Global Value Chains as Entrepreneurial Capture: insights from management theory

Abstract: Management theory offers a unique perspective on the political nature of production epitomized in global value chains (GVCs). Through our reading of management, we challenge several assumptions underpinning much GVC thinking to provide a counter-narrative to the idea that GVCs equate to development. We focus on three ideas within management theory – the entrepreneurial function, the management of knowledge, and standardization. Together, these show the political nature of ‘management’ as class struggle. We unpick the underlying Schumpeterian assumption within mainstream GVC analysis that economic development, and value creation, lie with entrepreneurial functions. In contrast, we present entrepreneurship as value capture. We emphasize its inherent link to knowledge to argue that supposedly developmental entrepreneurial attributes (lead firms in GVC analysis) rest on the concentration and control of knowledge, rather than its dispersal and relinquishing. This concentration is twofold: in negotiations between knowledge sharing and non-sharing inherent to outsourcing and GVCs, and knowledge concentration between low and high ‘value adding’ activities in the international division of labor. We suggest this division of labor relies on standardization – a process that unveils management’s class basis. We conclude to suggest GVCs, like management generally, are not technical divisions of labor, but extended political organizations capturing value.