The `Flexible Firm': Fixation or Fact?

Abstract

The model of the `flexible firm' has gained a prominent role in shaping debate about labour market flexibility and employment restructuring in the 1980s. It argues that employers are increasingly segmenting their workers between a permanent `core' of full-time employees, and a `periphery' of part-time, temporary, subcontract and `outsourced' workers. The `core' provides `functional flexibility' through lowered job demarcations and multi-skilling, while the `periphery' provides `numerical flexibility'. This paper argues that these generalisations are based on very selective cases, and reviews evidence which shows that restructuring follows far more complex and uneven lines than this polarisation, which if anything is better reflected in the public sector, which the model omits. The `flexible firm' conflates employment developments due to sectoral restructuring, with `new' `manpower policies', masking the importance of continuities and qualitative changes within these. While registering the increasing vulnerability of many workers, the model fails to note that for many, this is not `new', nor that the dynamic of the eighties is attacking the strength of all workers, including the so-called `core'. Conceptually, the notion of `core' and `periphery' is confused, circular and value laden. The model is criticised for blurring description, prediction and prescription in an ambiguous futurology which slips between research reportage and `best practice' policy. Even here it is ambiguous, and dubious from management's own point of view. Finally, its concern with labour market flexibility is set within the current international climate of neo-classical revival, and the model's institutional interface between Government labour market polices and `leading edge' firms.