Impact of product modularity on mass customization capability: An exploratory study of contextual factors

This study examines how the impact of product modularity on the mass customization capability is moderated by several contextual factors, such as the firms’ information system capacity (ISC), teamwork (TW), multifunctional employees (MFE), and organizational structure (flat or hierarchical) (OSF). Data from 238 firms located in multiple countries across three different industry groups were analyzed to test the moderated regression models and the hypotheses. The results showed that the product modularity strongly impacts the mass customization capability (MCC). Compared to ISC, the social contextual variables, such as TW, MFE, and OSF, have stronger moderating effects on the impact of the product modularity on the mass customization capability. In addition, ISC helps MCC solely for firms with flat organizational structures. Overall, our study suggests that manufacturers who desire to become mass customizers should create flat, nimble organizations with employees who are trained in several different tasks and are adept at teamwork.