A modular organization is an organization structured via outsourcing where the organization’s final product or service based on the combination of several companies' self-contained skills and business capabilities.
A modular organization is a business structure that can be separated and reunited for working more efficiently. Though computer, appliance, and automotive manufacturers have been experimenting with the modular study, this principle applies to any form of business, large or small.
A modular organization can include, match, mix, or even set aside its segment while focusing on its main business model. The concept is building characteristics of flexibility that can offer the organization abilities for keeping pace with the fluctuating economic climate, better capturing new opportunities, and creating room to restructure.
Sometimes, businesses find themselves missing the possibility of taking advantage of the big opportunity due to their lacking of required capability, or the fluctuating economic climate causing a deviation in business priorities or causing a deviation in their business model. To compete, businesses build a combination of core competencies, developing what it considers to be a suitable business model delivering value to their clients. In a modular organization setup, businesses gain modularity by manipulating the following components.
- Enhancing the talent-skills of the employees
- Introducing a new process
- Expanding each asset’s utility
More from this Section
Entrepreneurship is the process of bringing together the creative and innovative ideas ...
- Grand strategy clusters
Strategies that may be more advantageous for firms to choose under one of four sets of ...
- Norming stage
The norming stage is one in which close relationships develop and the group becomes cohesive. ...
- Management hierarchy
Management hierarchy is the pyramid arrangement of the several levels of managers. ...
The basis on which jobs are grouped together, is called departmentalization. There are ...