A DIALECTICAL MODEL OF ORGANIZATIONAL LOOSE COUPLING: modularity, systems integration, and innovation

This paper uses the original dialectic concept of loose coupling as discussed in Orton and Weick (1990) to reconcile two apparently opposing empirical trends reported in recent organizational and management studies. Whereas a first stream of literature highlighted a mounting drive towards the adoption of modular design for both products and organizations leading to increased specialization and automatic forms of coordination (e.g. Baldwin and Clark, 2001), a second stream stressed the importance of integrative knowledge and capabilities to actively respond to and coordinate changes in innovative environments (e.g. Grant, 1998). By deepening the analysis of the causes, compensation mechanisms, and outcomes of loose coupling, we have argued that these apparently conflicting trends are the two faces of the same coin: loosely coupled systems governed by systems integrating organizations in fact present simultaneously modular and non-modular feature, hence reconciling these two trends.