Internal - External Labour Market Interplay

As we are going to analyze more in deep in this chapter, the concept of flexibility started to assume a great importance with the shift from a Taylor-Fordist paradigm of production, based on mass production and standardized goods, to a new paradigm, more customer oriented, based on just-in-time production system, which is more adaptable to economic cycles and fluctuations.
Flexibility developed and became one of the key concepts to better understand changes in both internal and external labour markets and their interplay and became embedded with the arising concept of globalization.
According to Doeringer and Piore, when referring to the external labour market, one implies that pricing, allocation of resources and training decisions are controlled directly by economic variables.
In the context of specific firms the external labour market "represents the available stock of labour".
Many scholars, as Banner, think that the external labour market is highly associated with globalization, phenomenon that is deep rooted and symbolic of technological changes, the deregulation of economic activity by governments and the increasing global integration of production, which "led to a very unpredictable nature of work, and increased inequality in pay, as well as great employment uncertainty for many individuals".
As mentioned in the work of Grimshaw and Rubery, it is believed that there is a certain degree of inability in the "new" institutional approach to embed internal labour markets within "external labour markets environment".
Furthermore, Sengenberger mentioned that the significance of the external labour market its the social norms are "indeed influencing the design of internal labour markets" and this is "primary evident through comparative research, which has identified the influence of different institutional arrangements including education and training systems, trade union organization, gender relations and legal systems". [...]