By now, the observation that firms and trade unions today face markets that are much more volatile than they used to be has become largely a commonplace. Almost equally commonplace is the view that, in order to react to this greater volatility, a growing number of firms have been obliged to abandon, or at least to alter substantially, their productive and organizational strategies (in particular, the mass production of standard goods by means of specialized and rigid machinery operated by semiskilled workers) – strategies which presupposed stability. For these firms, adjustment to changed economic conditions has entailed first and foremost increased flexibility – that is, the ability to use machines and workers in different combinations in order to adapt to changing market conditions. Unions, too, have had to adjust, and they have sometimes discovered in the process that participation in the management of flexibility offers them new opportunities to regain the institutional authority over workers that they had lost.

FLEXIBILITY AND DIVERSIFICATION

Indeed, the breakup of mass markets and constant shifts in the level and composition of demand are general, almost universal, phenomena today. The assertion that firms must cope with more volatile markets is, as I have said, by now a commonplace and one widespread in the business literature. One might even say that there is a broad consensus that it is now impossible to forecast demand by means of market research. The successes or failures of new products are today practically the only available indicators of what the market can absorb.