Abstract
Purpose: The purpose of this paper is to explore the interplay between firm boundary decisions and
the management of both-and efficiency and flexibility and the implications this has for modular
design in the provision of advanced services.
Design/Methodology/Approach: A single case study in the defence industry employs semistructured
interviews supplemented by secondary data. Data is analysed using thematic analysis.
Findings: The findings provide a process model of boundary negotiations for the design of efficient
and flexible modular systems consisting of three phases; boundary ambiguity, boundary defences and
boundary alignment.
Practical implications: The study provides a process framework for boundary negotiations to help
organisations navigate the management of both-and efficiency and flexibility in the provision of
advanced services.
Originality/Value: Drawing upon modularity, paradox and systems theory, this article provides novel
theoretical insight into the relationship between firm boundary decisions and the management of bothand
efficiency vs. flexibility in the provision of product upgrade services.