Coordinating Digital Transformation

The Discursive Context of Production in the Knowledge Economy

Abstract

This article introduces the concept of the “discursive context of production” in order to explain how the transition to the knowledge economy affects working conditions. Past episodes of economic adjustment saw national institutions in corporatist countries protect working conditions by facilitating coordination between employers and workers in the workplace. Where workers had the capacity to enforce these institutions, they succeeded, for instance, in defending against mass layoffs. Digital transformation, however, has led managers to adopt the market discourse of the knowledge economy, which allows them to dissuade workers from mobilizing. With their mechanisms for enforcement undermined, national institutions are less effective in protecting workers from employer discretion, thereby exposing them to the threat of job loss during economic adjustment. Relying on a case study of mass layoffs at a technology firm in Germany, this article uses process tracing to illustrate how discourse constitutes an important contextual feature that conditions the causal linkage between digital transformation and the ineffectiveness of national institutions. Understanding how digital transformation affects working conditions requires tracing how discursive change in the workplace reconfigures power relations between managers and workers.