LEVIS STRAUSS GLOBALIZATION

AN ORGANIZATIONAL BEHAVIOR CASE STUDY

LEVI STRAUSS, AN INTRODUCTION
Levi Strauss is the worlds largest brand name apparel maker with sales
in more than 110 countries of the world.
Combining direct factories with its licensed factories, it has more than 800
factories in 50 countries.
The company has grown to 11,000 employees around the world.
In Fortune magazines annual poll to determine the most admired
companies, Levis repeatedly earns top place in the 10-company apparel
group.
The company is well known for its corporate social responsibility and has
been recognized and rewarded for its ethical conduct.
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CONTINUED . . .
The company was founded in the 1850s by a European immigrant who
found success by listening to the customer
A value based company drawing on the values of its founder, empathy,
originality, integrity and courage.
The company made a commitment to treat all its global employees
equally.
In 1980s, it became the first company to address HIV-AIDS in its
workplace.
In 1991, it became the first MNC to introduce a code of conduct. The code
was motivated internally by its companys employees.

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VISION AND MISSION
We will conduct our business ethically and demonstrate leadership in
satisfying our responsibilities to our communities and to society. Our work
environment will be safe and productive and characterized by fair treatment,
teamwork, open communications, personal accountability and opportunities
for growth and development.

In other works, the company should not just be profitable but ethical.
It should not only make a profit but also make the world a better place in
which to live.
Management and employees together incorporate the mission and
aspiration statement into daily decisions and actions.
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INTERNAL APPLICATIONS
Its applications range from

open and direct communication,
commitment to diversity,
recognition and related compensation and reward systems
empowerment, and
ethical management practices for ethical behavior by suppliers.

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APPLICATION OF LEVIS ETHICAL VALUES IN
THE INTERNATIONAL ARENA
A incident involving the working conditions of its Saipan contractor caused
Levis management to re-examine its monitoring
A committee of top executives was named to review the companys
dealings with its suppliers.
In 1992, following 3 years of work, guidelines were adopted, covering
employee working conditions, labor relations, environmental impact, and
regular inspection for compliance the first such code adopted by any
MNC.
Following its code, the company terminated business relations with 30
businesses and demanded changes from 120 others around the world.
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GLOBALIZATION PROBLEM

Shortly after this, it was discovered that two factories in Bangladesh were
employing workers under the minimum working age.
The issue of underage labor is a complicated one in Bangladesh - a
country where it is not uncommon for a child (defined as a person
younger than 15) to support an entire family on his or her wages
Further, many children born in Bangladesh are not issued birth certificates
and due to malnutrition, many people can look younger than their age.
Other companies facing the issue of child labor at the time simply
instructed their contractors to fire underage workers.
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LS & COS SOLUTION

LS&CO. management decided to take a different approach one that
would be informed and guided by the companys values: empathy,
originality, integrity and courage.
The factories agreed to continue to pay the already employed underage
workers their salaries and benefits while they attended school.
They offered them full-time jobs when they reached the legal working age.
LS&CO. agreed to pay for the students tuition and books.
If there was no room in the nearby public school, LS&CO. and the
factories would rent space and hire a teacher for the students.
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CONTINUED . . .

The factories also agreed that going forward, their personnel would
require any youth who applies for a job to present a school certificate
stating that the applicant is 15 years old or older
In the event an applicant appears much younger, a dental examination
may be used to establish the workers age.
LS&CO. earned the praise of Bangladeshi and U.S. government officials,
academics and several nongovernmental organizations (NGOs).
Subsequently, the Bangladesh Garment Manufacturers and Exporters
Association along with other groups set aside approximately $1 million for
the education of about 75,000 underage girls who previously worked in
factories.
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OUTCOMES
Responsible commercial success applies not just to the ethical position of
Levis international operations but also to its profitability.
In 1992, following its actions, sales outside the US accounted for 38% of
company revenues- but 53% of profits.
In part, this reflects the connection that consumers make to Levis as an
icon of US styles and attitudes and also as a reputed international brand.
Levis sell for a higher price overseas than in the US due to their strong
international reputation.

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CONCLUSION
Even though globalization can provide an income for people who might
otherwise starve to death, it can also lead to ethical and moral problems
such as child labor, low wages and hazardous working conditions.
While it is not illegal, or unethical, for companies to operate overseas,
they do have an ethical responsibility to deal with ethical dilemmas in a
responsible and socially acceptable manner.
Levi Strauss & Co. has been a leader in corporate social responsibility
and one of the first multi-national companies to develop a code of conduct
for global business ethics
The company continues to demonstrate their values of empathy,
originality, integrity and courage while operating as seen in their efficient
and ethical handling of the child labor situation.
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QUESTIONS.
1. Levi has taken the position that a company should not only be
profitable but should also make the world a better place to live. Do
you agree or disagree with this philosophy? Explain your position.
2. If you were advising the company, what conditions would you set up as
to deal with the problem of child labor?

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THANK YOU
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