Algorithmic Management in the Platform Economy

Authors

  • David Stark Department of Sociology, Columbia University (USA); Centre for Interdisciplinary Methodology, University of Warwick (United Kingdom) https://orcid.org/0000-0003-2435-9619
  • Ivana Pais Università Cattolica del Sacro Cuore (Catholic University of the Sacred Heart), Milan http://orcid.org/0000-0002-5125-8701

DOI:

https://doi.org/10.6092/issn.1971-8853/12221

Keywords:

Algorithmic management, platforms, Taylorism, rankings, organizational forms

Abstract

The platform model is the distinguishing organizational form of the early decades of the twenty-first century. Whereas actors in markets contract, hierarchies command, and networks collaborate, platforms co-opt assets, resources, and activities that are not part of the firm. As a distinctive organizational form, the platform model confronts a distinctive managerial challenge: how to manage value-creating activities that are undertaken on the platform but not in the firm? In a triangular geometry, platform owners co-opt the behavior of providers and users, enrolling them in the practices of algorithmic management without managerial authority having been delegated to them. Acting on their own behalf, the ratings and other activities of providers and consumers are algorithmically translated into rankings and other calculating devices that circulate through feedback loops that are twisted rather than circular. Algorithmic management involves a peculiar kind of cybernetic control because at each fold of the feedback loop accountability can be deflected and denied. Whereas Scientific Management in the early twentieth century offered a legitimating principle for the growth of a new managerial class, algorithmic management in the early twenty-first century is reshaping the managerial class. Its power asymmetries at the organizational level are related to coalitions at the regulatory level in which platform owner and investors are in alliance with platform consumers.

References

Aguiar, L., & Waldfogel, J. (2018). Platforms, Promotion, and Product Discovery: Evidence from Spotify Playlists. National Bureau of Economic Research: No. w24713. Retrieved from: https://www.nber.org/system/files/working_papers/w24713/w24713.pdf

Boltanski L., & Chiapello, E. (1999). Le nouvel esprit du capitalisme. Paris: Gallimard.

Boltanski, L., & Thévenot, L. (1991). De la justification. Les économies de la grandeur. Paris: Gallimard.

Bonini, T., & Gandini, A. (2019). “First Week Is Editorial, Second Week Is Algorithmic”: Platform Gatekeepers and the Platformization of Music Curation. Social Media + Society, 5(4), 1–11. https://doi.org/10.1177%2F2056305119880006

Braverman, H. (1974). Labor and Monopoly Capital: The Degradation of Work in the Twentieth Century. New York: Monthly Review Press.

Bucher, T. (2012). Want to Be on Top? Algorithmic Power and the Threat of Invisibility on Facebook. New Media & Society, 14, 1164–1180. https://doi.org/10.1177/1461444812440159

Caliskan K. (2020). Platform Works as Stack Economization: Cryptocurrency Markets and Exchanges in Perspective. Sociologica, 14(3), 115–142. https://doi.org/10.6092/issn.1971-8853/11746

Callon, M. (2007). Actor-Network Theory. The Market Test. In K. Asdal, B. Brenna & I. Moser (Eds.), Technoscience. The Politics of Interventions (pp. 273–286). Bergen: Fagbokforlaget.

Castelle, M. (2016). Marketplace Platforms or Exchanges? Financial Metaphors for Regulating the Collaborative Economy. Economic Sociology_The European Electronic Newsletter, 17(3), 14–26. https://www.econstor.eu/bitstream/10419/156076/1/vol17-no03-a3.pdf

Culpepper, P.D., & Thelen, K. (2020). Are We All Amazon Primed? Consumers and the Politics of Platform Power. Comparative Political Studies, 53(2), 288–318. https://doi.org/10.1177%2F0010414019852687

Curchod, C., Patriotta, G., Cohen, L., & Neysen, N. (2020). Working for an Algorithm: Power Asymmetries and Agency in Online Work Settings. Administrative Science Quarterly, 65(3), 644–676. https://doi.org/10.1177%2F0001839219867024

Cutolo, D., & Kenney, M. (2020). Platform-Dependent Entrepreneurs: Power Asymmetries, Risks, and Strategies in the Platform Economy. Academy of Management Perspectives. https://doi.org/10.5465/amp.2019.0103 Retrieved from: https://brie.berkeley.edu/sites/default/files/cutolo-kenney_pdes_.pdf

Davies, W. (2020). Post-Liberal Competitions? Pragmatics of Gamification and Weaponization. In D. Stark (Ed.), The Performance Complex: Competition and Competitions in Social Life (pp. 187–207). Oxford: Oxford University Press.

de Kloet, J., Poell, T., Zeng, G., & Chow, Y.F. (2019). The Platformization of Chinese Society: Infrastructure, Governance, and Practice. Chinese Journal of Communication, 12(3), 249–256. https://doi.org/10.1080/17544750.2019.1644008

Delfanti, A. (2019). Machinic Dispossession and Augmented Despotism: Digital Work in an Amazon Warehouse. New Media & Society, 1461444819891613. https://doi.org/10.1177%2F1461444819891613

de Vaan, M., Stark, D., & Vedres, B. (2015). Game Changer: The Topology of Creativity. American Journal of Sociology, 120(4), 1144–1194. https://doi.org/10.1086/681213

DiMaggio, P. (2001) (Ed.). The Twenty-First-Century Firm: Changing Economic Organization in International Perspective. Princeton, NJ: Princeton University Press.

Elert, N., & Henrekson, M. (2017). Entrepreneurship and Institutions: A Bidirectional Relationship. +IFN Working Paper, No. 1153. Stockholm: Research Institute of Industrial Economics (IFN). Retrieved from: http://hdl.handle.net/10419/183382

Enriquez, D. & Vertesi, J. (2020). Managing Algorithms: The Partial Automation of Middle Management and Its Implications for Gig Worker. Unpublished manuscript. Department of Sociology, Princeton University.

Espeland, W. (2020). Formalized Evaluation: The Work That Rankings Do. In D. Stark (Ed.), The Performance Complex: Competition and Competitions in Social Life (pp. 99–122). Oxford: Oxford University Press.

Esposito, E., & Stark, D. (2020). What’s Observed in a Rating? Rankings as Orientation in the Face of Uncertainty. In D. Stark (Ed.), The Performance Complex: Competition and Competitions in Social Life (pp. 123–143). Oxford: Oxford University Press.

Evans, J.A. (2008). Electronic Publication and the Narrowing of Science and Scholarship. Science, 321(5887), 395–399. https://doi.org/10.1126/science.1150473

Foerderer, J., Kude, T., Mithas, S., & Heinzl, A. (2018). Does Platform Owner’s Entry Crowd Out Innovation? Evidence from Google Photos. Information Systems Research, 29(2), 444–460. https://doi.org/10.1287/isre.2018.0787

Frenken, K., & Fuenfschilling, L. (2020). The Rise of Online Platforms and the Triumph of the Corporation. Sociologica, 14(3), 101–113. https://doi.org/10.6092/issn.1971-8853/11715

Gandini, A., Pais, I., & Beraldo, D. (2016). Reputation and Trust on Online Labour Markets: The Reputation Economy of Elance. Work Organisation, Labour and Globalisation, 10(1), 27–43. https://doi.org/10.13169/workorgalaboglob.10.1.0027

Gerlitz, C., & Helmond, A. (2013). “The Like Economy”: Social Buttons and the Data-Intensive Web. New Media & Society, 15(8), 1348–1365. https://doi.org/10.1177%2F1461444812472322

Gillespie, T. (2010). The Politics of “Platforms”. New Media & Society, 12(3), 347–364. https://doi.org/10.1177/1461444809342738

Grabher, G. (2020). Enclosure 4.0: Seizing Data, Selling Predictions, Scaling Platforms. Sociologica, 14(3), 241–265. https://doi.org/10.6092/issn.1971-8853/12107

Grabher, G., & van Tuijl, E. (2020). Uber-Production: From Global Networks to Digital Platforms. Environment and Planning A: Economy and Space, 52(5), 1005–1016. https://doi.org/10.1177%2F0308518X20916507

Grabher. G., & König, J. (2020). Disruption, Embedded. A Polanyian Framing of the Platform Economy. Sociologica, 14(1), 95–118. https://doi.org/10.6092/issn.1971-8853/10443

Griesbach, K., Reich, A., Elliott-Negri, L., & Milkman, R. (2019). Algorithmic Control in Platform Food Delivery Work. Socius, 5. https://doi.org/10.1177/2378023119870041

Helmond, A. (2015). The Platformization of the Web: Making Web Data Platform Ready. Social Media + Society, 1(2). https://doi.org/10.1177/2056305115603080

Huws, U. (2014). Labor in the Global Digital Economy: The Cybertariat Comes of Age. New York: NYU Press.

Jia, L., & Winseck, D. (2018). The Political Economy of Chinese Internet Companies: Financialization, Concentration, and Capitalization. International Communication Gazette, 80(1), 30–59. https://doi.org/10.1177%2F1748048517742783

Karp, H. (2018). As Market Cheers Spotify’s Direct Deal with Artists and Managers, Labels Mull Their Options. Billboard.com, 15 Jun. Retrieved from: https://www.billboard.com/articles/business/8461162/spotify-directdeals-artists-managers-labels-options

Kellogg, K.C., Valentine, M., & Christin, A. (2019). Algorithms at Work: The New Contested Terrain of Control. Academy of Management Annals, 14(1), 366–410. https://doi.org/10.5465/annals.2018.0174

Kenney, M., & Zysman, J. (2016). The Rise of the Platform Economy. Issues in Science and Technology, Spring 2016, 61-69.

Kenney, M., Bearson, D., & Zysman, J. (2020). The Platform Economy Matures: Exploring and Measuring Pervasiveness and Power. BRIE Working Paper, November 2019. http://dx.doi.org/10.2139/ssrn.3497974

Kogut, B., Shan, W., & Walker, G. (1992). The Make-Or-Cooperate Decision in the Context of an Industry Network. In N. Nohria & R.E. Eccles (Eds.), Networks and Organizations (pp. 348–365). Cambridge, MA: Harvard Business School Press.

Kornberger, M., Pflueger, D., & Mouritsen, J. (2017). Evaluative Infrastructures: Accounting for platform organization. Accounting, Organizations and Society, 60, 79–95. http://dx.doi.org/10.1016/j.aos.2017.05.002

Langlois, G., & Elmer, G. (2013). The Research Politics of Social Media Platforms. Culture Machine, 14, 1–17. Retrieved from: http://www.culturemachine.net/index.php/cm/article/viewArticle/505

Latour, B. (1987). Science in Action: How to Follow Scientists and Engineers through Society. Cambridge, MA: Harvard University Press.

Mailand, J., & Driscoll, K. (2017). Minitel: Welcome to the Internet. Cambridge, MA: MIT Press.

Nieborg, D.B., & Poell, T. (2018). The Platformization of Cultural Production: Theorizing the Contingent Cultural Commodity. New Media & Society, 20(11), 4275–4292. https://doi.org/10.1177/1461444818769694

Organisation for Economic Co-operation and Development (OECD). (2009). Two-Sided Markets. Organisation for Economic Co-operation and Development, oecd.org, 17 Dec. Retrieved from: https://www.oecd.org/daf/competition/44445730.pdf

Organisation for Economic Co-operation and Development (OECD). (2020). Combatting COVID-19 Disinformation on Online Platforms. Organisation for Economic Co-operation and Development, oecd.org, 3 Jul. Retrieved from: https://www.oecd.org/coronavirus/policy-responses/combatting-covid-19-disinformation-on-online-platforms-d854ec48/

Orlikowski, W.J., & Scott, S.V. (2014). What Happens When Evaluation Goes Online? Exploring Apparatuses of Valuation in the Travel Sector. Organization Science, 25(3), 868–891. https://doi.org/10.1287/orsc.2013.0877

Peck, J., & Phillips, R. (2020). The Platform Conjuncture. Sociologica, 14(3), 73–99. https://doi.org10.6092/issn.1971-8853/11613

Pelly, L. (2017). Not All Spotify Playlists Are Created Equal. CashMusic.com, 21 Jun. Retrieved from: https://watt.cashmusic.org/writing/thesecretlivesofplaylists

Plantin, J-C., Lagoze, C., Edwards, P.N., & Sandvig, C. (2018). Infrastructure Studies Meet Platform Studies in the Age of Google and Facebook. New Media & Society, 20(1), 293–310. https://doi.org/10.1177%2F1461444816661553

Plantin, J.C., & de Seta, G. (2019). WeChat as Infrastructure: The Techno-Nationalist Shaping of Chinese Digital Platforms. Chinese Journal of Communication, 12(3), 257–273. https://doi.org/10.1080/17544750.2019.1572633

Podolny, J.M., & Page, K.L. (1998). Network Forms of Organization. Annual Review of Sociology, 24(1), 57–76. https://doi.org/10.1146/annurev.soc.24.1.57

Polanyi, K. (1957). The Economy as Instituted Process. In K. Polanyi, C.M. Arensberg & H.W. Pearson (Eds.), Trade and Market in the Early Empires: Economies in History and Theory. New York: Free Press.

Powell, W. (1990). Neither Markets nor Hierarchy: Network Forms of Organization. Research in Organizational Behavior, 12, 295–336.

Prey, R. (2020a). Locating Power in Platformization: Music Streaming Playlists and Curatorial Power. Social Media + Society, 6(3). https://doi.org/10.1177%2F2056305120933291

Prey, R. (2020b). Performing Numbers: Musicians and their Metrics. In D. Stark (Ed.), The Performance Complex. Competition and Competitions in Social Life (pp. 241–259). Oxford: Oxford University Press.

Rahman, H. (2021). Invisible Cages: Understanding Algorithmic Evaluations and their Influence on Workers. Working Paper: Northwestern University.

Rahman, K.S., & Thelen, K. (2019). The Rise of the Platform Business Model and the Transformation of Twenty-First-Century Capitalism. Politics & Society, 47(2), 177–204. https://doi.org/10.1177%2F0032329219838932

Rochet, J.C., & Tirole, J. (2003). Platform Competition in Two-Sided Markets. Journal of the European Economic Association, 1(4), 990–1029. https://doi.org/10.1162/154247603322493212

Rosenblat, A. (2018). Uberland: How Algorithms Are Rewriting the Rules of Work. Oakland: University of California Press.

Sabel, C.F., & Dorf, M.C. (1998). A Constitution of Democratic Experimentalism. Columbia Law Review, 98(2), 267–529. https://scholarship.law.cornell.edu/facpub/120

Schor, J. (2020). After the Gig: How the Sharing Economy Got Hijacked and How to Win It Back. Berkeley: University of California Press.

Scott, S.V., & Orlikowski, W.J. (2012). Reconfiguring Relations of Accountability: Materialization of Social Media in the Travel Sector. Accounting, Organizations and Society, 37(1), 26–40. https://doi.org/10.1016/j.aos.2011.11.005

Shestakovsky, B., & Kelkar, S. (2020). Making Platforms Work: Relationship Labor and the Management of Publics. Theory and Society, 49, 863–896. https://doi.org/10.1007/s11186-020-09407-z

Star, S.L., & Griesemer, J.R. (1989). Institutional Ecology, “Translations” and Boundary Objects: Amateurs and Professionals in Berkeley’s Museum of Vertebrate Zoology, 1907–1939. Social Studies of Science, 19(3), 387–420. https://doi.org/10.1177%2F030631289019003001

Stark, D. (1980). Class Struggle and the Transformation of the Labor Process: A Relational Approach. Theory and Society, 9(1), 89-130. https://doi.org/10.1007/BF00158894

Stark, D. (1986). Rethinking Internal Labor Markets: New Insights from a Comparative Perspective. American Sociological Review, 51(4), 492–504. https://doi.org/10.2307/2095583

Stark, D. (2001). Ambiguous Assets for Uncertain Environments: Heterarchy in Postsocialist Firms. In P. DiMaggio (Ed.), The Twenty-First-Century Firm: Changing Economic Organization in International Perspective. Princeton, NJ: Princeton University Press.

Stark, D. (2009). The Sense of Dissonance: Accounts of Worth in Economic Life. New York & London: Princeton University Press.

Stark, D. (2011). What’s Valuable? In J. Beckert & P. Aspers (Eds.), The Worth of Goods: Valuation and Pricing in the Economy (pp. 319–338). Oxford: Oxford University Press.

Stark, D. (2020). The Performance Complex. In D. Stark (Ed.), The Performance Complex: Competition and Competitions in Social Life (pp. 1–30). Oxford: Oxford University Press.

Stark, D., & Warner, N. (2013). This Place, These People: Life and Shadow on the Great Plains. New York: Columbia University Press.

Thelen, K. (2018). Regulating Uber: The Politics of the Platform Economy in Europe and the United States. Perspectives on Politics, 16(4), 938–953. https://doi.org/10.1017/S1537592718001081

Thévenot, L. (2006). L'action au pluriel: sociologie des régimes d'engagement. Paris: Éd. La Découverte.

Vallas, S.P. & Schor, J.B. (2020). What Do Platforms Do? Understanding the Gig Economy. Annual Review of Sociology, 46, 273–294. https://doi.org/10.1146/annurev-soc-121919-054857

Vallas, S.P., & Kovalainen, A. (Eds.) (2019). Work and Labor in the Digital Age, Vol: 33. Bingley: Emerald Publishing.

van Dijk, J., Poell, T, & de Waal, M. (2019). The Platform Society: Public Values in a Connective World. Oxford: Oxford University Press.

van Doorn, N. (2020). A New Institution on the Block: On Platform Urbanism and Airbnb Citizenship. New Media & Society, 22(10), 1808–1826. https://doi.org/10.1177%2F1461444819884377

Velthuis, O., & van Doorn, N. (2020). Weathering Winner-Take-All: How Rankings Constitute Competition on Webcam Sex Platforms, and What Performers Can Do About It. In D. Stark (Ed.), The Performance Complex: Competition and Competitions in Social Life (pp. 167–186). Oxford: Oxford University Press.

Vertesi, J., Goldstein, A., Enriquez, D., Liu, L., & Miller, K.T. (2020). Pre-Automation: Insourcing and Automating the Gig Economy. Sociologica, 14(3), 167–193. https://doi.org/10.6092/issn.1971-8853/11657

Wang, R.D., & Miller, C.D. (2020). Complementors' Engagement in an Ecosystem: A Study of Publishers' E‐Book Offerings on Amazon Kindle. Strategic Management Journal, 41(1), 3–26. https://doi.org/10.1002/smj.3076

Watkins E. (2020). The Polysemia of Recognition: Facial Recognition in Algorithmic Management. Phd Dissertation, Columbia University.

Watkins, E.A., & Stark, D. (2018). The Möbius Organizational Form: Make, Buy, Cooperate, or Co-opt?. Sociologica, 12(1), 65–80. https://doi.org/10.6092/issn.1971-8853/8364

Weissenbach, A.S. (2020). Competition as Field-Builder: Engineering Life at the international Genetically Engineered Machine (iGEM) Competition. Unpublished manuscript, Department of Sociology, Columbia University.

Williamson, O.E. (1996). The Mechanisms of Governance. Oxford: Oxford University Press.

Woodcock, J. (2020). The Algorithmic Panopticon at Deliveroo: Measurement, Precarity, and the Illusion of Control. Ephemera: Theory & Politics in Organization, 20(3), 67–95. https://www.jamiewoodcock.net/blog/the-algorithmic-panopticon-at-deliveroo/

Downloads

Published

2021-01-29

How to Cite

Stark, D., & Pais, I. (2021). Algorithmic Management in the Platform Economy. Sociologica, 14(3), 47-72. https://doi.org/10.6092/issn.1971-8853/12221