Competition for control over the labour process as a driver of relocation of activities to a shared services centre

Abstract

New approaches to the study of multinational companies (MNCs) that are sensitive to the issues of power and politics have made considerable progress towards developing a more realistic understanding of MNCs' behaviour. To achieve a full understanding of this issue, however, it is necessary to incorporate the issue of labour. This paper offers a framework for conceptualizing the nexus of power, politics, and labour in MNCs. It suggests that the units in MNC as a result of fragmentation of production compete for control over the labour processes. This leads to the introduction of controlling mechanisms, norms, and standards across the MNC that add to the fragmentation of labour processes and renders them more codifiable and less complex, and thus makes it easier to externalize them. The proposition is supported by a case study of a firm's relocation of services to a shared services centre and its impacts on labour processes on both the sending and the receiving units in the MNC. It is necessary to understand the presence of power relations, politics, and competition in MNCs not only as a consequence but also as a factor of organizational restructuring connected with the fragmentation of production.

Service Centers: Analysis Ofchallenges at Different Developmental Stages

“…Table 6 shows the main elements that are challenges for the relationship with customers: In this category, the results point to a large number of challenges related to the phase of SC implementation, which is justified because it is in this phase that the services are actually provided, and there is interaction with the other client areas of each company. It is noteworthy that most of the challenges in this stage concern elements such as communication, relationship and power, which is close to the results found by Portulhak et al (2013) and Mezihorak (2018).…”

“…In the late 80s, the option for the Service Center model became the main choice when the indiscriminate practice of outsourcing proved to be deficient in some cases and the SC model overcame the limitations and restrictions present in the reengineering processes (BERGERON, 2003). To Mezihorak (2018), the concept of shared services challenges the classical notion of outsourcing, and could be described as a type of internal outsourcing and, in its ideal form, implies in centralization and standardization of all or at least a large group of a companies' administrative and support activities. The determination of the reallocated activities remains within the organizational structure of the company, in the SC, but its GEPROS.…”

“…One of the goals with a SC is to eliminate undesirable redundancy (SCHULZ et al, 2009). However, this leads managers of a SC to seek its growth in a long-term basis, with the development of their own abilities, leading to competition for control of processes with its internal customers (MEZIHORAK, 2018).…”

Offshoring of white-collar services

“…The bargaining power of SSC units is lower as they are frequently treated as merely solutions to cut costs. Indeed, the changing nature of a SSC from being on the periphery of an organisation into the strategic role also altered its business model to become more modular, codified, and contractual (Mezihorak, 2018). This is related to the increased control of employees in a SSC, but also decreasing the complexity of activities by dividing them into smaller tasks.…”

Politicization and political contests in and around contemporary multinational corporations: An introduction

“…The ideological power associated with financial economics accordingly results in cost reductions that render global production networks fragile. In the fourth article, by Mezihorak (2017), another empirical study, the effects of the relocation of the activities of a MNC to a Shared Service Centre on the labour process are discussed. The impact on workplace actors of political contests and circuits of power both inside and outside the MNC are captured.…”