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c Academy of Management Review 2000, Vol. 25, No. 2, 312-334.
TOWARDA GENERAL MODULARSYSTEMS THEORYAND ITS APPLICATION TO INTERFIRM PRODUCTMODULARITY MELISSA SCHILLING A. Boston University
Many systems migrate toward increasing or decreasing modularity, yet no explicit causal models exist to explain this process. In this article I build a general theory of modular systems, drawing on systems research from many disciplines, and then use this general theory to derive a model of interfirm product modularity, including testable research propositions. The product model provides a valuable tool for predicting technological trajectories, and it demonstrates how the general theory can be applied to specific systems.
Modularity is a general systems concept: it is a continuum describing the degree to which a system's components can be separated and recombined, and it refers both to the tightness of coupling between components and the degree to which the "rules" of the system architecture enable (or prohibit) the mixing and matching of components. Since all systems are characterized by some degree of coupling (whether loose or tight) between components, and very few systems have components that are completely inseparable and cannot be recombined, almost all systems are, to some degree, modular. Many systems migrate toward increasing modularity. Systems that were originally tightly integrated may be disaggregated into loosely coupled components that may be mixed and matched, allowing much greater flexibility in end configurations. For instance, personal computers originally were introduced as all-in-one packages (such as Intel's MCS-4, the Kenback-1, the Apple II, or the Commodore PET) but rapidly evolved into modular systems enabling the mixing and matching of components from different vendors. Publishers also have embraced modularity by utilizing recent information technology advances to enable instructors to assemble their own textbooks from book chapters, articles,
I gratefully acknowledge the advice and assistance of Carliss Baldwin, Richard Langlois, N. Venkatraman, Shawn Berman, Peter Arnold, Henry Chesebrough, Andy Hoffman, Jonathan Hibbard, Dorothy Paun, P. R. Balasubramanian, and John Henderson, and I acknowledge especially the comments of several anonymous reviewers for their generous help and support. 312
cases, or their own materials. Even large homeappliance manufacturers now offer their products in modular configurations-for example, some stoves now offer customers the ability to remove the burners and plug in other cooking devices, such as barbecue grills and pancake griddles. Increasing modularity is not, however, limited to products: scholars have noted increasing modularity in many different kinds of systems. For example, in recent research scholars have examined the disaggregation of many large, integrated, hierarchical organizations into loosely coupled production arrangements, such as contract manufacturing, alternative work...