We present a perspective on the interpersonal element of service in which economic and social collaboration takes place in real time: the service encounter. We view it as a site of conflict for power and control where social identities are anchored and collective meanings are constituted and reproduced. Our theoretical underpinning is taken from the Activity Theory (AT) to shed light on the service encounter as a contradictory, political locus of tension between providers and customers (internal and external) in the Higher Education (HE) market.