The Value and Costs of Modularity: A Problem‐Solving Perspective

12 Pages Posted: 22 Oct 2011

See all articles by Stefano Brusoni

Stefano Brusoni

Bocconi University - CESPRI

Luigi Marengo

Scuola Superiore Sant'Anna di Pisa - Laboratory of Economics and Management (LEM)

Andrea Prencipe

LUISS Guido Carli University

Marco Valente

University of L'Aquila - Faculty of Economics

Date Written: Summer 2007

Abstract

This paper discusses the issue of modularity from a problem‐solving perspective. Modularity is in fact a decomposition heuristic, through which a complex problem is decomposed into independent or quasi‐independent sub‐problems. By means of a model of problem decomposition, this paper studies the trade‐offs of modularity: on the one hand finer modules increase the speed of search, but on the other hand they usually determine lock‐in into sub‐optimal solutions. How to balance effectively this trade‐off depends upon the problem environment and in particular on its complexity and volatility: we show that in stationary and complex environments there exists an evolutionary advantage to over‐modularization, while in highly volatile environments, contrary to usual wisdom, modular search is inefficient in the long run. The empirical relevance of our findings is discussed especially with reference to the literature on systems integration.

Keywords: modularity, near‐decomposability, problem‐solving, design

Suggested Citation

Brusoni, Stefano and Marengo, Luigi and Prencipe, Andrea and Valente, Marco, The Value and Costs of Modularity: A Problem‐Solving Perspective (Summer 2007). European Management Review, Vol. 4, Issue 2, pp. 121-132, 2007, Available at SSRN: https://ssrn.com/abstract=1947724 or http://dx.doi.org/10.1057/palgrave.emr.1500079

Stefano Brusoni (Contact Author)

Bocconi University - CESPRI ( email )

Via Sarfatti 25
20136 Milan, MI 20136
Italy

Luigi Marengo

Scuola Superiore Sant'Anna di Pisa - Laboratory of Economics and Management (LEM) ( email )

Piazza Martiri della Liberta', 33-I-56127
Pisa
Italy

Andrea Prencipe

LUISS Guido Carli University ( email )

Viale Romania 32
Rome, Rome 00196
Italy

Marco Valente

University of L'Aquila - Faculty of Economics ( email )

Piazza del Santuario, 19
Roio Poggio, AQ, 67040
Italy

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