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NTU Management Review Vol. 33 No. 1 Apr. 2023

high-talented human capital have more likelihood to be selected for outsourcing high-
task-specificity innovation activities than for outsourcing low-task-specificity innovation
activities.

2.4.2 Interdependence and Project Modularity
Although an outsourcing innovation activity can be disaggregated into independent,
discrete, and specific tasks, there is still a possibility that some tasks within an activity

cannot be specifically divided but are instead highly interdependent. First and foremost,
there are difficulties of decomposing some tasks due to interdependent components
(Sanchez and Mahoney, 1996) and an overlapping division of labor (Adner and Kapoor,
2010; Gulati and Singh, 1998). For instance, Thomke and Kuemmerle (2002) have
elaborated two tasks–analoging and screening–which are highly interdependent in the

drug discovery process. Kumar, van Fenema, and von Glinow (2009) also indicate
that the globally distributed activities, tasks, and assignments are either more or less
interdependent with each other. According to Thompson (1967), interdependence is related

to a need for achieving concerted action. While two or more tasks are interdependent,
one’s performance may be affected by the change of the other or by the need of both to
interact with each other (Crowston, 1997). Furthermore, the outcomes of these tasks need
to be brought together or integrated to produce the intended product or service (Kumar
et al., 2009), which leads to the construction of a module (e.g., Baldwin and Clark, 1997,

2000; Pil and Cohen, 2006). While a module consists of many components, a modular
system is made up of many modules which are largely independent across one another.
In addition, the boundaries between modules can be settled in different locations and

organizations (von Hippel, 1990). Moreover, each module becomes specific to the system;
making these modules non-specific will cause a loss of performance (Schilling, 2000).
In light of this perspective, we define project modularity as a module integrating
interdependencies among different outsourcing tasks. We argue that besides specifying
tasks, the designing of project modularity could be another alternative mechanism for

firms to capture the value from outsourcing innovation activities in weak IPR protection
countries. Project modularity is based on a clear division of labor between the outsourcing
firm, with the architectural knowledge of a whole modular system, and the contract

provider, with the specific knowledge of a module and a modularized task (Saxenian,

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