Levi Strauss & Co. was founded in 1853 by Levi Strauss. LS&CO. was known for their sturdy canvas trousers – the first jeans invented. They are considered the original jeans and by the last half of the twentieth century their jeans had become a symbol of American values. Until 1971 LS&CO. was a private company. After they went public, the Haas family retained a significant amount of the stock. Robert D. Haas became president and chairman of the board in 1984. In 1985 publicly held shares were repurchased by certain descendants of Levi Straus’s family and by 1993 95% of the company’s stock was held by Levi Strauss’ descendants and other certain non-family members.
One important concern of LS&CO. was protecting its brand name. Levi’s is one of the most recognized consumer brand names in the world, and its trademark, Levi’s, is registered in more than 150 countries. Their international sales accounted for 53% of pretax profits and 37% of total revenues in 1992. 45% of their apparel sold in the United States was made overseas, 60% coming from contractors in Central America, South America and Mexico, and 40% coming from Asia.
Within the company there was a high regard for the employees and the communities where they lived and worked. The company’s mission was to “consistently meet or exceed the legal, ethical, commercial, and other expectations that society has of business.” Ethics was to be a ground rule and not just a factor in decision making, and the “principled reasoning approach” was adopted to help solve problems by using an ethical process.
The Research paper on Levi’s Strauss: a case study from an organizational plan point of view
... the planet. The business found by the Strauss family in 1875, initially manufactured jeans for miners out of tent fabric and canvas. ... and its segmentation, product range of competitors and what the company may want to do about it. Decision: From the ... The implementation process of the organisational plan drawn up by Levi involved implementing its various quantitative and behavorial reseach findings ...
A 12-person Sourcing Guidelines Working Group (SGWG) was set up in 1991 after several managers suspected that the business practices employed by some of LS&CO.’s overseas contractors was not consistent with the company’s values. The goal of the SGWG was to determine what standards the company should expect of its contractors worldwide.
The SGWG, in March 1992, had developed the Business Partner Terms of Engagement and the Guidelines for Country Selection, which was designed to establish standards for the contractors in the areas of worker health and safety, employment practices, ethics, the environment, and human rights. They set out to inform contractors and employees worldwide about the guidelines, and if contractors did not abide by the agreed deadline their relationship with LS&CO. would be terminated. Most contractors were receptive to making improvements and following the guidelines.
The guidelines focus on a country’s impact on brand image, political or social instability that could threaten Levi’s interests, the health and safety of company employees, and human rights abuses. Violations of any or all of these guidelines can mean the cutting off of all business relationships in a particular country. Levi’s had taken actions against other business partners when their standards were not being met. The company withdrew from Saipan because the contractor’s practices did not conform to the company’s new guidelines.
The major issue with contractors overseas and LS&CO. lies in China. China’s human rights record was considered among the worst in the world; their human rights violations were severe and political rights and civil liberties were nonexistent. The three areas of greatest concern by human rights groups were the legal process, expression and association, and prison labor. Their trials often went against international standards of due process and fair-trial procedures. Freedom of expression and association were severely restricted and there was still discrimination based on sex, ethnicity, and religion in the areas of jobs, education, and housing. There was a network of government “reeducation” camps where political and other offenders were forced to work in dangerous conditions with little or no pay. China had denied any of these reports made by the U.S. State Department on the matter.
Nutrition Company Business Plan
Executive summary: Bharat Food Science Nutritionals is a company which is in the market for 30 years and has been providing the highest quality formulations in Nutritional Supplement Industry for both human and animal needs. Main objective is to provide Humans with required nutritional supplements and make them healthier and more productive. It is known that low socio-economics groups just eat ...
Levi Strauss wanted to be consistent with their mission and standards. They came across the ethical dilemma of whether or not to continuing using contractors in a country that goes against the company’s core ethical values – China. Between November 1992 and February 1993 CPG members had met five times. For 19 days they analyzed the situation and decided that subcontracting in China had to be phased out. They knew that their proposal had to be consistent with LS&CO.’s ethical principles of honesty, promise-keeping, fairness, respect for others, compassion, and integrity. 2 out of the 12 members of the CPG had argued that in accordance with LS&CO.’s published guidelines the company should begin a five-year phase-out of contracting with China. Also, LS&CO. should refuse to do business with contractors outside China owned by the Chinese Central government, and suspend direct investment in China until there was a serious improvement in human rights. The remaining 10 members believed that the company should continue to source in China under the conditions that the contractors were monitored more thoroughly and frequently, also that LS&CO. did not do business with contractors owned by the Chinese Central government or the military, and that there are mandatory and optional conditions for direct investment in China.
While many other companies believed that an American presence in China would eventually improve the situation, Levi Strauss did not. The company had decided to end much of its business dealings in China because of “pervasive human rights abuses.” They would “stop doing business with any contractors in China owned by the Central government or the military as soon as possible, not initiate business with new contractors, transfer work being done in China to other locations when costs and delivery considerations were not substantially different, and withdraw all remaining sewing and finishing work in an orderly way based on a plan to be developed by the company’s sourcing organization.”
The Research paper on Discuss the issue Ethical Business and How it relates to csr
Discuss the issue Ethical Business and how it relates to Corporate Social Responsibility (CSR). With reference to sources, provide examples of companies or organisations which demonstrate ethical behaviour and evaluate their motivation. The ideas of Business Ethics and Corporate Social Responsibility are oftentimes discussed in a similar manner even though they both have distinctly different ...
Levi’s decision could be seen as a publicity stunt in order to create a better image and increase their sales and it is hard for people to believe that this decision was made based only on ethical decision making. China had only represented 10% of LS&CO.’s total Asian contracting, and although it is a small percent it would not be easy for the company to find alternative contractors with reasonable prices. That is only the short-term problem. Levi’s may have sacrificed a great deal in the long run. With China being the world’s fastest growing economy, a great business opportunity was passed up by Levi’s in order to maintain their ethical standards. It will be hard for Levi’s to compete with other brands because of the stiff tariffs on imported apparel. Also, counterfeiting of Levi’s products could become worse without the company having a manufacturing presence in the country.
As a privately held company they believed that they could not operate in China without compromising their values and ethical standards, so they withdrew. Levi’s is definitely a company that has gone against the grain, and done what many other American companies would not do.
