cost, thereby contributing to the evolution of the division.(c) The intimate relationship between sub-module supplier and integrated company hinders the innovation of sub-module supplier. However, if there is pure market behavior without cooperation, it goes against the innovative incentives of sub-module suppliers in modular industry. Therefore, by the knowledge alliance with integrated corporation, the sub-module supplier in the modular industry increases both profits though a win-win conduct of loose cooperation. Accordingly, it stimulates the innovation of the sub-module suppliers. That's why the paper claims to create relative conditions to ensure the lasting of innovative cooperation between sub-module suppliers.