Levi Strauss & Co. is a privately owned apparel company established in 1853 in San Francisco by Levi Strauss, specializing in the sale of denim overalls and becoming renowned for its denim jeans.
Since its inception, the company has grown tremendously and now has three headquarters located in San Francisco (North America), Brussels (Europe), and Singapore (Asia), and a total staff count of 8,850 employees. The company's growth in the 1960s and 70s was notable, increasing from 16 plants to over 63 worldwide within ten years without any use of union labor. It gained a reputation for taking a strong stance on human rights and advocating against sweatshop production, making it the most organized and strongest company in the industry at the time.
However, as time went on, Levi faced increasing competition from brands producing their products overseas at cheaper prices. Decreased sales l
...ed to the company taking on billions in debt in 1996 and attempting to sell in 2004 with a $2 million outstanding debt. Levi's continued financial struggles did put pressure on management to ease its "human rights-based" approach, potentially sacrificing better profit opportunities for ethical decision-making. It wasn't until 2007 that Levi's saw profitability again since the debt incurred in '96.
Despite Levi Strauss' efforts to maintain ethical behavior both domestically and internationally, criticism has been directed towards the company for inhumane actions they have taken. Levi's must remain consistent in adhering to their self-proclaimed values in order to avoid further backlash. While it is true that Levi Strauss has acted more ethically than other profit-based garment manufacturing companies, the decision to shut down their San Antonia, Texas factory was accompanied by offerings to worker
that exceeded legal requirements, as well as a promise to attempt to find another company to utilize the empty factory.
Levi Strauss' act of paying more than required demonstrates goodwill, as it raises costs and lowers profits - a move most companies avoid in pursuit of profit maximization through cost-cutting. Moreover, the decision to create multinational guidelines for its factories sets the company apart as the first to take such a bold action. Despite this being against profit-maximization goals, Levi Strauss continues to make ethical decisions. For example, they stopped production in China due to human rights abuse and systematic labor mistreatment, going against their own guidelines.
Levi's decision to move overseas to take advantage of cheap Chinese labor and the growing Chinese economy was seen as risky and opposed by Nike. The move would potentially sacrifice long-term profits and jeopardize the company's position as the world's largest clothing company. Making such a decision demonstrated the company's commitment to ethical values over financial gain. Despite this, the pressure to compete in the industry through lower prices left Levi's with no choice but to go abroad, going against their values of defending human rights. When Levi's initially pulled out of China, it made a strong statement of its core human rights values, but ultimately reversed its decision due to a lack of significant improvements in China's human rights record, which violated Levi's human rights values.
Levi's made a mistake by moving back to China, as their customers who boycotted sweatshop-made products would disapprove. This decision was also poorly timed, as Levi's competitors already had a strong hold on the market and won over loyal customers. As a result, the
company lost even more customers and sales declined year after year. Levi's closure of all US plants in 2003 was declared unavoidable by Haas, who admitted that the millions of dollars invested in training and incentives to compete with overseas wage differentials were not enough. All of these missteps were major public relations mistakes.
Despite offering additional benefits and extended notice to their workers as a way of showing care for their employees and assisting them in moving forward in their lives, the news that Levi's has given up on advocating for human rights within the United States is disheartening. The announcement has caused the brand's reputation to suffer in the minds of consumers as they see the company renouncing its values. To combat rising costs, a potential solution is to rebrand the company. Emphasizing its commitment to human rights, Levi's could position itself as a high-priced, American-made brand that represents patriotic values and provides exceptional quality products to consumers. Although some may argue that individuals are reluctant to pay high prices simply because a product is made in the USA, this approach could reinvigorate Levi's branding efforts while still keeping its commitment to human rights front and center.
According to S., the company should take on the responsibility of transforming customers' purchasing behaviors. Instead of investing in plant closures, the company could have implemented a large-scale advertising campaign, similar to the green campaign that promotes ecological improvement and the "eat healthy" campaign used by many food products. This would generate a new trend and attract other companies towards the same direction.
Levi Strauss can become a leader in the new market trend by taking steps
to replace itself. More companies are entering the market, which will attract more customers. The company can establish itself as a national brand by re-branding and positioning itself as a savior for sweatshop employees worldwide. It should focus on being more ethical abroad by setting world-wide guidelines since there are many human rights violations in other countries. As a better option in the industry, any improvements in working conditions will be welcomed. The company can attract better employees and improve production by providing good benefits to constantly mistreated employees.
It is crucial to acknowledge that allowing an eight-year-old to work for minimum wage does not equate to ethical behavior, even if it may be legal. Upholding equitable treatment of all individuals and enforcing ethical standards is imperative. A company should demonstrate ethical conduct not only in its primary market but also across all regions, as strong values result in a robust organization. Additionally, the company must identify its primary objective and possess resilience when confronted with obstacles or stressors while striving towards that goal.
The Body Shop is famous for refusing to test their cosmetics on animals and charging higher prices. Customers value natural products that have not been tested on animals, so they are willing to pay more for them. Nike has faced backlash for poor working conditions but remains popular due to their emphasis on affordable, high-quality products. Unless Nike's customer base changes to prioritize ethics, their business strategy will probably stay the same. Levi Strauss could potentially charge more if they uphold their mission of providing clothing while ensuring worker well-being as a fundamental company value.
To attract more customers, Levi's can provide more benefits
to its employees and prioritize its corporate image to showcase how well it treats them. By standing up for its beliefs, Levi's can attract like-minded individuals and increase its customer base. Publicizing the positive treatment of its employees is acceptable as it can bring in more customers. While negative publicity about employees may not spread beyond a local area, Levi's can make it known to customers that its employees are treated better than at any other competitor company.
Levi's had an opportunity to benefit from Nike's highly scrutinized sweatshop practices by creating an advertisement that would showcase the positive treatment their own employees receive. By positioning themselves as a company that prioritizes the well-being of their workers, Levi's could attract a higher caliber of employees who may have avoided sweatshop conditions in the past. This shift would enable Levi's to maintain their premium prices while providing high-quality clothing that customers would readily accept. Given that brand perception plays a significant role in shopping decisions, many shoppers gravitate toward companies whose beliefs and values align with their own.
Levi Strauss should maintain its corporate strategy and approach in order to serve as a model for its beliefs. While ethics are important to some consumers, in today's individualistic and competitive society, it is not always the primary concern. The most successful corporations are often not the most ethical, with some believing that unethical practices are necessary to thrive. Perceptions of what is ethical vary among individuals and are not always easily discernible.
Amid a world that prizes capitalism and individualism, entities are primarily driven by self-interest, with only legal actions expected of them. Take for instance a public company with
multiple investors who promise ethical treatment for their staff while prioritizing profits. Such a company may appear unethical to investors seeking returns. Therefore, it is crucial for companies to uphold the values they profess regardless of circumstances. Wal-Mart consistently delivers on its promise of low prices, which draws in customers looking for affordability. Similarly, Levi Strauss must always advocate for firms treating employees well if it wants to attract buyers valuing this principle. Any firm contradicting itself risks losing credibility as ethical behavior cannot be self-contradictory.
Levi Strauss, being a clothing company that prioritizes safeguarding human rights, should persist in this mission by securing the protection of its staff. One viable method is establishing a factory in its own country, despite the financial challenges it may incur. In the long-term, Levi Strauss can benefit from this daring action. By taking this initiative, Levi's can make a commendable gesture that would boost its image and garner customer support, as people always admire a hero.
Levi Strauss values prioritizing its employees as this can attract more customers and increase sales.
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