Modularity, strategic flexibility, and firm performance: a study of the home appliance industry

TLDR

Modular product and process architectures are theorized to enable strategic flexibility. The study develops an integrative model of modularity’s antecedents, drivers, and outcomes. The model was tested with structural equation modeling on survey data from U.S. and U.K. home appliance managers.

Abstract

Abstract Recent theorizing has proposed that modular product and process architectures are key enablers of strategic flexibility. We formulated an integrative conceptual model encompassing antecedents, contributing factors, and outcomes of modularity. We then tested this model on data from managers in U.S. and U.K. home appliance companies using structural equations modeling. The results indicate a positive relationship between modular product architectures and performance, with product model variety as a mediating variable. The results also highlight linkages between perceptions of market context and the use of modular products architectures, and between complementary organizational capabilities and firm performance. Copyright © 2002 John Wiley & Sons, Ltd.