As various forces rendering the business environment more dynamic, organizations nowadays must rapidly correspond to changes in order to survive and prosper. Observing the flexible use of manpower, Atkinson (1987) proposed the flexible firm model and attempted to draw clear demarcation among core, peripheral and external workforces. Such flexible deployment of different workforces are not uncommon in the cooperative subcontracting system in Taiwan¡¦s steel industry (Chang, 2001). In his exploratory research, Chang (2001) discusses the deployment of different workforces in the cooperative subcontracting system, however, the discussion of the relationship between workforce flexibility and organizational performance is neglected. In order to provide a more complete understanding of workforce flexibility, it is important to conduct further research. Hence, this research intends to continue Chang¡¦s research and collect more data to analyze the relationship between workforce flexibility and organizational performance among the China Steel Co.¡¦s subcontractor. Among 183 questionnaires distributed, 118 were collected and 108 were considered effective. The return rate is 59.02%. Analyzing the data, the research discover the following findings: (1) Significant differences on functional flexibility were found among different organizational traits. It is found that subcontractors with more than 3 divisions rated themselves better on the Development of Multi-skill than subcontractors with 3 divisions. (2) Significant differences on numerical flexibility were found among different organizational traits. Subcontractors with capital over 80 million dollars outsource more than subcontractors with capital under 20 million dollars. Engineering subcontractors outsource more than labor subcontractors. (3) Significant differences on wage flexibility were found among different organizational traits. Subcontractors with 60-80% dependence on CSC have more flexible wage design than subcontractors with 20-40%. (4) Significant differences on subjective organizational performance were found among different organizational traits. Subcontractors with capital over 80 million dollars were rated higher on the operational performance than subcontractors with capital under 20 million dollars. Labor subcontractors and cleaning subcontractors were rated higher on production performance more than labor subcontractors. Significant difference on production performance was also found among subcontractor of different numbers of division. Significant difference on customer satisfaction was found among subcontractors of different degree of dependence on CSC and different sizes of capital. Labor and cleaning subcontractors rated higher than engineering subcontractors. (5) Significant differences on objective organizational performance were found concerning organizational traits. Subcontractor of 60-80% dependence on CSC have higher turnover rate than subcontractors of 0-20% dependence. (6) Functional flexibility has significant positive influence on organization performance. Horizontal and vertical transfer has significant positive influence on operation performance and production performance. The development of multi-skill has significant positive influence on production performance. (7) Numerical flexibility has significant influence on organization performance. The higher the proportion of temporary workers, the lower the operation performance. The higher the proportion of temporary workers, the higher the turnover rate. (8) Wage flexibility has significant influence on organizational performance. Flexible wage design has negative significant influence on operational performance and customer satisfaction. Variable wage ratio has positive significant influence on customer satisfaction. Thus far, it is suggested that the cooperative subcontractor can (1) continue enhance measures that promote functional flexibility, (2) consider the skill difference when promoting functional flexibility, (3) hire cooperative skilled engineers or technicians for core workers, (4) implement training programs to help core workers develop multi-skills, (5) analyze business trends and maintain suitable ratio of contingent workers, (6) pay attention to legal issues regarding contingent workers, (7) consider the use of temporary help service (THS) as the substitution of hiring temporary worker by the company itself, (8) carefully evaluate the influence of wage flexibility.

This research focuses on the relationship between workforce flexibility and organizational performance of the cooperative subcontractors in the Steel Industry, and compares the differences between ¡§S¡¨ and China Steel Corporations. The questionnaires were mailed to 161 of the ¡§S¡¨ Steel Co.¡¦s subcontractors and 77 were returned; so the response rate is 48 %. Other 108 data were from survey data of the China Steel Co.¡¦s cooperative subcontractor, which are from my advisor. I deleted the overlapping cooperative subcontractors between the two steel corporations. Total survey size is 181. The results are shown as follows: 1. Deployment of workforce flexibility Characteristics of the functional flexibility of the Cooperative Subcontractors include development of multi-skill, horizontal and vertical mobility. The numerical flexibility is represented by the fact that average 80 percents of temporary workers among all the full time jobs, but there exists substantial difference. 16 percent of the subcontractors contracted out at least part of their jobs. The design of wage structure had flexibility. The ratio of variable wage is about 20 %. The subjective organizational performance was above average. As to the objective organizational performance, the contracting ratio of steel sales was nearly 50 %. The main reason for obtaining the deal were quality, customer satisfaction, delivery speed, and price. The turnover rate on average was not low (nearly 10 %). The reasons for the high turnover rate were the high proportion of temporary workers, and rapid change in demand, but the turnover rate was negatively related to the amount of capital and the number of regular workers. 2. The relationship between the organizational characteristic, the use of workforce flexibility and the performance of organization The different characteristics of organization including the number of divisions, the types of subcontractors, the number of regular workers, and the amount of capital have caused significant differences on the proportion of temporary workers and subcontractors. The smaller the size of regular worker of cooperative subcontractors is, the more likely the use of temporary workers will be. The labor subcontractors were more likely to use temporary workers, but the engineering subcontractors were more likely to outsource. The amount of capital and the dependence of subcontractors upon the steel company caused significant differences on the design of wage flexibility and the proportion of variable wage. The amount of capital of subcontractors has significant impact on the organizational performance, and the turnover rate. The number of regular worker caused significant differences on the operational performance and the turnover rate. The proportion of subcontracting from the steel company caused minor difference on operational performance. These show that the larger the amount of capital, the size of employees, the better the subjective organizational performance; whereas the smaller the organization, the higher the turnover rate. 3. The relationship between the use of workforce flexibility, other influential factors and the performance of organization The functional flexibility and the wage flexibility had positive association with the subjective organizational performance. The horizontal and vertical mobility had positive association with the turnover rate. The numerical flexibility was not associated with the organizational performance, but the proportion of temporary workers has significant positive impact on the turnover rate. The influential factors such as horizontal and vertical mobility, the dependence of subcontractors on the steel corporation, and the flexible wage design would influence the organizational operational performance. The influential factors such as wage flexibility, the amount of capital, and the length of time of cooperation with the steel company will influence the organizational production performance. But the proportion of temporary workers would directly influence the turnover rate.