Effect of Cheap Labor & Competition on Levi Strauss

Levi Strauss operates in a highly competitive business environment. We are asked to consider how a company with high ethical values can survive in an industry in which many global brands are taking advantage of cheap labor and in some cases child labor to produce jeans and other clothing at low prices. Levi Strauss (Levis) has had to find way to balance its business ethics with business necessity. The company has done an admirable job to the extent that it has not ignored the core values of the company, and it has worked with suppliers to ensure that even if pay and working conditions are not what Levis would expect at a manufacturing facility in the United States, that certain accommodations are made by the foreign supplier. For example, Levis refuses to purchase products manufactured by the exploitation of child labor. However, Levis does not want these children tossed into the street to become destitute and penniless. Levis recognizes that in this scenario, the cure may be worse for the workers affected that the disease as to them.

So, Levis survives not by outsourcing its business to whatever region or nation that will offer the lowest possible price per unit, but rather Levis does business in environments in which contracts are awarded based in part of price competitiveness and in part on the vendor's commitments to treat its employees ethically. This does put pressure on Levis, because the company is not outsourcing production to where it can be done the cheape

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Category: Business - E