Automotive

ThomasM
[PuristS]
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A common point of view and one that seems to make intuitive sense, but...

like in most things, especially in the area of generalizations, not necessarily a truism.

Many management gurus have already pointed out the dangers of short sighted profit maximization at the expense of "quality" (which of course needs to be defined, and then applied in a specific situation)

For me, it's a philosophical decision, which reveals the character and philosophy of the owners and company.  But of course, specific products are also the result of specific individuals and the production processes and specific parts for the day / period a specific product is produced.

As a consumer, I am often as guided by my perception of this "philosophy" as I am by the actual product itself. Stretched, this also can result in brand fan boyism...which I define as blind loyalty to a brand even if the specific results, whether they be goods or services, don't live up to the "promise" (and price premiums!) of that brand's products.

Most rationalist economists will say "phooey" and blah blah to all this; management decisions are rational.

If you are a brand owner with significant soft equity and premiums in brand reputation, it would behoove you to protect that brand equity, and not expose your brand equity to risk by allowing too much quality creep in the pursuit of lower cost production.

You also mention unions and cheap labour; I'm curious - do you believe in some magical "minimum wage" which is the baseline for a "minimally quality of life standard?" (this is slippery slope topic, of course; where does destitution vs "living wage" standards end and "luxury lifestyle" begin. Like art, I don't know, but I (in gross examples, know it when I see it.)

What owner would not want to pursue efficiency? (another word for lowering costs, or the flip side of a multi variable equation, increasing quality and / or performance while maintaining costs)

Is the priority to (solely) increase profits or to share the efficiencies in lower prices to the consumer while maintaining or increasing quality and performance?

Me'thinks it's not so simple...

Cheers,

TM