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Management strategy: experience curve, Reebok standards, relationship-based governance system

Answers must be detailed and in paragraph format for each. Give sources, if possible.

I. Discuss the pros and cons of management's using the experience curve to determine strategy.

II. Reebok has production standards of human rights for its suppliers. What would Milton Friedman say? Contrast his view with Archie Carroll's view.

III. Are people living in a relationship-based governance system likely to be ethical or unethical in their business dealings? Explain your answer.

Solution Preview

I. Discuss the pros and cons of management's using the experience curve to determine strategy.

The pros of a management using the experience curve are that network building becomes easier and cost reductions can be introduced early this leads to strategic advantage. Experience curve helps improve the value and shared experience. Moreover, using the experience curve leads to improved use of plant and equipment because the total production increases. Finally, as the company gains experience it can change its resource mix. Fundamental advantages to a firm using experience curve emanates from workers learning short-cuts and improvements. This leads to improvement in production process, greater specialization and standardization.

The cons of management using the experience curve are: These trigger off price cutting. Moreover, like the strategies of Texas Instruments, these strategies focus on products rather than customer value. The use of experience curve makes the company less flexible and responsive to market needs. Finally there is competition among the key ...

Solution Summary

The cited solution give a full two paragraphs in response to each question. There is a good comparison between the views of Milton Friedman and Archie Carroll.

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