Modular Product and Process Architectures:
Frameworks for Strategic Organizational Learning

Ron Sanchez

IMD
Lausanne, Switzerland

Abstract

This chapter investigates the nature of modular product and process architectures and their roles in supporting knowledge management and strategic organizational learning. We first consider some basic arguments for making key forms of organizational knowledge explicit, rather than leaving such knowledge in personal, tacit form. We then define product and process architectures and identify the key forms of organizational knowledge required to create product and process architectures. We consider what makes architectures modular and why the creation and use of modular architectures helps an organization to make its current technical and market knowledge explicit.

Using modular architectures in this way helps an organization both to identify its current knowledge assets and to discover the "capability bottlenecks" that limit its ability to create and realize new products. We examine four forms of strategic learning that can occur in overcoming an organization's current capability bottlenecks. We conclude by outlining a systematic architecture creation process that uses modular architectures to identify, leverage, and continuously improve an organization's technical and market knowledge.

To appear in "Strategic Management of Intellectual Capital and Organizational Knowledge" edited by Nick Bontis & Chun Wei Choo (Oxford University Press).