Division of Labour Within and Between Firms.
-Towards a Model to Describe the Organisation of Work
Fredrik Augustsson.
The MITIOR-project - Media, ICT and Innovation in Organisation and Work/ SMIF
National Institute for Working Life, 112 79 Stockholm, Sweden.
fredrik.augustsson@niwl.se. Phone: +46 (0)8 730 97 58/ 37 5. Fax: +46 (0)8 730 95 01
Stream: Economics and Institutions
Abstract
In this paper, the author develops a model for analysing organisation of work in contexts larger than the single
firm, based on one of the classic concepts of social science: the division of labour, here extended conceptually to
the division of labour within and between firms. The paper starts out by analysing earlier theorising of the
division of labour in some classical economic, Marxist and sociological writings (e.g. Smith, Marx, Durkheim
etc), focusing on some of the implications and problems of usage. It is argued that in most writings, the meaning
of the actual concept of division of labour is not fully explicated. Instead, what is elaborated upon are the reasons
behind division of labour in general, -or a certain form of it, or its implications for society and groups of actors.
This is followed by a discussion of the possible advantages of disconnecting the concept of the division of labour
from the different theoretical implications that limit its use for analysing the organisation of work. An explicit
definition of division of labour within and between firms is given, namely: the division and integration of
functions within and between firms involved in the making of certain products and services. The paper further
discusses how this version of the division of labour relates to more commonly used models to describe the
organisation of work, such as production networks, as well as transaction cost economics, and what benefits can
emerge from the utilisation of the earlier concept.
1
PART I
Introduction
I deal with two related questions in my forthcoming dissertation: How is the production of
interactive media solutions organised, and why is it organised like it is?2 I had the somewhat
naive idea that the first question would be quite an easy step towards the second when I
started. For several reasons, this turned out not to be the case. First of all, there is no welldefined interactive media industry with distinct production firms who make solutions from
scratch. Instead, there is a variety of different firms involved in different parts of the process,
both newly started and those with background in several other areas. Thus, there is no
immediately given population of firms to investigate. A fruitful point of departure in cases
like this is to start with the actual solution being made, divide the production of them into a
number of separate functions or tasks and see who performs them. This paper is concerned
with creating a model of how this might look.
Second, the functions, which are the basic unit of the model, are not easily defined either.
There are a number of different tasks involved in the making of an interactive media solution.
Some of them are necessary, such as deciding what the solution should involve, the design of
the content and the computer programming to make it all work as intended. Several other
functions are included (and necessary) from time to time, depending on the kind of solution
being chosen. These include audio and video, content research, voice over, animations (both
1
The research this paper is based on has been done within and is sponsored by the MITIOR-project at NIWL
(see final page for more information about the project). I am grateful for valuable comments from Göran Ahrne,
Patrik Asper, Casten von Otter and Åke Sandberg, as well as participants at the doctoral seminar series at the
Sociological Institution, Stockholm University. As usual, though, the responsibility is all mine for what
eventually was written down.
2
A precise definition of interactive media is presented in part IV of this paper.
2- and 3-D) and photography. To this can be added supportive functions necessary to get the
solution to the end-user and make sure it works properly: duplication of CD-ROMs/ DVDs or
a server to put the solution on, education, support, etc (see Appendix One for a list of
functions). Third there are huge differences in the size and complexity of different interactive
media solutions. Some are simple routine products that experienced workers can complete in
half a day, such as standard static web-pages based on HTML. Others demand extensive
innovations (in the form of R&D, sometimes including universities and research institutions)
and the full-time work of hundreds of workers for years, such as advanced computer games3.
Fourth, there are a variety of ways to organise the different functions involved in one
interactive media production in terms of co-ordination, responsibilities and collaboration, both
within and between firms including customers. The variety can be described in three
dimensions. First, there is a variety in organisation between firms at any given time. Second,
there is a difference within the same firm over time (and sometimes simultaneously if the firm
is engaged in more than one project at a time). Third there are different kinds of relations
between the firms involved, including customers, both from firm to firm and over time. Some
productions resemble traditional ways to organise this kind of work. Others can best be
described as virtual organisations or networks of actors. Certain features of production are
more or less copies of neo-classical assumptions about the relations between rational actors.
At any given time, vertical integration co-exists with flexible specialisation. This observed
variety is not limited to the production of interactive media solutions, Giertz (2000) reports
similar trends for Swedish business life in general due to increased de-centralisation and
outsourcing of production (cf. Powell & Smith-Doerr 1994). As will be discussed in part IV,
there are certain limits to variation in the organisation of production.
Although valuable insights have been reached concerning industrial organisation the last
two decades, the field is still underdeveloped (Richardson 1972, Granovetter 1994, Littek &
Charles 1995, Hollingsworth & Boyer 1997, Coase 1999). Several directions within the social
sciences provides valuable pieces to build upon, but none of them suffice to fully describe the
organisation of work in diverse modes of production, such as the production of interactive
media. Descriptions of single firms (mainly, but not exclusively, found in organisation theory)
give us a clear picture of the internal functions of the firm, but often suffer from an
underdeveloped view of its environment, both the relations between different actors and the
market. Studies of relations between economic actors (including use of the market) are mainly
found in economic, resource dependency and studies of inter-firm collaboration on innovation
and production. They have made us aware that the firm and the market can be seen as
alternative modes of co-ordination (Coase 1937), that there are dependence relations between
formally independent firms, and when, why and how firms choose to collaborate with each
other. But focussing on the relation itself has a tendency to shadow the actual actors involved.
Furthermore, different forms of relations are seldom compared simultaneously. Attempts to
go beyond the firm include a variety of efforts ranging from statistical descriptions of
industries and organisational demographics (Carrol & Hannan 2000) to organisational fields
and clusters. Some of these attempts are merely aggregations of the single firm, while others
include different kinds of relations between actors as well as geographical issues. They have
contributed with valuable insights on the role of spatial distance in production and the
constructions of industries and clusters of organisations. But many of these models are still
partially underdeveloped and mostly used for case studies. The gains and shortcomings of
3
The first example is mostly performed by private persons, such as computer engineer students, and not as part
of the industry, whereas the second can only be performed by a handful of companies world wide.
2
previous models related to describing diverse patterns of organisation of work found in
interactive media production, will be further dealt with in part II.
The central question of this paper then becomes how to build on earlier attempts in creating
a unifying model that describes the different patterns of organisation found in the production
of interactive media. The model should illustrate both intra- and inter-organisational
structures and relations. The term model should be understood in quite loose terms: It is as
much a research strategy as an analytical tool and an end product.
A quite common strategy when finding something unexplained is to adopt a new
organisational concept, such as, service, project, knowledge, learning, network or virtual
organisation4. Clearly, a lot of things have changed the last decades in the way production is
organised within and between firms. But everything hasn’t changed, and not in the same
direction. The question is whether new forms of organising work have to be analysed with
new concepts. It think not. There is a problem if we have to change language every time
changes take place, it is a form of reinventing the wheel. Furthermore, if there is no
consistency in the language used to describe how work is organised, it is not possible to see
what has actually changed and what is the same (cf. Sandberg 1997). What we end up with is
endless debates over how to describe work where stereotyped images of Weber’s bureaucracy
model or the Taylorist work organisation are contrasted to archetypes of the new5.
The argument I will be making throughout this paper is that a more fruitful way of
describing the organisation of work, including its continuity and change, than inventing new
concepts, is to focus on one of the central building blocks of the organisation of work. That
way we find a borderline, a unifying measurement instrument, towards which different ways
to organise production can be measured. The building block chosen here is the division of
labour, extended conceptually to the division and integration of labour within and between
firms. The reason to choose division of labour in favour of alternative concepts such as
learning, professions or culture, is that it is a fundamental pattern of both organisations (Smith
1993, Weber 1978, Mintzberg 1983) and society (Marx 1973, Durkheim 1997, Rueschmeyer
1986, Sayer & Walker 1992). Since division of labour is present in all forms of (organised)
production, it facilitates comparisons both between firms, industries, cultures and over time.
Furthermore, division of labour is implicitly or explicitly present in all previous models to
describe the organisation of work. Division of labour can therefore be used as a unifying
concept to bring these previous insights together.
However, since division of labour as a concept has been interpreted and used differently by
scholars from a variety of disciplines for several hundred years now, its meaning is sometimes
vague and contradicting. For instance, there are few clear definitions of what the concept
actually means. More problematic, few writers separate division of labour as a concept from
division of labour as a theory to explain why a certain production process comes about. The
ways in which division of labour is divided into technical, social, vertival and horizontal
dimensions sometimes leads to more confusion than clarity. There are conflicting views of
how and to what extent ownership of the means of production affects division of labour.
4
Recently, this tendency has extended to renaming working life and society as a whole. The most well known
example of this is probably Castells’ information society (1996) or the term ‘The New Economy’ (both
associated with the IT-industry, of which interactive media production is a part).
5
One of the things that makes the debates about the old versus the new solution to the organisation of work
interesting is the postmodern twist they have: A generalised proclaimed new thing is contrasted to a caricature of
something old that never existed in the pure form it is described in the debate.
3
These issues need to be dealt with before the concept can be used to build a new model. Part
III contains an overview of how division of labour has been used in earlier writings, and
arguments about why and how the use of the concept might be altered.
The new model to describe the organisation of work, based on the division of labour within
and between firms, is presented in part IV of the paper. Empirical findings (previous as well
as from work in progress) regarding Swedish interactive media production is employed to
illustrate how the model looks when applied to an actual case. Even though the findings are
very preliminary, they serve their function as a basis to discuss the possible advantages and
shortcomings of using division of labour as a basis for describing the organisation of work.
Since both IT and division of labour is used in relation to a range of different phenomena
and research problems, it is probably a good idea to name some areas that will not be touched
upon in this paper in order to avoid unnecessary confusion. Most importantly, the paper does
not deal with any theories explaining why division of labour and certain ways to organise
work arises6. The paper is limited to the production of goods on the labour or production
market. This means that some areas are only touched upon: unpaid labour, work performed by
end-users and by the state. There will be no discussion here of who actually performs certain
types of work. That is, there will be no dealing with the division of labour between sexes,
ages, ethnic groups, social classes, professions or any other social stratification. The paper
does not deal with possible changes in the organisation of work or labour market composition,
neither generally nor in relation to implementation of IT-solutions. These are empirical
questions that can not be determined by a descriptive model7 Most of these issues will,
however, be included in the forthcoming dissertation, since they are vital parts of explaining
the organisation of work in the production of interactive media.
PART II
Descriptions of the organisation of production
Since the study of work and organisations began, there has been a massive amount of ways to
encounter the production of goods and services at different levels (individual actors, groups of
workers, firms, industries, working life, nationally and globally). Broadly speaking,
researchers and scholars have tried to answer three questions: How is work organised; why is
it organised like it is; and how should it be organised (cf. Mintzberg 1983, Scott 1987, 1992,
Castells 1996-98). Here, it is only the first question that interests us. The area is still large,
however, and we can only briefly touch upon some of these descriptions. The three main
directions that will be discussed are studies of firms and work-organisations, studies of
exchange and other inter-firm relations, and studies of industries and other attempts to
integrate and go beyond the above. There is an inherent variation within these three
directions, and several cases that overlap each other. The distinctions here aim at showing
three important components in the organisation of work: economic actors, the relations
between them, and the environments where actors are situated and relations are built. Most of
these directions have been developed for purposes other than the present one. The purpose
here is not to knock down strawmen, merely to show what parts of them that can be fruitfully
integrated into a description of diverse modes of production, such as the making of interactive
media solutions, as well as their limitations and the needs to go further.
6
This is not because there are no such theories or that I don’t have any views regarding their usefulness, it
merely falls outside the general purpose of the paper.
7
Still, as I argued earlier, a model to describe the organisation of work is vital to answer these questions.
4
Studies of firms and other work-organisations
Most descriptions of work are made by researchers interested in real firms occupied in the
performance of certain functions and hence actual solutions to the organisation of work, ways
to improve them as well as the consequences for people within them. Findings are then turned
into generalised forms of describing the features seen as most relevant and striking for a
certain kind of organisation. If one wishes to compare actual solutions to the organisation of
work, some kind of borderline case or ideal-type is needed. Max Weber is sometimes viewed
as the father of organisational theory due to his writings on bureaucracy (among other things).
But within organisational research it is often the Tayloristic organisation that has become the
norm to which other forms of organising work is compared (Rowlinson 1997; Bloomfield et
al 1997; Thompson & Warhurst 1998).
The basic starting point when studying the single firm is to either look at what the members
of the firm does, or the process by which the input of the firm is turned into its output.
Structurally, you usually end up with a number of boxes and some arrows between them, that
is, a separation of functions into groups of roles and the relations between them. Several by
now familiar concepts to people active in this field have been developed to describe the
structures within firms: roles, professions, control, hierarchy, authority, structure,
divisionalisation, etc. Although a number of writers have developed alternative models to suit
their purposes, I think most people would agree that we have come as far as is necessary on
this route. Our understanding of why firms look and behave the way they do is still far from
complete, but the way to describe them is more or less satisfactory by now. Hence, we need
not bother developing new descriptions of the internal of firms.
Although suitable for its purposes, the focus on firms has its inherent shortcomings. No
matter how well developed the descriptions are, they can only present a piece of the
organisation of work, since they only show what goes on inside the firm, not the relations to
the environment or what that environment is made up of. Most other relations than the intraorganisational ones are neglected. Despite the finding that organisations are dependent on
their environment (Thompson 1967, Pfeffer & Salancik 1978, Aldrich 1979), and that this
environment is made up of other organisations (Perrow 1986, 1991, Ahrne 1994), the analysis
of the organisation of work based on the single firm has maintained its influence in the social
sciences. The limits of this are becoming all the more apparent with increased outsourcing and
collaborations between firms (Piore & Sabel 1984). The neglect to understand the
surroundings of firms both concerns the shape and role of markets and other actors (Perrow
1986).
Relations between economic actors
Several directions within the social sciences look specifically at the relations between
different economic actors. Three directions are here used to exemplify different forms of
relations: neo-classic economic theory (including its followers Transaction Cost Economics ,
TCE, and contracts theory); resource dependency theory; and research on inter-firm
collaboration. Although they all deal with the relation between the firm and the actors in its
environment, they have different focus. Neo-classical economics centre on competition and
exchange, resource dependency theory on the dependence between actors, and the latter on
collaborations between firms.
Formal economic models are attempts to build unified theories of the economy including all
different forms of organisational structure there is, different kinds of actors and actions into
one model. To be able to do this, it is necessary to make clear and rigid assumptions about the
5
preferences and behaviour of actors, as well as markets. The most well recognised version of
this is probably to be found within neo-classical economics and their separation between the
firm and the market, or individual and market on the micro-level. The whole issue of
organisation of work is here often reduced to the question of make or buy (Williamson 1975,
1985).
It is easy to criticise Homo Economicus and more generally the assumptions that some
(mostly neo-classical) economists make about actors and societies, since they so clearly are
violations of our everyday perceptions of how people really act and how the economy really
works8. But the assumptions made by economists are not supposed to reflect how the real
world actually works or how people really act. Instead, they are ideal-types developed to see
how the world would work if it weren’t as messy as it really is (Polanyi 1992, cf. Marx, 1844,
for a critique). Furthermore, these formalised models do yield results and have enabled
economists to form a kind of cumulative knowledge of economic behaviour sociologists so far
have been incapable of (cf. Swedberg 1990, Smelser & Swedberg 1994). The main
achievements of neo-classical economics in terms of relations between economic actors is
clearly their elaboration on economic exchange, exemplified with the price model based on
supply and demands. This is an area where sociologists (for instance) have little to say at all
(Smelser & Swedberg 1994).
The different attempts made by economists to answer the central question posed by Coase
(1937) regarding the existence of firms, often dealt with under the heading ‘The Theory of the
Firm”, have generated several interesting inputs (Alchian & Demsetz 1972, Williamson 1975,
1985, Camacho 1996). It further helped spur the interest among sociologists to once again
tackle economic issues (White 1981, Granovetter 1985, cf. Granovetter & Swedberg 1992,
Smelser & Swedberg 1994). The main benefit is the revitalisation of the idea that firms and
markets can be seen as different modes of co-ordinating production. Following from this is
the argument that relations within and between firms are analytically compatible, and that
markets are socially constructed institutions (Hodgson 1987, North 1990).
But the strength of clarity in the formal model becomes a weakness if we wish to describe
actual cases derived from empirical findings. First of all, neo-classic economists have a vague
idea about the firm (Hart 1989). Even though TCE has come a long way since Coase, it is of
little help for describing the firm. When the firm is dealt with, it is still in rudimentary,
abstract terms (ibid.)9. The theory basically assumes that the internal of the firm will be
organised in accordance with the ideas of the owner (without specifying how it is actually
structured).
Agency theory (Alchian & Demsetz’s 1972) is quite helpful here. They define the firm as a
nexus of contractual solutions to the problem of shirking where the marginal products of
individual team members are hard or impossible to determine. Therefore, the role of
monitoring develops. Hence, since the firm, according to this line of thinking, is nothing but a
special case of the market, the same analytical tools can be applied to understand it. But
agency (and hold-up) theory does not help solve the problem of describing how the actual
production is organised, merely specifying when firms will arise and ways to design contracts
8
That models differ from our everyday perception of reality is no argument for rejecting them, though (Cf.
Hedström 1996).
9
Both Coase and Williamson claim that TCE can be used to explain variations in the internal structure of firms
(Ménard 1996). But the overwhelming part of TCE is still pre-occupied with the choice between markets and
hierarchies and (sometimes) intermediary forms (Pitelis 1993, Groenewegen 1996).
6
and incentives to get the desired output of work (cf. Kerr 1975, Holmström & Milgrom 1991,
Holmström & Roberts 1998). Furthermore, it is often an assumption that labour contracts are
equal to contracts on spot-markets, which is highly speculative.
A second shortcoming of economic models is that formal economic theory lacks a clear
picture of what markets are and how they come into being. Naturally, there is an idea about
what an abstract perfect market looks like, but few views of how a real one should be
characterised (White 1981, Hart 1989, Sayer & Walker 1992, Sayer 1995, Hollingsworth &
Boyer 1997). Related to this, formal economic models in principle only acknowledges one
form of relation between independent economic actors namely positive-sum exchange. Other
relations are viewed as indicators of, or resulting from, imperfect market conditions.
Exchange is an important part of economic life, but it is not all there is to it (Weber 1978).
Based on contingency theory (cf. Burns & Stalker 1961), Resource dependency theory
assumes that all firms (and other organisations) are dependent on outside resources to
function. A lot of these resources are in the hands of other firms, whom the firm has to
exchange with. However, since resources are not evenly spread, there will be differences in
power between firms. Therefore, the ideal market exchange assumed by formal neo-classic
economics is not always an accurate description of actual relations. Resource dependence
complements neo-classical theory by explaining how formally independent firms come to
depend on and dominate each other10. However, due to sometimes treating power relations as
zero-sum games, the theory sometimes neglects the mutual benefits of inter-firm
collaborations (and thereby some of the reasons why competing firms tend to work together).
While earlier writers focused on inter-firm competition and dependence, recent studies have
paid a lot more attention to inter-firm collaborations, both in production and innovation. This
is especially true in relation to innovations in IT, learning and entrepreneurship (cf. Powell &
Koput 1996, Cooke & Morgan 1998, Swedberg 2000). Concepts such as networks and
clusters have had a prominent role here (see more below). This attention to collaboration has
lead to a much thicker description of the variety of inter-firm relations. A problem, though, is
that the questions of differences in power, dependence and stratification (both within and
between firms) sometimes are downplayed or even neglected. Several networks and clusters
are centred around one or a few dominant actors (Augustsson 2000, Engstrand forthcoming).
And as studies on gender and ethnicity have shown, access to important networks can not be
taken for granted.
The theories above give us valuable insights into different forms of relations (or modes of
co-ordination) within and between firms, but none can in itself describe the range of relations
between actors. And since we can not decide in advance which kind of relations there will be
between different actors, we need to bring them together in the model. Conceptually, the
range of different relations can be arranged according to mode of co-ordination/ governance
structure (Hollingsworth & Boyer 1998) or level of integration Andersson (2000). Here, they
will mainly be classified according to formal and informal dependence and independence,
respectively (see more in part IV).
Attempts to integrate and go further
Attempts to integrate and or go beyond the single firm are still rare, although growing
(Granovetter 1994, p. 456). Two general strategies can be distinguished here: aggregations of
10
The concept asset-specificity Williamsons (1975) has proved valuable to develop this perspective (Perrow
1986, Ahrne 1994).
7
single firms and attempts to integrate actors and relations, often with reference to the role of
geography. In a sense, all research that goes beyond the single organisation must include
geography, at least as a way to mark the borders of the research subject. The difference is that
the latter models view localisation and distance as a determinant factor for the structure of
production11.
Aggregate strategies attempts to go beyond the firm and map out its environment from a
macro-perspective using statistical methods for data-analysis. This is basically a way of
dividing society in order to make it manageable. For this purpose, it is vital to our
understanding of the scale and scope of production (especially longitudinal changes).
Theoretically, aggregate models are mostly thought of in relation to population ecology and
organisation demographics, although most descriptions of production are based on a thought
similarity between the firms under study. A population of firms usually means firms with
similarity in form, meaning similar structure, performing similar function and therefore
fighting over the same scarce resources (Hannan & Freeman 1989, Fliegstein 1996, Aldrich
1999, Carroll & Hannan 2000)12. The descriptions are more or less an enumeration of the
characteristics of something larger than a firm, but usually not the entire society. However,
studies of industries and organisation demographics based on statistics do not tell us much
about the actual structure of production, or the relations between functions involved in the
making of certain products and services. There is not much in the figures that makes it
possible to form some kind of analytic model of how work is organised13 (Coase 1990).
Among strategies to integrate actors and relations, networks have sailed up as one of the
most popular concepts within social science. It seems as if no description of social interaction
is complete without at least one reference to Mark Granovetter’s seminal article (1985).
When the term network is used it has two different meanings that could benefit from
integration, but unfortunately sometimes are confused (Powell & Smith-Doerr, 1994). First, as
a more or less stable informal relation between more than two actors, which is the meaning
Granovetter initially gave it (1973). This meaning has been more or less adapted to different
levels of analysis (inter- and intra-organisations, regions and nations). Instead of individuals,
you have collective actors with stable network-type relations between them. It is sometimes
hard to tell when organisational networks transform into associations, joint ventures and
organisations (Granovetter 1994, Ahrne 1994, Boli & Thomas 1999). Still, what we are
talking about is network as a type of relation between distinct actors in the organisation of
work. The second usage is not networks as relation, but as form of organisation or authority
itself. As such, it is believed to differ from both the firm and market, or rather to be something
in between or both (Piore & Sabel 1984, Powell 1990, Powell & Smith-Doerr 1994). Hence,
organisational borders are thought to be blurred or less important.
11
In the model presented in this paper, the role of geography is left out. It is elaborated upon elsewhere
(Augustsson forthcoming).
12
It is not the case (no matter how abstract you speak of a function) that all organisations involved in the
performance of a certain function have similar form. Thereby organisation population theory neglects all other
organisations involved in performing parts of the function that the organisations of a certain population have
relations of different kinds to.
13
Another problem is relevant for interactive media. As stated previously, no distinct group of firms produce all
interactive media solutions. A lot of large organisations in completely other areas are developing their own
interactive media solutions internally. Thus, we could theoretically have a complete extinction of interactive
media producers without a reduction in the amount of interactive media produced. Therefore, the idea that
statistical presentations can give us accurate descriptions of a manageable part of society might lead to analytical
fallacies. Similar findings are reported from Call Centers (Economic and Industrial Democracy 2001).
8
Networks assume that the relations between the different actors or units of production take
on a certain form, which is not always the case. Some firms and individuals do have ties
between them that can be described in terms of a network structure. But all actors involved in
the performance of a function will not have this, and certainly not all the time (Fliegstein
1996). Furthermore, at certain points in a production, the organisational boundaries might
seem blurred, but mostly they are not (Ahrne 1994, Augustsson 2000).
Every performance of a function and all production have to take place somewhere (even if
it is ‘virtual’ Jackson 1999, Augustsson 2000), and all separate tasks of a function have to
come together in time and space at some point. That is, all work that has been divided within
and between different firms needs to be integrated again for a final product to emerge. Firms
do not place themselves randomly, even when the attainment of raw goods or logistics is not
expensive. Instead, organisations involved in closely related fields of activities tend to cluster
together at a number of places around the world. Thus, that populations of firms involved in
the performance of similar or identical functions tend to be placed rather close to each other
should not come as a surprise14. Still, the re-discovery of the importance of regional clusters
of organisations involved in similar activities was seen as one of the most exciting findings
within industrial organisation during the 90s15.
Organisational fields go one step further than clusters by recognising that any geographical
area will include several fields (or clusters) of organisations. The fields of organisations do
not have to have relations between each other, or even be aware of each other’s existence
(more than as plates on addresses). Still, they might be fighting against each other on other
levels over the control and use of collective resources (such as land, labour and
communications).
Clusters and organisational fields share both the benefits and setbacks of using a
combination of geographical closeness and functional similarity. They assume a geographical
closeness that actors involved in production need not have, and vice versa that geographically
close organisations are more dependent on each other than are distant ones. This does not
mean that functions can not be clustered or firms more dependent on other firms in the
immediate surrounding, but whether this is the case or not is an empirical question (Sabel
1995, p. 67). Furthermore, the idea of spatial determinants says nothing about the internal
structure of firms or the relations between different firms, although network relations are
sometimes assumed (Saxenian 1994, Castells 1996-98).
This brief expose of writings concerning the organisation of work shows that most of the
parts necessary for building a model has already been developed within different disciplines.
Organisation theory provides us with a picture of the internal of the firm. Formal economic
models, resource dependency theory and research on inter-firm collaborations offer
descriptions of different kinds of relations across the borders of the firm. Aggregate and
integrative models present the scale and scope of the subject, as well as geographically
14
To be of any analytical value, a cluster of organisations must mean something more than merely a huge
number of organisations in a small geographical area, otherwise the concept becomes synonymous to every
larger city. Apart from being involved in similar activities, organisations in a cluster need to be related to each
other in some way. Furthermore, organisations in a cluster should (potentially) share the benefits of certain
collective goods, such as a local labour market of specialised workers.
15
cf Saxenian 1994, Brail 1998 and Fuchs et al 1999, for writings on clusters related to interactive media.
9
placing it in the environment. What is needed is to bring them all together. This is best done
with the aid of division of labour as a unifying concept.
PART III
Division of labour
Clearly, this paper is not the first attempt to address the division of labour. The concept is one
of the oldest in the social sciences and can be traced back to the philosophers of ancient
Greece. Here, it is only possible to broadly sketch its contours. The discussion will be centred
on division of labour as a concept, rather than a theory. Instead of the common discussion
author by author (cf. Giddens 1971, Krause 1982, Laestadius 1992) a thematic outline will be
used. Still, Adam Smith (1776/ 1993), Karl Marx (1844-67/ 1978), Emile Durkheim (1893/
1984) and Max Weber (1922/ 1978) are central figures in any discussion of division of labour.
Focus will be on four questions that are important for using division of labour to build a
model of how work is organised in the production of interactive media. First, how division of
labour is defined, or how it can be understood when it is not. Included here is the relation
between division of labour and specialisation. Second, how division of labour is subdivided,
especially into parts equivalent to social and technical division of labour. Third, the relations
between different functions or actions, that is the integration of labour. Fourth, The role of
ownership of the means of production in determining the division of labour.
Defining the division of labour
Early writers on the division of labour seldom specified what they actually meant by the
concept. Often, the closest one get to a definition is by exemplification, mainly from
manufacture or workshops. Most famous here is Adam Smith’s description of the making of
pins (Smith 1993). From Smith’s description it seems as division of labour simply means
dividing a trade into several different tasks and handing them to different men. Smith does not
make any distinction between specialisation and division of labour and it is questionable if he
saw them as separate things. Marx, who used division of labour as one of the central concepts
in Capital, did not actually specify what he meant by it. But from his description of how
division of labour changes from handicrafts to manufacture one might conclude that he saw
division of labour as the separation of different tasks necessary in the making of certain
commodities. Marx saw an important difference between division of labour and
specialisation. While specialisation is free and natural, (technical) division of labour is pushed
onto the labourer under capitalist production (see more below). In the beginning of his book
on the division of labour in society, Durkheim briefly mentions the area of focus for his work
and thereby gives a clue to what he means by the division of labour: Functions, whether
political, administrative or judical, are becoming more and more specialised. The same is
true in arts and sciences (1997, p. 2). Thus, Durkheim does not make a sharp distinction
between specialisation and division of labour16, a view he shared with Weber. Weber was (as
usual) a bit more clear than Durkheim on what he meant by the division of labour:
“Every type of social action in a group which is oriented to economic considerations and every
associative relationship of economic significance involves to some degree a particular mode of
division and organisation of human services in the interest of production” (1978, p. 114).
Later writers within sociology usually followed this root of not defining division of labour,
treating its meaning as more or less obvious (Rueshmeyer 1981, Krause 1982), before they
16
He had intended to write more on the subject of professionalisation according to the preface to the second
edition (1997, p. xxxi and onwards).
10
more or less stopped writing on the subject (or at least in these terms)17. Neo-classical
economists usually defines division of labour with explicit reference to efficiency, markets
and exchange in line with Adam Smith, for example Stigler (1951).
Dividing division of labour
The most common way to separate the division of labour is into technical and social division
of labour. Technical division of labour usually means the division of tasks within firms, or
smaller units of firms. Social division of labour refers to either the division of labour between
organisations, trades, or professions (or a mixture of those). Adam Smith does not have a
clear distinction between technical and social division of labour. The reason for this can be
found in Smith’s neglect of presenting a clear picture of the firm, which is not strange since
firms as legal bodies where neither as developed nor as institutionalised as they are today18.
Based on Smith’s pin making example and his discussions in relation to his famous statement
that the division of labour is limited by the extent of the market (Smith 1993), a reasonable
interpretation is that he would have viewed social division of labour as the division of labour
between trades. Technical labour would then mean the sub-division of a trade into several
tasks.
Marx followed along these lines, although he added some aspects to it. First of all, he
equated trade with a profession and thereby associating a particular function to a specific
actor. Second, he viewed this social division of labour as the same thing as specialisation,
implying that the carrying out of a trade was an individual choice. Third, Marx claimed that
the different tasks involved in a trade/ performed by a professional naturally belonged
together. Marx viewed technical division of labour as the unnatural sub-division of tasks
under capitalist production. He did not, however, make clear distinctions between vertical and
horizontal division of labour, since his main interest was in the separation between workers
and owners. Marx clearly stated that the technical and social division of labour was a
difference not only in size, but in quality. Durkheim does not make any distinctions, neither
between social and technical division of labour, nor between division of labour and
specialisation (Durkheim was never interested in production per se in the same way as Smith
or Marx).
Max Weber makes a clear separation between technical and social division of labour based
on whether a function is performed within or between different economic units. Important to
note is that by economic units Weber does not mean economic organisations (i.e. firms).
Economic units are formally defined groups of mutually dependent individuals involved in
economic activity (workshops, plants, divisions etc.). Weber also developed the separation of
technical division of labour as vertical and horizontal by discussing how managerial functions
where divided within the economic unit, and whether individual workers where engaged in
technically different functions or specialised tasks (1978, p. 119). In his writings on the
division of labour, Braverman (1974) stays close to Marx, but uses Weber’s distinction
between vertical and horizontal division of labour, especially the separation between hand and
brain he claimed was implemented with Taylor’s scientific management (1911).
17
A literature search reveals this tendency. The annual number of sociological articles regarding the division of
labour has dropped consistently since the early eighties. The only area where there is an increase is in relation to
gender issues (cf. Carter & Keon 1986).
18
Adam Smith’s pin-maker example has lead some people to claim that he was only interested in the technical
division of labour (Smythe & Lo 2000). This is not the case, Smith clearly states that the making of pins is
merely an example of a general economic and social trend (Smith 1993, p. 3-4).
11
Neo-classical economists who where working on the theory of the firm, trying to answer
the question posed by Coase (1937), started using the concept division of labour later on.
They gave it a somewhat different meaning than ‘the classics’, initially relating it to the
borders of the firm. An example of this is Lindbeck & Snower (1997, 2000) who talk of the
division of labour within firms and the division of labour between firms. The former is
concerned with the range of tasks performed by workers within any particular firm, while the
latter deals with the range of products any particular firm produces (Lindbeck & Snower
1997, p. 1).
Relations between actors and functions19
When the labour involved in the making of a function is divided within and between firms, a
vital part becomes how to integrate it again, and under what conditions (Sayer & Walker
1992). Although Smith neglects to specify the relations between the different actors involved
in the making of pins, he says in other parts of his work that workers are usually employed by
a factory owner who specifies how the labour should be integrated (Smith 1993, p. 32). Smith
does not give any examples of how functions that are socially divided (i.e. between trades)
come together into a single product, only how different products are exchanged. This was
basically the view both Marx and Weber had: Within the firm, the integration of labour was
done through authority, while social division of labour was integrated through the ‘anarchic’
market. The difference between the two writers is that Marx saw authority as distinctive for
capitalist production, while Weber claimed it was both a necessary part of any organisation
with a division of labour, and one of its strengths (1978, p. 67). Both writers do, however give
examples of other forms of relations within firms under socialist production20.
Ownership of the means of production
A central question in writings on the division of labour has been ownership over the means of
production and its role in determining what should be produced and how, as well as making
sure this is actually being done. Adam Smith saw it as more or less obvious that the owner of
the means of production (which in his case was most often also the manager) decided what
and how to produce, a view he shared with Marx and Weber (1978, p. 138)21. Important to
note in Marx case, though, is that he contested the ownership of the means of production
under capitalist production. Taylor (1911) would later take this one step further by arguing
that it was not only the right, but the obligation of the owners and managers of firms to decide
upon the organisation of work in detail.
The rise of the professional manager in combination with the institutionalisation of capital
during the 20th century somewhat shifted focus away from the actual owners of the means of
production to those controlling them (Littek & Charles 1995, p. 5). A central question became
how owners could make sure managers acted in their interest (the so-called principal-agent
problem); how managers could make sure workers did what they where supposed to; and
finally how workers resisted these attempts of controlling them. Becker & Murphy (1992)
even claim that the cost of control, and not the size of the market, limits the division of labour.
19
Due to lack of space, the different logics between market- planned- and intermediary economies will not be
discussed under the following headings.
20
They have different views on this topic. While Marx saw socialist production as inevitable, Weber saw it as an
alternative chosen for ethical reasons and with certain inherent costs (Weber 1978, p. 104, 112)
21
Note however Weber’s discussion of the rise of the technocrats in Bureaucracy (1978).
12
Reworking the division of labour
From the brief extracts above, it is roughly possible to see some of the directions the
discussions surrounding division of labour have gone, and that the differences between writers
makes it far from obvious what the concept refers to22. Here, I will give my suggestions on
how division of labour should be used in this case before we move on to building a model to
describe the production of interactive media in part IV. When division of labour is turned
from a theory to a concept, it looses all explanatory value. It can no longer facilitate to answer
why production is organised like it is. But this loss of explanatory power is valuable at one
stage in order to increase clarity on how production is actually organised23. In a sense the
meaning of the concept division of labour is obvious. The problem with the obvious is that
few bother to put it on paper. The definition of division of labour I have chosen to write and
use is:
The division and integration of functions within and between firms involved in the making of
certain goods and services.
Functions should not be understood in a structural-functionalistic sense (Parsons [1937]
1968, Parsons & Smelser 1956). All functions are not necessary for the system. They are
simply considered as parts of the product or service at the moment and hence included. The
word functions can sometimes be replaced with activities, tasks or operations. The reason not
to choose these words are that they somewhat implies distinct (physical) tasks, which
functions need not be.
That a function is performed within a firm means that one or more members of that firm,
usually meaning employees, perform it. This separation between people who are members
and others is vital in all organisations (Ahrne 1994). Thus, work performed by consultants,
free-lancers or hired employees is not done within the hiring firm. At any given moment, a
firm might have several persons working on their premises without being members of the firm
for that matter. It is the juridical firm, which might consist of several organisations (such as
plants, offices et.c.), that is meant here. The increased use of employment agencies in many
sectors of working life makes it necessary to point this out24.
Technical and social division of labour are misleading for several reasons and should be
replaced by division of labour within and between firms. First of all, keeping in mind the
arguments by Weber (1978), Berger & Luckmann (1966), Giddens (1984) and several other
writers about the social aspect in shaping structures, including technical (Bijker et al 1987,
Latour 1991, EC 1999), it is hard to see why one would describe one form of labour as
technical and the other as social. Naturally, no aspect of labour, whether it is within or
between firms is neither totally social nor technical. This does not mean that division of
labour can be constructed in an unlimited variety of ways when there is a scarcity of
resources. Several (if not most) ways to organise production will loose out if there is
competition between alternatives25. Following from this, there is no reason to assume, as
22
If theories on the division of labour are included, the differences increase massively (Rueschmeyer 1986,
Rowlinson 1997).
23
Clearly, any description of the ‘actual’ will be dependent on and influenced by the concept used to define it.
24
In principle, this means that the type of contract between the individual and the organisation determines the
border of an organisation in question (cf. Alchian & Demsetz 1972, Augustsson 2000).
25
Since the market is far from perfect, one should however not assume only one alternative will succeed
(Lennstrand 2001).
13
Marx and Braverman do, that certain labour-configurations are natural, and others are not26.
Furthermore, the distinction between division of labour and specialisation is not helpful. To
include relative freedom of choice, level of skills, or other factors into a description of how
work is organised brings with it normative aspects including both motives, causes and effects
of division of labour that does not help clarify the picture.
Technical division of labour has traditionally been described in vertical and horizontal
dimensions, where an increased vertical division of labour means more levels of authority and
increased horizontal division of labour with fewer tasks to perform for every single employee.
These dimensions still serve a purpose when used properly. However, one should keep in
mind that previous studies that has been influential on later usage of the division of labour in
sociology where mostly focused on routine mass-production in factories, and usually in a
single workshop (Taylor 1911, Blauner 1964, Braverman 1974, Kern & Schumann 1984, cf.
Sandkull & Johansson 2000 for an overview). In these cases, the separations between
different tasks and authority levels are relatively easy to grasp. This means that the division of
labour within different organisational sub-units has sometimes been overestimated, at the
expense of the division of labour between different units (such as sales, manufacturing,
logistics and administration).
To separate different tasks and place them on vertical and horizontal dimensions might not
be that easy when we are talking about division of labour within the whole firm with several
workplaces. This is especially true in firms where a lot of work is performed in projects, work
groups, etc., where the difference between vertical and horizontal division of labour is vague
or at least hard to determine empirically. The formal structure of the firm might still work as a
good starting point, but it is far from a perfect predictor of how labour and authority is
actually divided.
Social division of labour has previously not been divided into a vertical and horizontal
dimension. A reason for this is that the main type of relation acknowledged has been
exchange, exemplified by the contract between buyer and seller on an ideal market. When
social division of labour is exchanged for division of labour between firms, it becomes
apparent that this neglects a range of alternative modes of inter-firm co-ordination that has
been dealt with in other lines of study (cf. part II of this paper, Granovetter 1985, Sayer 1995,
Hage & Alter 1997).
Related to this is the major argument for including integration into the definition of division
of labour. It is a necessary counterpart every time the functions involved in a product or
service gets divided, whether it is within a single firms or not (Weber 1978, Mintzberg 1983,
Abrahamsson & Andersen 2000). Some previous work on division of labour put too much
emphasis on the dividing part of work and too little on the integrative sides (among the
classics, Durkheim is the obvious exception). There are several ways in which the integration
can take place, of which the organisation (ex-ante control) and the market (ex-post) are major,
but not the only, institutions (Coase 1937, Williamson 1985, Powell 1990). The integration of
labour is in fact often identical to the relations between different functions or economic units,
and the words can in some cases (such as between firms occupied in production), but not
always, be used interchangeably. Still, one should not neglect the conflicts of interest inherent
both within and between firms (Perrow 1986).
26
This might in fact work counter Marxist visions of a socialist society by neglecting the possibilities of change.
As Rueschmeyer (1986) and Sayer & Walker (1992) say, some forms of division of labour (between sexes and
ages) is present in any known society, but that does not mean that they are given solutions.
14
Earlier writers more or less assumed that the owner of the means of production could quite
cheaply (or even without cost) decide upon the division of labour within firms in great detail
(and that production would actually work as planned). At the end of the day, ownership is still
what really matters. But as a result of several developments during the 20th century: the
separation between ownership and management; the rise of professional managers; the wider
spread and institutionalisation of capital; cross-ownership and joint-ventures, this is far from
the case in all firms27. On the other hand, as writers from both mainstream economics (such as
agency-theory and TCE) and the leftwing (e.g. labour process- theory) have pointed out, this
does not mean all control is in the hands of management (Fliegstein 1996).
Another tendency is that firms have gained increased knowledge in ways to influence its
environment, including the actions of other organisations. Furthermore, within several
disciplines there is renewed attention given to the role played by institutions in the shaping of
economic life (Meyer & Rowan 1977, North 1990, Powell & DiMaggio 1991, Hodgson 1993,
Brinton & Nee 1998). In a situation like this, it seems unnecessary to start with the
assumption that a particular (or any) individual or group has the ultimate role in the shaping
of the division of labour, either within or between organisations. More interesting for a model
to describe the organisation of work might instead be the ownership structure between firms,
as it is one way of solving the integration of functions.
An aspect of ownership that is seldom referred to in discussions of division of labour are
attempts made by firms to keep control over the output after it is sold, and to limit the
possibility for workers to use knowledge gained in relation to work for their own (or other
firms’) profit. This is important in interactive media production, where the strategic means of
production is the (scarce) knowledge of the workers, and the product can be copied infinitely
at minimal or no cost. As property rights literature points out, standardisation, licenses, rental
contracts and other agreements to restrict others use of bought assets is common.
PART IV
Towards a new model
After having reworked the division of labour, it is now possible to present a model of how
diverse patterns of organisation of work in the production of similar products will look. The
examples used for the two models are taken from the production of interactive media. The
working definition of this used in the MITIOR-project at the National Institute of Working
Life is:
“Interactive media producers develop interactive media products or services for one or more
customers outside the own firm. The products or services are built on digitised information,
integrate several media (sound, vision, video, and/ or text) and make it possible for users to interact
with the information. The platform is online (Internet, intranets) or offline (CD-ROM, DVD,
information kiosks, and so on) or a combination.
The interactive activity can be a part in a firm that also performs other activities. Firms whose
interactive media products are used solely internally for the own firm is not included. Firms that
27
For instance, not even major stock owners in a firm have necessarily immediate access to the plants of that
firm
15
solely publish or distribute the products fall outside the definition as well as firms that develop
general software or hardware for interactive media.”
Based on earlier research and discussions with people active in the field, fifteen different
functions have been defined as central to the production of interactive media (functions A).
To this can be added six other functions that are related, but not considered a central part of
actual production (functions B). Furthermore, there are (at least) another ten functions that
interactive media producers sometimes are involved in (functions C) (see Appendix one for a
complete list). Here, we will only focus on those activities that are considered to be central
parts of the production of interactive media (i.e. A). All of these functions can be performed
either within a single interactive media-producing firm, be out-sourced to sub-contractors or
free-lancers, or performed by the customer themselves. Usually, it is a combination of the
above.
The meaning of some functions might be a bit unclear to people not familiar with the field,
but for the present purpose there is no need to get into what they actually mean. Important to
note, however, is that the functions vary in scope and that most of them can be further subdivided into separate operations. Within firms, these functions are mainly performed by three
groups of employees: project managers, IT- and programmers, design- and content-producers.
Some firms also distinguish strategic consultancy. Besides this, there are other functions
within the firm not directly related to the production of interactive media (management, sales,
support, administration, etc.). What is important to note is that these are classifications of
function, not workers. Hence, the same person might be active in sales, management and ITprogramming, or project management and administration. As in other areas of production, a
smaller number of employees usually means a lower level of division of labour within the
firm (Mintzberg 1983, Aldrich 1999).
The models presented here are stylised versions of how the production of interactive media
might look like. The empirical findings to support these models are so far limited, mainly
based on earlier research (Sandberg 1998, 1999, Sandberg & Bäcklund 2000, Sandberg &
Augustsson 2000) conducyed within the MITIOR-project. To this can be added research in
progress, interviews with managers and branch representatives, preparatory work for an ongoing survey, on-line database searches (Affärsdata, Statistics Sweden, AMS) and extensive
media coverage (both traditional media and on-line). Therefore, the two models should not
(yet) be viewed as a picture of how the production of interactive media actually looks. They
are merely used to present how it can be fruitfully described using the division of labour
within and between firms as a model. They are built on five cases of production, hence the
even percentages.
The main interactive media producer refers to the firms under study in the ongoing survey.
As previously mentioned, geographic distance is not included in the model, merely functional
separation and integration of production. The model is not representative, neither concerning
the size of different firms or the distance between them.
The relations in the model are the relations between the actors performing the functions in
the current production of the interactive media solution. The relations can change both in
terms of which actors they connect, and the form of the relation in terms of dependence. The
arrows in the model points the direction(-s). of the name given to them. Thus, formal
ownership in relation R5 means that the main interactive media producer (F1) is (majority)
owned by an IT-consultant (F6) in 60% of the cases. Arrows in both ends mean that the
16
influence goes both ways (as in joint-ventures, and networks). Dots in both ends signifies that
there is no or little influence
The division of labour within firms is here only described within the main interactive media
producer (since we presently lack knowledge of other actors internal structure). Naturally, this
division of labour exists in the other firms as well. One purpose of the model is to facilitate
studies of the organisation of work on different levels by describing certain areas in greater
detail. Thus, one could in detail examine the internal structure of the audio- and music
producer (F2), or merely state that they perform function A7 – A9 (as is done here).
In reality, there is always a period of fight over which firms will be allowed to take part in
the production of an interactive media solution, what Weber (1978, p.635-40) talked about as
the competitive struggle of the market. The two models here represent the exchange struggle,
that is, after the competitive struggle has been settled and the scene for exchange itself has
started. This explains why there are no competing firms represented in the two models. There
is still competition within the firms present in the production though, since firms have an
interest in performing some functions, but not others.
The first model below is made up of statistical aggregations from on-going studies the
production of interactive media in Sweden. As can be seen from this model, there is a division
of labour within the (main) production firm (F1), as well as several different types of relations
between different firms and the final customer (which in this case is not equivalent to the enduser.). The aggregated version of interactive media production shadows a lot of the inherent
variation. Here, relation R1 is characterised by a mutual dependence type of relation (longterm contracts) but as the number indicates, this is only the case in 40% of the cases. The
distribution of the other 60% of relations differs.
17
F2
F3
(B4)
A7 – A9
R2
R1
F1
R3
F4
F6
Programming.
A1, A3, A4
Design,
Content. A1,
A5, A10-11
Management, adm.
Projekt
management
A1, A14-15
R4
F5
R8
R5
A 13
F7
R6
R7
F8
(C5)
A2, A6
Firms
Dominant sort of relation
F1: Main Interactive Media Producer
F2: Audio- music producer
F3: Server Provider
F4: Customer Organisation
F5: Advertising Agency
F7: IT-consultant
F8: Graphics designer
F9: Hardware Producer
R1: Network Relation, 20%
R2: Mutual independence, 20%
R3: Domination, 20%
R4: Mutual Dependence, 20%
R5: Formal ownership, 60%
R6: Subordination, 40%
R7: Mutual Independence, 80%
R8: Mutual Independence, 60%
Model one: A stylised version of the organisation of work in the production of
interactive media. Based on preliminary analysis of five cases of production of interactive media solutions
within the MITIOR-project.
The main differences that this aggregated model does not show is not different kinds of
relations between firms / economic actors. It is when the actual borders of the firms change,
that is when the functions performed within and between firms differ. This is exemplified
with the next model.
The second model (below) shows the production of a single interactive media solution. As
can be expected from previous discussions regarding the variety in the production of
interactive media, it differs from the aggregated version presented above. There are two kinds
of differences. First, and most obvious, the functions performed within the main firm and the
others included in the model differs. Second, the relations between the firms differ. This is the
case also where the same kinds of functional separation. That is, in both the aggregated model
18
and this single case, there is the same separation for tasks between firm F1 and F2. Still, the
relation between the firms differs. Some of this variation can be accounted for by the kind of
solution presently being produced, the size of the firms and the resources they have, but not
all.
As previously mentioned, there are limits to the possible variations in the organisation of
production. Any given firm is limited first and foremost by the extent of the market. Hence,
focusing one particular function might not be possible if the market is not big enough (Smith
1993). But usually, the constraints for single firms regarding what functions they can perform
themselves is limited by the competence within the firm (Willquist 2001) as well as the
interests of actors. The possibility to accept functions from customers is dependent on the
possibility to either perform them within the firm or find others that are willing to perform
them as sub-contractors. Another important factor is convincing others that you have enough
competence (even if this might not be the case). The production of interactive media shows
several examples of firms who claim to be able to deliver solutions they don’t have either
competence or resources to perform (Uvell 1999). Batt et al (2001) report similar findings
from studies of individual new media workers.
Although it is often assumed, and there are some good reasons to believe that there are (a
number of) fairly stable networks between certain actors in the production of interactive
media solutions, there is so far not much proof of this (except relation R1, model one). One
can see that there are relations of mutual dependence between different actors, but one cannot
tell whether these are recurrent ones and persistent over time. This is because we start with the
solution and ask how it was produced. Network theorists start with the actor and then ask to
whom the actor is related, sometimes without bothering about what the actors actually do
together or what functions the actors in the network performs. When starting from the end
product, the relations between actors is more closely related to the current actual organisation
of work instead of, for instance, networks as basis for learning, innovation and job-search, as
in the networks approach.
There are, however, some limitations with the model as well. First, there is a structural
domination in the model. As initially observed, and shown in the two models here, there is a
variation within the production of interactive media. Thus, every production in reality means
somewhat different functions and relations between actors. And on a larger scale, as the ITrelated industries changes, so do the relations between actors and the functions performed by
different actors (Aldrich & Fiol 1994). Any description is only momentarily true, a snapshot
of the organisation of work. If we are to believe organisational demographers and new
institutionalists, the task of describing the organisation of work will become easier due to
isomorphism and stabilisation of industrial settings. There are certain tendencies in the field
that points in the direction of a stratification with clearer levels of sub-contractors, consultants
and customers. However, due to new technologies (among other things), new variations come
along. An example is a choice several interactive media producers face today regarding
whether they should go into Mobile Internet or not (cf. Fliegstein 1996, Groenvegen &
Vromen 1999 on why institutional development not necessarily leads to isomorphism).
19
F2
F3
(B4)
A7 – A9
R1
R2
F1
R3
F4
F5
F6
A5
Programming.
A3
Design
Content, A12, A6
Management, adm.
A15
Projekt
management
A13-14
R4
A5, A12
R8
R5
A4
R6
R7
F8
(C5)
F7
A2, A1011
Firms
Current relation
F1: Main Interactive Media Producer
F2: Audio- Music Producer
F3: Server Provider
F4: Customer Firm
F5: E-learning Firm
F6: IT-consultant
F7: Graphics Designer
F8: Software Producer
R1: Subordination
R2: Mutual independence
R3: Mutual dependence
R4: Subordination
R5: Formal ownership
R6: Joint Venture
R7: Network relation
R8: Mutual independence
Model two. The organisation of work in the production of a single interactive media
product. Based on one of the five cases presented in model one
All in all, this means that (at the moment) a generalised model of how the production of
interactive media is organised is bound to have a low predictive value. In some cases, one
might be better of simply drawing a model by chance than using the generalised model. If one
is looking for a predictive model, then this one might not be the best buy. But if one wants a
model that is sensitive to diversity between productions and over time, then the model should
be suitable. As knowledge of common combinations of functions in the production of
interactive media increases, the number of functions can be better classified and probably
lowered. A formalisation of functions and organisation of work does not necessarily lead to
the disappearance of variety in production. After all, cars have been built for more than a
hundred years without adopting a unified form of production.
20
A second limitation related to the problem of changes over time is that it takes a lot of
effort to come up with the model. This effort can be divided into three main areas: Finding the
firms active in the production of a certain goods. As was previously argued, the firms do not
equal the traditional definition of an industry. Second, having enough knowledge of the
different functions involved in the making of a product in order to see what sub-units one
should distinguish. In the present work within MITIOR at NIWL, the survey is designed to
find the functions involved, and the most common combinations for different actors, at the
same time as identifying the relevant firms. The functions included here are based on a
preliminary version of the survey. Third, finding relevant parameters to measure the different
kinds of relations between different actors. In our study, we have tried out several different
ways to measure informal and felt dependencies between firms. Here, it is measured by the
question of how a firm would be affected if their sub-contractor/ biggest client stopped
collaborating with them (and vice versa). Formal and economic dependencies are measured
both in terms of cross-ownership and joint-ventures, both as percentage of yearly revenue
performed as sub-contractor/ outsourced. Fourth, getting the relevant information and
processing it.
Concluding remarks
One should not assume certain forms of organisation or relations between actors when there is
limited information regarding how production is organised in a field. Whether, for instance,
production is performed in networks of actors or geographically clustered is an empirical
question and nothing that should be assumed in advance. This is especially important when
there are indications of co-existent variety in the mode of production, both within and
between firms. Still, some form of starting point is necessary to guide research and make
empirical findings analytically manageable. Otherwise, descriptions will merely become
aggregates of single firms with limited analytical value.
A fruitful strategy is to start from the end product or service and ask what functions went
into its making, who performed them, and how they were brought together again. Based on
that, it is possible to build a model that is sensitive to co-existing diversity in production
within and between firms, as well as different relations between actors. Such a model needs to
be built on a well-defined concept that allows the integration of inputs from several fields, as
well as different empirical findings. Division of labour within and between firms meet these
criterions for several reasons. First, it is a basic structural pattern in all forms of organised
production. This means that even if there is little knowledge of how production is actually
organised, one can be sure there will be firms and that there will be some form of division of
labour within and between them. Second, and following from this, since division of labour as
a structural pattern is always present, the model can be kept (although modified) when
knowledge of the research subject increases. Third, division of labour facilitates comparisons
on a number levels, between subjects and over time. Fourth, division of labour is implicitly or
explicitly present in most previous descriptions and theories on the organisation of work. This
makes it possible to build upon and integrate previous insights from a number of different
disciplines.
When applied to preliminary findings from the production of interactive media, the model
is able to describe the inherent variation in the organisation of work, both between
productions and over time. It shows that the functions performed by any firm changes, that the
organisation within firms varies, and that the relations between different actors and firms
change. Thereby, the model gives an alternative and sometimes richer account of how
production is organised than, for instance, network theory and transaction cost economics. A
21
limitation with the model is the effort that goes into its making, which is due to extensive
empirical research on actors, both individuals and firms, as well as the relations between
them. But this is necessary if we aim at creating a detailed description of how production is
actually organised. And I think that it is something worth aiming for since the knowledge of
interactive media production is highly limited. It is certainly better having that knowledge
than guessing (which is sometimes the case today), if we want to say something about what
this ‘new economy’really is and why and how it should be supported.
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APPENDIX ONE: Functions associated to the production of interactive media
The functions are based on previous work and work in progress within the MITIOR-project
and taken from a preliminary survey aimed at Swedish interactive media producers.
Central functions in the production:
A1=Concept, Storyboard, script
A2=Graphical design, web-design, interface design
A3=Programming (HTML, LINGO, etc)
A4=Systems development, databases, programming (JAVA, ASP, etc.)
A5=Content Research
A6=Copy
A7=Sound/ music-production
A8=Video/ film-production
A9=Photo
A10=Animations
A11=Illustrations, Graphics
A12=Acting for sound and vision
A13=Educating customers in relation to the solution
A14=Project-management
A15=Strategic advice (analysis, implementation, evaluation
Associated functions:
B1=Physical production and duplication of CD-ROMs, DVDs, etc
B2=Publishing, marketing and distribution
B3=Publication on the Internet/ a portal
B4=Offer access to server-space, web-hosting
B5=Conduct E-business
B6=Conduct E-learning
Other functions performed by interactive media producers:
C1=Advertising, Public Relations
C2=Publishing in printed media
C3=Graphic production
C4=Design,
C5=Software development
C6=Video, movie and TV-production (including photo)
C7=Audio, music-production
C8=General IT-consulting
C9=General organisation-, management- and business-consulting
C10=General education
29
MITIOR
Media, IT and innovation
in organisation and work
The Mitor project aims at establishing organisational research about interactive media, IT and
IT-related services. The purpose is to investigate possibilities, and contribute to the
development of good and productive jobs and companies within these areas. Aspects such as
competence and working conditions, network organisation and innovation are focused.
A spectrum of IT-companies and IT-jobs in the informational and network society is
investigated within the project, currently especially interactive media producers (companies
developing solutions for the Internet and multimedia), but also web-journalism and to some
extent call centres. The approach is national surveys to management and employees, as well
as case studies. A special study is planned comparing the market and design oriented, smaller
Internet companies in Stockholm city with the often larger, more technology-focussed
companies in the northern suburb of Kist, as well as enhancing synergies between the two
sub-clusters.
All studies are made in dialogue with companies, employees, the parties on the labour market
and government authorities, as well as with an international researcher network. For more
information, see: www.niwl.se/home/sandberg
MITIOR
Arbetslivsinstitutet/ NIWL (K4-4)
S - 112 79 Stockholm
Sweden
30