Corporate Social Responsibility: Levi Strauss & Co - Case Study Example

?Corporate Social Responsibility: Levi Strauss & Co. Though the concept of corporate social responsibility (CSR) has been clearly defined in 1950s, only in the recent decades it has become a visible and important aspect or organizational culture and performance (Carroll 1999). As early as in 1953 Bowen outlined that operation of large firms and organizations, which are the centers of power and decision making, has a great influence on the various aspects of the citizens’ lives (Bowen 1953). Today the view on the issue does not differ much. The idea has only grown up to include such concepts as stakeholder and business ethics theories, as well as corporate citizenship (Carroll 1999). Furthermore, the contemporary world, and the consumer society in particular, requires businesses to contribute into the improvement and development of social initiatives. Consumers of our era do not go for low price; on the contrary, they are more eager to buy from organizations that are socially responsible, that help local communities and stick to sustainable business practices. So, it can be said that it might be very difficult for a company to be successful without and well-developed and effectively implemented CSR program. For this reason Levi Strauss, one of the most famous world clothing companies that operates internationally, devotes much resources to the CSR issues. The given paper will examine the most significant environmental and other social initiatives of the company, as well as analyze the impact and implications of the company’s actions on society and stakeholders. Levi Strauss & Co. was founded in 1853 by a Bavarian immigrant Levi Strauss (About Levi Strauss & Co. 2010). The company claims to have created the first pair of jeans in the world, and is now a successful international corporation, the three major divisions of which are Levi Strauss Corporate and Americas in San Francisco, Levi Strauss Europe, Middle East and North Africa in Brussels and Levi Strauss Asia Pacific in Singapore (Locations 2010). However, since the major goal of any business is profit, Levi Strauss, just like many other large corporations, did have difficulties balancing investment and human rights considerations. While the organization was one of the most socially responsible companies of the 1970s, the financial constrains related to high cost of domestic manufacturing in the 1990s finally made the company transfer manufacturing to China again (Vogel 2005). Levi Strauss in China David Vogel (2005) reports that in 1993 Levi Strauss & Co. developed “Guidelines for Country Selection” and, as a result, withdrew its manufacturing from China. Violation of human rights of the people that were working on factories manufacturing for Levi Strauss was the reason to stop cooperation with the Chinese. The company’s upper management viewed this step as the one towards improving the brand image, corporate reputation and social standing of the organization. Since at that time Levi Strauss was the only company to make a decision that put human rights above commercial interests, the world responded with admiration and encouragement (Raworth 2004). However, it took Levi Strauss only 5 years to slowly return to the Chinese labor for the purpose of increasing sales and profits. The company proclaimed that the human rights situation in China had improved. Still, the real reason behind their coming back was the cost of supplies and manufacturing. High cost of production out of China made it difficult for Levi Strauss to compete with the rivals, especially in the Asian markets. Even the company’s president admitted that “You’re nowhere in Asia without being in China” (Kolk and Van Tulden 2002). This case shows that, even though the company might be willing to become more socially responsible, it may be financially disadvantaged to do business in certain countries only. As an employer, Levi Strauss should be providing its workers with salary, insurance, good working conditions, paid leave periods, safe working environment and even some educational or training bonuses. All this, however, is available only to the direct employees of the corporations, while those unlucky enough to work in China receive the living minimum for the sake of organization’s financial success – approximately $0.4 per hour, according to Banister (2005). At the same time, it should be remembered that even those $0.4 per hour at the factory might be a wage higher than that of people working in other sections of the Chinese economy. Furthermore, Levi Strauss is one of a few companies that provide their Chinese workers with a nonwage benefit of medical service (Vogel 2005). Levi Strauss CSR Initiatives So, while the return of Levi Strauss to Chinese manufacturing may seem to represent some lack of CSR, thought justified financially, other initiatives of the company tend to justify and outbalance the potentially negative features of manufacturing in China. The two largest and most visible social initiatives of Levi Strauss are Levi Strauss Foundation and Red Tab foundation. These two organizations funded by Levi Strauss develop, implement and support fighting HIV/AIDS, building assets for the poor, supporting worker rights (Issues We Support 2010) and dealing with unexpected emergencies programs (Red Tab Foundation). Furthermore, the company has a number of environment protection initiatives. A few days ago, for instance, on the World Water Day, Levi Strauss announced the launch of Levi’s® Water Tank program. The sense of the program is in donating 200 million liters of clean drinking water to communities where water resources are scarce (Levi’sWaterTank 2011). In addition, it should be educating people on how to use water economically and how to participate in water savings. The previous water-related initiative of Levi Strauss was implemented in spring of 2011 with the release of Water Read More