Levi Strauss

Only available on StudyMode
  • Download(s) : 274
  • Published : October 7, 2008
Open Document
Text Preview
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...
tracking img