Divide and Serve: The Labour Process in Service Value Chains and Networks

Abstract

This article discusses various aspects of labour processes in services characterized by value chains that cross organizational, company, regional or national boundaries. Starting from value chain analysis it first addresses the main conceptual issues in the investigation of service value chains and networks from a labour process perspective. Second, it highlights three particular themes in the analysis of the labour process in services and illustrates these with empirical examples: modularization of services and codification of knowledge, organizational flexibility and flexible employment, and the concurrence of co-operation and competition. In the conclusion, the article sketches significant characteristics of services and service work that need to come into focus in value chain and network analysis from a labour process perspective.

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

“…Some of these actors are more powerful than others and can thus take advantage of creation of these norms and standards. This also means that the upgrading of a previously 'weaker' unit cannot be seen only as a techno-managerial response to the formation of the value chain, but it is necessary to analyse the related changing social relations (Flecker et al, 2013). I argue that labour process theory provides a basis for formulating a framework that grasps the relationship between the interactions between relevant actors, the development of the value chain, 'rule systems', and impacts on the labour process and social relations within the MNC.…”

“…On the other hand, Flecker et al (2013) with their notion of 'divide and serve' strategy, an analogy to that of 'divide and rule', depict the fragmentation of the labour process and the increasing division of labour as a power and political strategy of GVCs' management. Their research follow up Flecker, 2009;Flecker andMeil, 2010 andHuws, 2006, which confirm that this strategy is not an anomaly.…”

“…Their research follow up Flecker, 2009;Flecker andMeil, 2010 andHuws, 2006, which confirm that this strategy is not an anomaly. Instead, it should rather be conceptualized as a relevant part of the current restructuring efforts of MNCs that are directly linked to the fragmentation of production through foreign direct investment, outsourcing, and 'quasi-externalization' (Sydow, 1998in Flecker et al, 2013.…”

“…As Flecker et al (2013) claim, this process is not trivial, and is connected with the fragmentation of labour process, which lead to tensions within a value chain. Oliveira and Clegg elaborate this more deeply within the framework of interplay between the 'episodic' and 'structural circuits of power ' (2015: 444), however, they do not study the impacts on labour and thus miss implications for the reconfiguration of the value chain in the sense of possible internalisation/externalisation of activities driven by this power transformations.…”

“…What we have here is a genuine strategy on the part of the bank's upper management and a de facto 'alliance' (Kristensen and Zeitlin, 2005: 157-84) formed by upper management with the SSC's management in a joint effort to increase control over the labour process and to 5 overcome resistance from both middle management and employees based in the HQ and the SSC. I will argue that this 'divide and serve' strategy, an analogy to that of 'divide and rule' (Flecker et al, 2013), is not an anomaly, and should rather be conceptualized as a relevant part of the current restructuring efforts of MNCs that are directly linked to the fragmentation of production through foreign direct investment, outsourcing, and 'quasi-externalization' (Sydow, 1998in Flecker et al, 2013.…”