Organizing Flexibility: The Flexible Firm in a New Century
| Author | Arne L. Kalleberg |
| Date | 01 December 2001 |
| Published date | 01 December 2001 |
| DOI | http://doi.org/10.1111/1467-8543.00211 |
Organizing Flexibility: The Flexible Firm
in a New Century
Arne L. Kalleberg
Abstract
Research on organizational flexibility should examine the linkages between
numerical and functional flexibility. Unfortunately, studies of each type of
flexibility generally neglect the other. Moreover, the most popular conception
of the interplay between these two forms of flexibility — the core–periphery
model — is incomplete in important ways. I discuss evidence and limitations
of the core–periphery model of the flexible firm, and outline some promising
attempts to conceptualize how organizations may combine functional and
numerical flexibility. I focus mainly on the USA and the UK, though I also
review evidence and issues involved in cross-national differences in organiz-
ational flexibility.
1. Introduction
Social and economic changes in the past quarter-century have underscored
the need for organizations to have greater flexibility in their employment
systems. Observers in all industrial countries regularly emphasize the import-
ance of human resource management practices that enable organizations
to adapt quickly to rapid developments in technology, greater diversity in
labour markets, growing international and price competition in product
markets, and corporate financial restructuring in capital markets. A popular
expression of this concern has been the idea of the ‘flexible firm’, which
denotes the kinds of organizational forms that enable employers to obtain
the flexibility they need.
Researchers have emphasized two distinct strategies of flexible labour
utilization: enhancing employees’ ability to perform a variety of jobs and
participate in decision-making, and reducing costs by limiting workers’
involvement in the organization. These two strategies have been referred to
Arne L. Kalleberg is in the Department of Sociology, University of North Carolina at Chapel
Hill.
British Journal of Industrial Relations
39:4 December 2001 0007–1080 pp. 479–504
#Blackwell Publishers Ltd/London School of Economics 2001. Published by Blackwell Publishers Ltd,
108 Cowley Road, Oxford OX4 1JF, UK and 350 Main Street, Malden, MA 02148, USA.
variously as: functional v. numerical flexibility
1
(Atkinson 1984; Smith 1997;
Hunter et al. 1993), internal v. external flexibility (Cappelli and Neumark
2001), clan v. market (Ouchi 1980), dynamic v. static flexibility (Colclough
and Tolbert 1992; Deyo 1997), and organization-focused v. job-focused
employment relations (Tsui et al. 1995).
Recent research on organizational flexibility has proceeded along two
relatively distinct streams, each focusing on one of these two flexible labour
utilization strategies. The majority of studies emphasize the correlates of
‘high performance work systems’ that are believed to enhance functional or
internal flexibility; the other group examines processes of externalization
designed to reduce costs and provide organizations with numerical flexi-
bility. Unfortunately, relatively few studies have examined the interplay
between functional and numerical flexibility. Consequently, we know com-
paratively little about the relative costs and benefits associated with organ-
izations pursuing one as opposed to the other form of flexibility or a
combination of the two. In particular, insufficient attention has been paid
to whether the benefits to employers of high-performance work systems are
shared with their employees in a ‘win-win’ or ‘mutual gains’ enterprise, or
whether there are disadvantages to one or more parties to attaining func-
tional flexibility.
Those studies that have examined the interrelations between functional
and numerical flexibility in organizations have tended to conceptualize this
relationship primarily in terms of a relatively simple ‘core–periphery’ model
(e.g. Atkinson 1984; Mangum et al. 1985: 599–601; Osterman 1988: 85–89;
Olmsted and Smith 1989; Handy 1990: 87–115). The debate about this core-
periphery model has focused mainly on whether it is an accurate
representation of employers’ labour utilization strategies. This relatively
narrow concern has hindered the development of more refined conceptual-
izations of the varieties of ways in which the two flexible forms of work
organization may be related and of the patterns of conflict and accommo-
dation created by employers’ attempts to balance the advantages and dis-
advantages associated with them.
In this paper I argue that advancing our knowledge of organizational
flexibility depends on our ability to develop models of the relationship
between functional and numerical flexibility, and to specify the conditions
under which an organization will establish various combinations of stand-
ard (i.e. regular, full-time) and non-standard (e.g. part-time, temporary and
contract work) employment relationships. Accomplishing these goals will
facilitate the examination of trade-offs associated with the various labour
utilization strategies and their correlates and consequences for organiz-
ational, worker and industrial relations outcomes.
I first critically evaluate research on each of the two forms of flexibility in
terms of their failure to consider the other. I then review briefly some of the
evidence on the core–periphery model of the flexible firm, and outline some
promising attempts to conceptualize employment systems that overcome
some of its simplistic assumptions about how organizations may combine
480 British Journal of Industrial Relations
#Blackwell Publishers Ltd/London School of Economics 2001.
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