Levi Strauss & Co. and China
Uploaded by mubles on Dec 08, 2006
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.
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...