"but the fact that it takes years for the effect of reduced quality to become obvious: in the short term, consumer confidence in the brand is still high," The only thing I'd point out is that the two are related. Sears had this policy for a very long time and so it slowly becomes an established fact. That's why you can make the cost savings change and show new profits for a quarter, 2 quarters, maybe even a year or two. Most likely the "smart person" who made that decision gets promoted onto another group that needs better margins. Then the wheels come off but the exec is long gone onto something else.