This article first reviews the literature on the transition from the Fordist to Post -Fordist industrial system during the last three decades. Particular attention is paid to an important aspect of this transformation, the decline in the degree of the vertical integration of large firms and the rise of subcontracting relations in industrial societies. The role of social institutions and norms in facilitating the formation of such relations is investigated. In the second part, the researcher studies the trends in subcontracting relations among the Iranian manufacturing establishments during 1976-1997. Both the economic and social aspects are looked at in an attempt to explain the very limited nature of such relations.
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