ORGANIZATIONAL MODULARITY: A LITERATURE REVIEW

Organizational modularity allows organizations to improve their reconfigurability, and thereby, to adapt to fast changing environmental conditions. Although, organizational modularity is frequently mentioned in the literature of organization theory, apart from product modularity, neither a common definition nor a measurement model exists for this concept. To address this issue, a comprehensive literature review on organizational modularity was conducted. Based on the results of this review and general principles of modular design, an operational definition of organizational modularity is proposed. With reference to the mirroring hypothesis, which aims to explain the correspondence between product architecture and organizational structure, the relationship between product modularity and organizational modularity is examined. Additionally, the models involving the measurement of organizational modularity, together with the pros and cons of organizational modularity are discussed. Finally, future research directions are suggested for the operationalization of organizational modularity concept.