Software development projects are typically team efforts, wherein groups of specialists work toward the common goal of building a software system. The individual efforts of team members need to be coordinated to ensure product quality and effectiveness of the team. In this paper we model the process of coordination in the construction phase of incrementally developed, modular software systems. The analytical model proposed here supports macro-level decisions regarding the development team size and the coordination policy, based upon micro-level interactions between the modules in a system. The objective in this model is to minimize the effort spent on coordination activities subject to the requirement that the system must be completed within a specified period. Results from the model are used to examine coordination related trade-offs. We show that: (1) more complex systems need a higher level of coordination than simpler ones, (2) if the time available for construction reduces, it is optimal to reduce the level of coordination, and (3) marginal productive output is a diminishing function of team size. The sensitivity of the analytical model with respect to its assumptions is studied by constructing a set of simulation experiments where these assumptions are relaxed. The results of these experiments provide support in establishing the robustness of the analytical model.