What Really Drives the Adoption of Modular Organizational Forms? An Institutional Perspective from Italian Industry-Level Data

While the rise of modular organizational forms is a global phenomenon, explicit causal models are currently available only for the US case. To date, no study has been conducted outside the USA about what drives firms to use modular organizational forms, and why would firms in some industries generally rely on more modular organizational forms than firms in other industries. Building on Schilling and Steensma’s work of 2001, we apply general systems modularity theory to the Italian case and explain why in some industries there is a greater use of modular organizational forms using data from 68 manufacturing industries. The results of our regression analysis diverge significantly from the US case showing that, in the Italian case, organizational modularity is driven by labor intensity, industry specificities and nation-specific factors.