Hidden Structure: Using Network Methods to Map System Architecture

Carliss Y. Baldwin; Alan   MacCormack; John  Rusnak

Article | Research Policy | October 2014

Hidden Structure: Using Network Methods to Map System Architecture

by Carliss Y. Baldwin, Alan MacCormack and John Rusnak

Abstract

In this paper, we describe an operational methodology for characterizing the architecture of complex technical systems and demonstrate its application to a large sample of software releases. Our methodology is based upon directed network graphs, which allows us to identify all of the direct and indirect linkages between the components in a system. We use this approach to define three fundamental architectural patterns, which we label Core—periphery, multi-core, and hierarchical. Applying our methodology to a sample of 1,286 software releases from 17 applications, we find that the majority of releases possess a "core-periphery" structure. This architecture is characterized by a single dominant cyclic group of components (the "Core") that is large relative to the system as a whole as well as to other cyclic groups in the system. We show that the size of the Core varies widely, even for systems that perform the same function. These differences appear to be associated with different models of development—open, distributed organizations develop systems with smaller Cores, while closed, co-located organizations develop systems with larger Cores. Our findings establish some "stylized facts" about the fine-grained structure of large, real-world technical systems, serving as a point of departure for future empirical work.

Keywords: Product design; architecture; modularity; software; dominant designs; Complexity; Product Design; Software;

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Baldwin, Carliss Y., Alan MacCormack, and John Rusnak. "Hidden Structure: Using Network Methods to Map System Architecture." Research Policy 43, no. 8 (October 2014): 1381–1397.

Working Paper | HBS Working Paper Series | 2019

Design Rules, Volume 2: How Technology Shapes Organizations: Chapter 8 Rationalizing Flow Processes

Carliss Y. Baldwin

The purpose of this chapter is to examine the value structure of flow production processes and to explain why it is necessary to rationalize flow processes using the tools of systematic management. I first explain the problems facing managers of multi-step flow production processes at the end of the 19th Century. I introduce a model of the value structure of a production process made up of interdependent steps and define the production bottleneck of the process. I use the mathematical definition of a bottleneck to derive two general properties of stochastic multi-step flow processes with bottlenecks. These properties imply a need for ongoing managerial oversight and intervention using a set of tools that went by the label systematic management. Without active systematic management to address production bottlenecks, large-scale flow processes can easily collapse into chaos. I then argue that that the use of automated machinery, larger (or growing) markets, and systematic management are supermodular complements: each attribute makes the other two more valuable. The next chapter will explore how the technological requirements of multi-step flow production processes affect the optimal design of organizations implementing these technologies.

Keywords: flow processes; bottleneck; systematic management; Production; Management; Problems and Challenges;

Citation:

Baldwin, Carliss Y. "Design Rules, Volume 2: How Technology Shapes Organizations: Chapter 8 Rationalizing Flow Processes." Harvard Business School Working Paper, No. 20-032, September 2019. View Details

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The purpose of this chapter is to explain what the technologies of flow production with stochastic bottlenecks require and reward in organizations. I argue that organizations successfully implementing these technologies are likely to have unified governance and exercise direct authority over process design, job definitions, and task assignments. As they come to employ more people, they will create hierarchical management structures as a means of managing information flows and delegating decision rights. Finally from the early 20th Century through the present, most of these organizations saw advantage in being legally organized as corporations, which could own assets, enter into contracts, and employ individuals in their own right. The result was a “paradigm” of mass production—a cluster of concepts that came to define both “big business” and “high technology” in the United States and elsewhere. Throughout the middle years of the 20th Century, many members of society took for granted the fact that successful businesses using advanced technology would be organized as large, vertically integrated corporations, exercise direct authority, and use managerial hierarchies to channel information and delegate responsibility.

The purpose of this chapter is to explore how technologies and organizations engaged in flow production evolve over time. To allow for an apples-to-apples comparison, I examine organizations using essentially the same physical technologies, making similar products, and competing in the same markets. Specifically, I look at the organizational differences among the largest automakers in the United States and Japan. I focus first on Ford between 1910 and 1930, then on General Motors from the 1920s through the 1960s, then Toyota (and other Japanese automakers) from the 1960s through 2000. The differences among these organizations show that while technology shapes organizations within broad limits, it does not determine an organization’s complete design nor its long-term competitive success.

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Hidden Structure: Using Network Methods to Map System Architecture

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