An evolutionary model for the dynamics of vertical integration and network-based production

The concept of modularity has gained recently a growing attention in the management literature as a key to explain the contemporary trends of industrial dynamics. A stronger exploitation of external «networkbased» economies with respect to internal «bureaucracy-based» economies is one of the major consequences of the diffusion of flexible production systems and of modular architectures for products. To explain this connection, in this paper a model is presented which tries to explain the co-evolution of technology and organization as the outcome of a complex evolutionary process. In particular, through a set of exploratory agent-based simulations we try to show the existence of qualitatively different dynamic processes in coincidence of different phases and specific conditions of product and technology development, as well as the existence of a relationship between this dynamics and other competitive factors, determining a wide set of structurally different dynamical patterns in coincidence of different combinations of factors.