To mitigate youth unemployment and bolster its export-oriented industrialization, Ethiopia attracts foreign direct investment (FDI) to its apparel industry. The employment of low-skilled workers in firms integrated into global value chains (GVC) has brought about a debate regarding whether FDI jobs result in social upgrading for these workers. The existing literature either focuses on one specific labor issue without a holistic analysis of social upgrading or lacks a comparison of workers’ and managers’ understanding of social upgrading. To address this gap, this thesis examines female workers’ and managers’ understanding of social upgrading in foreign-owned apparel factories. This thesis draws on data from 13 managers’ and 11 workers’ interviews and measures social upgrading through the lens of processual and relational well-being. This thesis reveals the conflict between managers’ long-term strategies and female workers’ aspirations for social upgrading, posing a challenge for the Ethiopian government in adapting its public governance to address the ongoing issues. Despite the disadvantaged working conditions, female workers could still use themselves as a labor agency to achieve their ends by starting their businesses. It also shows that managers and workers bring their original countries’ culture into the garment factory, affecting their view on social upgrading. Additionally, the heterogeneity of workers and managers suggests intersectionality is a potential approach to understanding the complexity of social upgrading.