Research On Innovation Capabilities And Organization Performance For Modular Organization

Modularization is a research focus in recent years. There are two topics researchers widely concerned about, what are the factors caused modularization? and what are the consequences of modularization to firms? As for the first topic, three theories are widely discussed, product modularity determination theory, organization form evolution theory, and division of labor inducement theory. The logic starting point of product modularity determination theory is that product design and organization design has the uniformity, namely, the nature of product deconstructive structure leads to the deconstructive structure of organization. Implement of modular product can be realized only for enterprises with highly modular flexibility. So modular organization is the inevitable choice to those enterprises. From the perspective of evolution, Organization form evolution theory argues that enterprise has a self-adaption mechanism to internal and external environment. Enterprise must process more and more complex information, integration and application of internal knowledge resource prompt enterprise to adjust its structure form. Then knowledge can be widely spread and create value. The logic of division of labor inducement theory is that the length of roundabout production chain increase as division of labor evolution. Asymmetric distribution of technical knowledge and asymmetric distribution of the uncertainty of behavior is followed by the high cost of related technical knowledge and behavior information. Those Coordination costs can be reduced by knowledge of the institutions. Highly efficient coordination mechanism can be achieved through modularization. So modularization is the result of division of labor for enterprise internal knowledge.Existing literatures show some evidence for each of those three theories. This dissertation selects variables which influence the modularization of enterprise, then develop scales to measure these variables. This dissertation uses regression analysis to test the three viewpoints. Empirical results show that informationization level and demand diversification have significant influence on enterprise modularization level, and the influence of knowledge on enterprise modularization level is not significant. This dissertation cannot use Granger causality tests to check the causalities among these variables because the sample is a section data. These empirical results partially support product modularity determination theory and organization form evolution theory, but no evidence refuse division of labor inducement theory.As for the second topic, most of existing literatures claim that modularization influence the consequence of enterprise operation, yet lack of empirical evidence to support these conclusion. This dissertation designs scales to measure these variables, and evaluates the influence of modularization on the consequence of enterprise operation by means of regression analysis. The results shows that, enterprise innovation capability, product cost, market share and growth performance are significantly affected by enterprise modularization level, but enterprise modularization level has a positive influence on product cost, this is clearly contrary to previous expectations. This findings indicate that the cost of modularization is higher than the cost reduction due to modularization, which adds evidence to Baldwin&Clark’s and Masahi ko Aoki’argument on the cost of modularization. Finally, evidence of this dissertation shows there exist industry difference and types of companies difference of modularization level.