I. Flexibility: Concept, types and model
D. The flexible firm model
The flexible firm model enjoyed immediate success as an instrument of popular business analysis. Its emergence led to a school of comment which predicted the systematic adoption of flexible working as a strategic goal for companies. However, the model has been subject to much criticism in the academic literature over the past decade and numerous weaknesses and deficiencies have been pinpointed by a range of authors (see for example Pollert, 1987, 1988a, 1988b; Elger, 1991; Blyton and Morris, 1991; Brewster et al., 1994; Morley and Gunnigle, 1994). The criticisms revolve around a number of limitations.
First, the claim to novelty in the core-periphery model of the flexible firm. This model is arguably no more than a rediscovery by the managerial literature of earlier literature associated with labour market segmentation analysis and the idea of non-competing groups. Second, it is argued that the development of a core-periphery workforce is not due to a desire on management's part to increase flexibility but is instead an effort to exercise control over labour. Third, the model may divert attention away from long-term training needs by providing an excuse to move workers out to the periphery, thus negatively affecting the development of skills within an economy. Fourth, the model ignores gender segmentation, and Pollert (1988) suggests that the construction of a core workforce is partly due to the male domination of certain activities which exclude women. Fifth, the application of the policy prescriptions arising from the model may create more problems than it solves. For example, there can be an increase in the complexity of the employment relationship with consequent problems for the management of that relationship. Another example can arise where redundancies are occurring and workers are simultaneously being employed on a subcontracted basis (Keenan and Thom, 1988). The Cranfield School of Management (1996), in their report for the Cranfield study, note that employee commitment may be affected, with employees reciprocating what they may feel is a reduced commitment from the organization . The lack of promotion prospects may cause employee resentment and an increase in the turnover of key staff as, instead of being able to rely on an internal labour market for promotion, they play the external labour market in search of career advancement.
Procter et al. (1994), in arguably the most significant defence of the flexible firm model accepts in part, the validity of a number of those criticisms but consider that the model still has utility. They argue that the flexible firm is "in the main 'description' providing the framework within which changes in working practices can be observed. Associated with this is a certain amount of 'prediction' that the trends observed were likely to continue into the future. 'Prescription' is less easy to discern." (Procter et al., 1994, pp. 226-227). They also argue that for the flexible firm model to have utility there is no need to concede that an integrated strategic approach is essential. For them, the flexible firm model is a modest tool of analysis which merely serves to identify trends and tendencies rather than an overall transformation of the way in which labour is deployed. Thus this defence of the model accepts that flexibility is unlikely to be mutually beneficial to both capital and labour.