The Social Construction of Global Value Chains; A Case in Pharmaceuticals

The social construction of global value chains; a case in pharmaceuticals.

The focal sector of this study is the pharmaceutical industry, which, in its latest phase of global development, has engaged in ‘internal sourcing’ of research and development (R&D) capability from China. Designed to engender cost effective scientific discovery in highly competitive market circumstances, the relocation of primary discovery functions from ‘West’ to ‘East’ in major pharmaceutical concerns has been associated with the rationalization and disaggregation of international organizational structures and concomitant changes in forms of international staffing. Through invoking the concept of global value chains, a point of departure in this study is to recognise that international chains of production within knowledge- based MNCs are subject to social construction and manifest fundamental power asymmetry. Such a realization would conflict with assumptions derived from economics and international business literature characterizing such internal corporate linkages in primarily transactional terms. Through an empirically based  micro- level analysis conducted in China which brings to the fore issues of culture, ethnicity and language, it is discovered that micro political fault lines underlie the ‘grass roots’ organization of a ‘knowledge based’ international enterprise, and that the ascent of  international value chains from the emerging economy perspective is marked by contestation and ambivalence.

The recognition that the organizational fabric of the MNC is constructed through social relationships, and not merely through impersonal economic transactions, inevitably brings to the fore the significance of human and institutional agents in moulding the social contexts occupied by the MNC. A trajectory of analysis, therefore, which looks ‘inside out’ from the socially constructed international division of labour constituting the MNC is therefore prone to expose the fragilities and fault-lines underlying the globalization process and prompts a rethinking of the more platitudinous notions concerning ‘flatness’ in the global economy..