Modularity in building mass customization capability: The mediating effects of customization knowledge utilization and business process improvement

•We investigated how modularity influences mass customization through learning.•We examined the model using a large sample of Chinese manufacturers.•The mediating effects of organizational learning practices are supported.•Modular design is not sufficient for building mass customization capability.

This study investigates the relationships among product/process modularity, organizational learning practices, and mass customization (MC) capability. Drawing on organizational learning theory, we propose that organizational learning practices help to embed the knowledge gained from modular design practices into organizational processes, enhancing MC capability. We empirically test the mediating effects of two organizational learning practices—customization knowledge utilization and business process improvement—on the relationship between product/process modularity and MC capability, using data collected from Chinese manufacturers. We find strong support for the mediating role of organizational learning practices in the relationship between modularity and MC capability. Our findings have implications for management strategies and point to directions for further research in this area.