Product Architecture and Organizational Structure - How Their Interdependence Impacts Complex Product Development

To examine how an organization’s communication patterns shape its development of complex products, Professor Manuel Sosa, Professor Steven Eppinger and Craig Rowles study the alignment of product architecture and organizational structure . Their research introduces a novel approach to the problem, focusing on how design interfaces that characterize the product architecture map onto technical communication patterns within the development organization.

by Manuel Sosa, Craig Rowles,Steven Eppinger
Last Updated: 23 Jul 2013

Product architecture—the plan through which the function of a product is allocated to its physical components—is a crucial part of developing new products, as is understanding how the knowledge associated with the product architecture is managed.

In this recent working paper, Manuel Sosa (Assistant Professor of Technology Management, INSEAD), Steven Eppinger (General Motors Leaders for Manufacturing Professor of Management Science and Engineering Systems, Sloan School of Management, MIT) and Craig Rowles (Advance Engine Program, Pratt & Whitney Aircraft) examine how communication patterns within an organization affect its development of complex products, in terms of both product architecture and organizational structure.

When developing a complex product—such as a commercial airplane engine, the example used in this study—a company typically assembles groups of cross-functional teams that are responsible for designing the major systems and components that comprise the product. However, factors such as organizational boundaries, the degree of modularity of the systems, and the criticality of the interfaces between components play important roles on how design teams interact, which is critical while managing innovation.

Are the communication patterns of the organization aligned with the product architecture they are developing? How can managers effectively understand how product architecture knowledge is embedded in the development organization? The authors investigate how interfaces between physical components map onto interactions between the teams designing these components. Their approach is the first-ever structured method for addressing these issues, focusing on mismatches between design interfaces and team interactions.

They formulate and test hypotheses to explain the cases when: 1) known design interfaces are not matched by team interactions, and 2) observed team interactions are not predicted by design interfaces. They consider how organizational and system boundaries, system modularity, and design interface strength affect the coupling of design interfaces and team interactions, and are the first to use both design structure matrix (DSM) representation and social network methods for the statistical modeling and hypothesis testing.

This working paper offers three new important contributions to the field: firstly, the authors’ research method captures how product architecture and communication patterns map onto each other; secondly, by focusing on mismatches between design interfaces and team interactions, they offer insights into how to manage interdependence across organizational and functional boundaries; and finally, their models contribute to design structure matrix literature.

INSEAD 2002

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