ABSTRACT
Labour-intensive firms in high wage economies have faced increased competition and domestic market penetration by low cost importers. Its normative resilience among Womens’ and girl’s clothing firms can best be explained in terms of the production flexibility and cost lowering benefits it provides. Firm responses to changing market conditions generally vary in accordance with the nature of the product, size of the firm, relationships with suppliers and vendors, as well as the aforementioned labour market structure. Many firms have sourced the lower value-added garment assembly work to locations in Central America and the Caribbean where wage rates are 40-50 percent of those in the United States. Standardized product market firms, who are more likely to be larger, have focused on unit cost reduction through a mixture of work re-organization and technological innovation. New technology frequently is problematic for managers since they often don’t know how to evaluate it and are suspicious of change that might lead to organizational restructuring.
