A Study on the Difference of Open Innovation Effect between Modular and Non Modular Firms in Korea

Abstract

Chesbroitgh (2003) shows that open innovation is more actualized in modular architecture than in interdependent architecture because it is possible to assemble various optimized moduleunit architectures and to positively utilize new technical innovation results and skills.However, in the automotive industry where Dominant Design for internal combustion automotive parts is established, as the proportion of recent electronic devices versus existing mechanical devices increases, most companies are adopting modular architecture as a -way of production. But in the case of primary, secondary and tertiary vendors providing automotive parts to automotive end-product firms, as the modular architecture is being adopted, the situations facing those vendors are very different. Open innovation effect and firm performances appear to be different according to whether vendors can become modular firms as Hyundai Motors has been adopting a modular architecture production system over the last six or seven years. In other words, modular firms show little open innovation effect compared to superficial expectation because they simply -want to assemble given module-unit specifications with given parts of non-modular companies and also they are in the situation of superficial one-way guidance and help from end-product firms. Whereas, as non-modular firms are exposed to direct and equal relationship with modular firms, free from end-product firms, open innovation effect obtained through various processes of technology acquisition appears far greater in non-modular firms. First, this research will tiy to examine the differences of open innovation effect between 幻 jnodular industry such as the automotive inchistiy and a non-moditlar industry such as the mobile phone industry. Second, we will examine the differences of open innovation effect between modular and non-modular companies in value chain at the same time. Through this method, we will try the dimensi 이 w! and overall analysis of the difference in open innovation effect between modular and non modular firms.