Sheffer, D A (2011) Innovation in modular industries: Implementing energy-efficient innovations in us buildings. PhD thesis, Stanford University, USA.
Abstract
Product architectures are becoming increasingly modular, along with the industries that produce them. Instead of a single integrated firm designing and producing an entire product, clusters of firms design and produce individual components that are later integrated. While modularity has often been hailed as a catalyst for innovation, I show that modularity can hinder some kinds of innovation. Within a modular system, innovations that are limited to individual modules without altering interfaces and processes (modular innovations) thrive, while innovations that cross module boundaries and alter interfaces and processes (integral innovations) are stifled. In a study of implementations of twenty three different technologies in one hundred and twelve US buildings, I demonstrate that the odds for integral innovations to be implemented are 84% lower than for modular innovations, even after accounting for technology costs and other factors. The primary underlying mechanism is that integral innovations involve a loss of the embedded coordination that standardization provides. Thus, I investigate supply chain integration as a moderator and a substitute for the lost coordination. I compare high integration (both vertical and horizontal), medium integration (either vertical or horizontal), and low integration (neither vertical nor horizontal). I demonstrate that as integration increases, so does the likelihood of implementing integral innovations. In fact, the odds of implementation of integral innovations increase by 542% in supply chains characterized by high levels of integration. Thus, I shed light on the relationship between an innovation's alignment with existing industry structure and standards and the complex moderating effect of supply chain integration in modular industries. In addition, I develop a comprehensive analytical framework to explain innovation diffusion in the construction industry -- integrating the supply chain learning and coordination issues discussed above with high levels of demand fluctuation, competitive bidding by trade, and broken agency.
| Item Type: | Thesis (Doctoral) |
|---|---|
| Thesis advisor: | Levitt, R E; Katila, R and Taylor, J E |
| Uncontrolled Keywords: | coordination; product architecture; innovation diffusion; standards; bidding; innovation; integration; learning; standardization |
| Index terms: | integration, analytical framework, agency, accounting, bidding, boundaries, innovation diffusion, competitive bidding, modularity, standardization, module, construction industry, implementation, coordination, supply chain integration, becoming, product architecture |
| Subjects: | organizational analysis, sociology, industry analysis, design flexibility, performance measurement, management, supply chain integration, data analysis and analytics, design methods, philosophical process, architectural elements, property law, contractual arrangements, bidding, economic analysis |
| Topics: | Organizational Design, Design Practice, Research Practice, Business Strategy, Supply Chain Management, Quality Management, Legal Issues, Procurement |
| Descriptive scope: | 4 PCTA |
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