The Flexible Firm and the Cooperative Subcontracting System in the Steel Industry

Thus far, studies regarding this system are basically from the perspectives of social networks or management practices. I research this system from the perspective of “the flexible firm model”, i.e. from the perspective of employment flexibility and employer’s strategy.

In order to reduce labor cost, to react to uncertainty and volatility in the markets, and to respond to the fast technological and environmental changes, employers apply the flexible employment strategy to divide their workforce into core workers, peripheral workers, and external workers. Different employment practices are applied to separate segments of workers to meet employer’s need for different types of flexibility, such as functional, numerical, time and financial flexibility.