The Products Are Modular Organized Modular Mechanism

With the rapid development of IT and network economy, the concept of modularity has become one of hot topics in economics and management nowadays. Modularity consists of product modularity and organizational modularity. However, the relationship between product and organizational modularity is still controversial due to little empirical analysis. In this research I select one aspect of the relationship between product modularity and organizational modularity, and study how product modularity influences organizational modularity.In this article, I investigate the actual situation of domestic manufacturing industry, sort out domestic and foreign related literature, interview several manufacturing company, and finally build a causal model. In the model, I divide the product modularity into product design modularity and the product manufacturing modularity based on product life-cycle theory, and divide the organizational modularity into internal structure modularity and to external relation modularity based on boundary of firm theory. Then I inspect how the product design modularity and the product manufacturing modularity affect organizational internal structure modularity according to organization theory, how the product design modularity and the product manufacturing modularity affect organizational external relation modularity according to transaction cost of economics theory, and how structural inertia restrains the relationship between product and organizational modularity according to surveying. Furthermore, I find out the main characteristic of product modularity is the mapping from functional elements to physical components, and the main characteristic of organizational modularity is loosely coupled principle. In terms of these characteristics I design questionnaire, issue it and collect feedback. Then I use structural equation modeling to analyze the questionnaire and get the result.After the empirical study, I conclude that increased product design modularity and product manufacturing modularity is associated with advantageous increase in organizational internal structure modularity and external relation modularity, and increased structural inertia restrains the formation of organizational modularity. However, the inhibiting effect of structural inertia on the mechanism that product modularity influences organizational modularity is not significant. This conclusion enriches the modular theoretical knowledge, contributes to the emerging stream of research that focuses on the general modular model and empirical study of the mechanism from product modularity to organizational modularity, and provides manufacturing firms with theoretic instruction which is in the advancement of organizational modularity process.