Promotions-Projekt: Economic and Social Upgrading in the Central Eastern European IT Services and Business Process Outsourcing Industry

Fabian Mehl (Research Associate, HWR Berlin)
Supervisors: Prof. Dr. Martin Krzywdzinski (Helmut-Schmidt-Universität/Universität der Bundeswehr Hamburg; Wissenschaftszentrum Berlin), Prof. Dr. Christina Teipen (HWR Berlin)


The dissertation project deals with the organization and control of the labour process in the global IT and business process outsourcing (BPO) services value chain. It aims at analysing how the restructuring of multinational enterprises affects labour relations and working conditions at service suppliers and corporate departments. Offshoring to Central Eastern Europe (CEE) is chosen as a case study since the region plays an important role as a ‘back office’ for German and Western European companies. The dissertation will assess the opportunities and risks that arise for target countries in terms of upgrading strategies through the integration into global IT and BPO services value chains. Placing emphasis on the organisation of work processes will be crucial to gain a better understanding of how value chain restructuring in the sector affects the working conditions of employees and the system of labour relations at firm level. Drawing on insights from labour process theory, it will be assumed that social upgrading (or downgrading) dynamics are the outcome of intra- and inter-firm conflicts over the control of the labour process, both between management and employees and between service providers and their clients.

Against the background of increasing standardization and automation of digital work processes, it is assumed that IT and BPO services will continue to gain in importance. From a macroeconomic perspective, integration into global IT and BPO value chains appears attractive for many countries, as this is associated with the hope of creating relatively well-paid jobs for higher-skilled employees. However, since the industry is usually highly dependent on foreign markets and strategic decisions of foreign corporations, there are also numerous risks with regard to economic and social upgrading processes. CEE countries have integrated strongly into regional and global production networks in recent years, but have not yet managed to emancipate themselves from the dominance of foreign multinationals or to establish themselves more firmly in segments associated with higher value added. Against the backdrop of current political developments in the region and the possible re-organization of global IT and BPO services value chains as a consequence of the Covid-19 pandemic and further automation, the question arises to which extent this "dependent" economic development reinforces inequality within Europe and contributes to social conflict dynamics.

For carrying out the empirical part of the dissertation, a qualitative case study design will be applied. It will entail an in-depth study of one or more companies, investigating the organizational restructuring dynamics between clients and suppliers and its impact on working conditions. For this purpose, representatives of the management and the employees will be interviewed (by means of semi-structured interviews), both from the company headquarters and the service providers. The qualitative case study will be complemented by extensive literature and document studies as well as expert interviews and analysis of macroeconomic data.