Fissuring the Workplace: The Demise of the Vertically Integrated Corporation

The businesses that Progressives and New Dealers saw as the object of the reform impulse were ones in which managerial authority extended over virtually the entire production process. From Adolph Berle and Gardner Means to Peter Drucker and John Kenneth Galbraith, reform-minded theorists of the corporation saw it as a hierarchical and bureaucratic institution which served as an imaginative template, certainly in terms of regulatory law, labor relations, and public perception. Wagner-era labor law, for example, postulated a pluralistic division of economic power in which “management” committed a large slice of the entire production organization – today we would call this the supply chain - to abide by a contract negotiated between itself and a union or unions representing a majority of the workforce. 

That vertically integrated structure is today largely in eclipse. We live in a world of supply chains, contract production, temp work, franchising, and self-employment. Such corporate disaggregation has subverted the regulatory capacity of the polity. But the global market has not become more potent, depriving even the management of modern firms like Amazon, Walmart, and Nike of the administrative power held by those once at command of General Motors and General Electric. Instead, this paper demonstrates that whatever the legal or corporate form, contemporary supply chains are highly integrated production and service entities which utilize new forms of technology to exercise levels of managerial control that would have been the envy of early 20^th century executives. The erosion of the vertically integrated corporation has therefore created a regime of  “fissured employment,” to use the phrase coined by the contemporary management theorist David Weil, in which executives and the global firms over which they preside have sought to absolve themselves of the legal, labor, and environmental responsibilities that were once thought intrinsic to the managerial function.