The fragmentation and international dispersion of production has given rise to complex global production networks (GPNs), also termed global value chains (GVCs), transforming structures and processes of international production. This phenomenon, which has attracted considerable attention in geography (Dicken et al., 2001; Henderson et al., 2002), sociology (Gereffi and Korzeniewicz, 1994; Bair, 2005) and political science (Berger, 2005), represents a new phase in the organization of the global political economy (Neilson and Pritchard, 2009) and bears significant implications for the role, and even the meaning, of the corporation. New economic and institutional forms are shifting and blurring the traditional boundaries of firms, industries and countries, while altering the economic and governance relationships among business, labour, governmental agencies and non-governmental organizations (NGOs).
Despite the growing research on GPNs and GVCs, large corporations are still frequently portrayed as self-contained entities evolving in increasingly global markets. This misleading premise of a unified corporate entity is dominant not just in the international business literature but also in policy circles where discourses are elaborated and decisions are made to promote economic growth, competitiveness, development, sustainability and social welfare. As a consequence, a number of core issues arising from the transnational disintegration of economic activity remain poorly understood in assessing the impacts of globalizing processes. For example, the expansion of GPNs can be viewed as global Taylorism, as outsourced activities are routinized and commoditized despite their growing sophistication. The implications for labour and for development are not as rosy as free-trade advocates would contend.
The management literature has generally embraced the vertical disintegration of firms and the formation of ‘strategic networks’ (Sydow, 1992) as a positive development in which corporations become more agile and dynamic, focusing on their core competencies while leveraging complementary capabilities held by network partners that remain indispensable to the overall productive enterprise. Governance in these networks is often viewed as less hierarchical and more democratic than in production systems dominated by large multinational corporations (MNCs); indeed, the fragmentation of production has been associated with the demise of the era of large, powerful integrated corporations (Davis, 2013).