Levi Strauss & Co. Levi Strauss & Co. is a private clothing company founded in 1853, San Francisco by Levi Strauss. The company started by selling denim overalls and is now well known for its denim jeans.
Since then the company expanded to having three headquarters in San Francisco (North America), Brussels (Europe), and Singapore (Asia) with a staff totaling 8,850 people. The company experienced great growth in the 1960’s and 70’s from having 16 plants to more than 63 worldwide in a period of ten years without any use of union labor.Being known for its strong stance on human rights and being against sweatshop production, it was the strongest and best organized company in the industry. As time passed, Levi was facing more fierce competition from brands producing overseas at much cheaper prices, until it was facing declined sales forcing it to take on a multi billion dollar debt in 1996, and attempting to sell the company in 2004 after a two million dollar debt outstanding.The financial struggles Levis have encountered (2007 was the first profitable year since the debt of ’96) have put pressure on managers to ease on its “human rights-based” management which in some incidents sacrifices better profit opportunities for better human rights decisions.
Although Levi Strauss has always attempted to act ethically at home and abroad, it has fallen short of its goals in some cases as it came under criticism for inhumane actions. Unless Levi’s persists in what it claims it stands for under all conditions, it will continue to come under heavy criticism.Without a doubt Levis Strauss has acted more ethically than most major profit companies- albeit garment manufacturing companies. In closing its San Antonia, Texas factory the company had offered “its workers more than was legally required and promised to try to recruit a new company to use the empty factory.
” This act of paying more than was required is a sign of goodwill as it voluntarily raises the costs on Levi and thus lowers their profits, something most companies would refuse to consider, rather focusing first and foremost on increasing profits by lowering costs.Another sign of Levi Straus’ ethical actions is by deciding to set multinational guidelines for all its factories-the first company to take such a bold action. This move led to further decisions that were not in the best interest of a company with goals, like all non-NPO’s, of profit-maximization. A major consequence and example of such a decision was when Levi Strauss stopped all production in China “because of human rights abuse and systematic mistreatment of labor,” something which violated its multinational guideline.
Due to the fact of cheap Chinese labor and a rising Chinese economy, the move was risky and others, such as Nike, thought it was dumb. The company was the largest clothing company in the world at the time and it was going to sacrifice a lot of profit in the long run, which led many to doubt if it could sustain its position as a leading company in the industry. Such acts are demonstration of the ethical presence in the company values, prioritizing values against the own benefit of more money for the company.Nonetheless, due to the increased pressure to lower prices, the company had no choice but to go abroad in order to compete in the industry, a move that was not performed in agreement with the company values of defending human rights. When Levi’s first pulled out of China it gave a strong statement of its core human right values, leaving cheap labor and a promising future in order to sustain what it has always stood for.The reversal of this decision was in violation of Levi’s human rights values as the “US state Department declared that it had not detected any “appreciable” improvement in China’s human rights record during that period.
” This step should not have been taken, because the customers that “shun products made in sweatshops,” whom Levi’s pride themselves of having, would move away from the company that stood up to what they believed in. Not to mention that the move came after competitors gained a growing market share and retained their share of loyal customers that were not willing to go back to Levi’s.And so Levi’s decision to move back to China came at a detrimental time that would not help but lose further customers, as shown by the declined sales year after year. After closure of all US plants in 2003, Haas declared that closure was inevitable because the millions of dollars of investment in “training and incentives to keep domestic plans competitive enough to offset overseas wage differential” was not enough, a major public relations error.
Despite the extra benefits and extended notice that Levis provided to its workers as a ign of taking care of their employees and helping them move to “the next stage of their lives,” announcing that the company has given up on standing for human rights at home leaves many hopeless. Declaring that they could not fight for what they stood for takes the brands image in customers’ minds further down. An alternate way to deal with increased prices is re-branding. If the company prides itself in standing for human rights, then the company can re-brand itself as a company with higher price, a price for the US workers.The company can be looked at as a true patriotic US brand, for the US people, a value product. Despite allegations that people are no longer willing to pay a premium price just because “it is made in the U.
S. ” the company has a responsibility of changing people’s buying habits. Rather than paying for closing factories, the company could have launched a huge advertisement campaign, similar to the green campaign for a better ecology, and the “eat healthy” campaign passed out by many food products.In doing so they could start a new trend and attract further companies in their direction.
Such a move will re-place Levi Strauss as a leader of the new market trend, and with more companies entering; the growing market will attract more customers. Furthermore, by re-branding itself as a savoir for sweatshop employees around the world, the company can establish itself as a national brand. Being the first to establish world-wide guidelines, the company should focus on this issue by being more ethical abroad.Since there are many human rights violations there, it is easier to be the better option in the industry for workers abroad, as conditions are so bad, any improvements would be welcomed. By establishing itself as a company that provides good benefits to employees that are constantly mistreated, better employees will come in and so improve production.
Just because a company says it’s legal for an eight-year-old to work for minimal wage, doesn’t mean it’s humane. Humans are equal, despite laws that try to contradict that, and standard ethical guidelines should be strictly enforced.Acting ethically as a company is required not only in the lands of the dominant market; it is a statement that a company should adhere on all shores as strong values make a strong company. In addition, the company must decide on what its main goal is, and withstand all pressures and difficulties that accompany that strategy or goal.
For example, The Body Shop has always stood for cosmetic products against animal testing, and although it charges higher prices, people know that what they get are natural products that have been tested without harming animals.And so people are willing to pay for this premium price to “save a life. ” On the other hand, Nike has never been about human rights and improving working conditions, and although it has come under a lot of criticism for the way it treats its workers, Nike has always been about producing quality and intelligent products at a good price. Although many people are well aware of this fact, customers continue to shop at Nike because they know they will get what they’re looking for; a good work-out outfit for a valuable price.Unless activists and people who actually care aren’t the only Nike customers, Nike will continue its strategy, and only law suits have forced it to improve the working conditions of its employees. If Levi Strauss’ mission statement is providing clothes while caring for worker’s conditions, then Levi Strauss can charge a premium as long as it establishes itself as a company that takes care of its employees.
This can be done by providing its employees with more benefits, and keeping the employees at the front of its corporate image, so that people know how well Levi’s treats its employees.Once it takes a stand for something it believes in, others who share the opinion will follow, and customers will increase. And so there is nothing wrong with publicizing how well employees are treated in order to attract customers. Just as a case for mistreating employees did not reach outside San Antonio the case of how well they are treated will not stretch far beyond employees families unless they make it clear to customers that employees in Levi Strauss are treated unlike any other competitor company.
Levi’s could have taken advantage for the heated criticism Nike endured for its sweatshop practices by launching an ad showing how well their employees are treated. Once Levi’s establishes itself as a “caring” company, it will attract better employees who otherwise might not be willing to work in sweatshop-like companies. Thus Levi’s can provide quality clothing and the premium price it charges will be accepted. Customer’s perception of a brand plays a huge role in shopping decisions, and many are attracted to companies that speak for themselves and share the same beliefs.
Levi Strauss should be a model of whatever belief it stands for rather than changing its corporate strategy and approach. In a world of increasing individualism and competitiveness, ethics is not the key issue in consumers mind as much as some would hope. The corporate giants are rarely the most ethical, with some suggesting that in order to succeed in the business world today; you need to play dirty. What’s ethical is not a constant but rather a perception that is different in people’s mind and it is not always clear what’s ethical or not.
In such an extreme capitalistic and individualistic world, one’s own benefit is the major concern of every entity, and nothing more than what is legal is obliged and can be demanded of from anyone. For example, a public company with many investors that claims to act ethically towards its employees at the stake of increased profit might be viewed as unethically denying the investor from the money he believed he’ll get. The essential thing for a company is to stand for the values it claims it speaks for under all conditions.If Wal-Mart promises low prices, customers searching for low prices will always go to Wal-Mart because they get what they are promised. A person that wants to buy clothes from a company that treats its employees better than all competitors should know where to find one, and thus Levi Straus should always be the voice of this value. A company that contradicts itself will lose its company, and nowhere is contradiction an ethical thing.
And since Levi Strauss is a clothing company which focuses on protecting human rights, it should continue to do so by protecting its employees.A good way to do this is by having a company in the homeland. Levi Strauss should consider re-openning domestic factories despite rising costs because it can gain from this risky move in the long run. This could be a good public relations stunt by Levi’s by showing it sacrifices for what it stands for as customers will support their cause- and everyone loves a hero.
Once employees become the focus of the company, it will attract further customers and bolster sales, which is also one of the priorities of Levi Strauss.