Effect of Cheap Labor & Competition on Levi Strauss
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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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labor in another part of the world means that the company cannot compete. Free trade results in the allocation of resources to the companies and countries in which it can be placed into production efficiently with a resulting product that is both lower in cost and higher in quality than the competition.
There are winners and losers in free trade, but the gains and losses are short term in nature and involve organizations that are not able to compete effectively. There are also winners in free trade. The winners are consumers. Consumers win by having a greater choice of goods, higher quality goods, and lower priced goods available resulting in maximizing the utility of their disposable income.
What is sustainable development? As China's real GDP growth approached ten percent earlier this year, the Chinese central government become concerned. The government realized that this level of economic growth was simply not sustainable. Any attempt to sustain it would have required significant yet poorly planned changes or improvements of the infrastructure in China. Because there would not be time to adequately plan for this growth, the patches to the current infrastructure would have been only temporary but the costs associated
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Approximate Word count = 1441
Approximate Pages = 6 (250 words per page)
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