Navigating Embeddedness: Experiences of Indian IT Suppliers and Employees in the Netherlands

Abstract

In this article, we shift the usual analytical attention of the GPN framework from lead firms to suppliers in the network and from production to IT services. Our focus is on how Indian IT suppliers embed in the Netherlands along the threefold characterization of societal, territorial and network embeddedness. We argue that Indian IT suppliers attempt to display societal embeddedness when they move to The Netherlands. Our findings reveal that the endeavour by Indian IT suppliers to territorially dis-embed from the Dutch context is reinforced by their peripheral position in the network and their ability to offshore work in a bid to contain costs, in addition to the influence of client domination. Therefore, territorial embeddedness is considered to be secondary to societal embeddedness which is intertwined with client interest while neglecting the interest of other network members. Nonetheless, the inter-firm relationship is complex, given the tension between societal, territorial and network embeddedness. While preferring Indian IT suppliers because of their low pricing, Dutch clients also insist on compliance with the institutional context of the Netherlands especially when it comes to Dutch employees. This results in hybridization which means that Indian IT suppliers find ways to adhere to the institutional framework for Dutch nationals while simultaneously insulating Indian employees from the same. Consequently, a highly unfair segmented internal labour market develops, with Dutch nationals being treated more favourably as compared to Indian nationals. Nonetheless, to address these violations, Indian employees prefer individual strategies of resilience and rework rather than a collectivization response.

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Notes

  1. 1.

    In this article, we use the terms lead firms and clients synonymously.

  2. 2.

    Object-oriented programming techniques enable programmers to create modules.

  3. 3.

    Distributed programming means putting various steps in business processes at the most efficient places in a network of computers.

  4. 4.

    Under the self-certification scheme, firms employing up to 40 persons are required to provide only a self-certificate regarding compliance with labour laws while those employing 40 or more persons are required to submit a self-certificate duly certified by a chartered accountant (ILO 2014).

  5. 5.

    The Standing Orders Act is a set of rules which pertains to misconducts, dismissal procedures, probation period and notice period to be given at the time of resignation, benefits and protection for workers against unfair treatment or wrongful exactions by the employers.

  6. 6.

    The salary agreed is reduced by a maximum of 30% in return for a reimbursement of expenses. However, the employer is not obliged to pass on the advantage of the 30% rule to the employee. In practice, it is possible for the employer to partially or fully take the benefit.

  7. 7.

    Evidence, typically deriving from an experiment or pilot project, which demonstrates that a design concept, business proposal, etc., is feasible.

  8. 8.

    A change request often arises when the client wants an addition or alteration to the agreed-upon deliverables for a project.

  9. 9.

    The implementation of the EU Directive 77/187/EEC (Transfer of Undertakings (Protection of Employment) Regulations (TUPE) transfer) required the acquirer to not only statutorily absorb those employees whose process is outsourced but also continue the terms and conditions of individual employment contracts after the transfer. This is often termed as rebadging.

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Noronha, E., D’Cruz, P. & Banday, M.U.L. Navigating Embeddedness: Experiences of Indian IT Suppliers and Employees in the Netherlands. J Bus Ethics 164, 95–113 (2020). https://doi.org/10.1007/s10551-018-4071-3

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Keywords

  • Global production networks (GPNs)
  • Embeddedness
  • IT services
  • India
  • Netherlands