Evaluate the following statement: Due to changes in the environment of business and labor relations since the early 1970s, U.S. business can no longer afford to rely on traditional mass manufacturing methods of management. How has the environment changed and what challenges do these changes pose for the future?

Question

What will be an ideal response?

Answer 1

Up until around 1974, U.S. manufacturers dominated both the U.S. and world economies. Monopoly profits in the hands of a few large firms were used to support generous wages and benefits in union contracts. Union workers enjoyed an increasing standard of living. With the advent of globalization, however, competition in domestic and international markets increased and employers found their profit margins shrinking. This, in turn, put downward pressure on wages and benefits as well as pressure on jobs. Traditional mass manufacturing methods were not nimble enough to change to a much more diversified in consumer market that valued quality and differentiation over standardization and low price. Today's companies need greater flexibility, higher quality, as well as an ability to maintain lower costs. U.S. firms can no longer compete with low way countries in providing low cost, cheap, standardized products and are turning to higher quality, innovative products which are not amenable to a mass production environment. Hence, work organization in the U.S. must also adapt.