Work Decentralisation from Large to Small Firms: A Preliminary Analysis of Subcontracting

This paper is a preliminary review of small firm subcontracting. It is argued that increasingly subcontracting and other forms of small firm activities are becoming a central part of the operations of large firms. As a result, small firms have to be viewed as central elements in the economy. In this paper three issues are reviewed as a prerequisite to empirical research. First, an outline is presented of theoretical proposals on interfirm linkages. Second, the nature of subcontracting is outlined. The paper concludes with a categorisation of different ways in which subcontracting relations are formed.