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LEVI STRAUSS & COMPANY CASE STUDY

Cevdet KIZIL

Master of Science in Organizational Leadership Program

1- Knowing that its manag!s a! wi""ing to t!a# o$$ som %onomi% $$i%in% in o!#!

to o'!at a%%o!#ing to thi! %o""%ti( (iw o$ what is )thi%a"*+ wo,"# o, , sha!s o$

sto%. in this %om'an/ 0h o! wh not/

First of all, I think we are experiencing a paradox in this situation. Because, the

company is trading off economic efficiency in order to operate, but its a well known fact that

economic efficiency is one of the factors which affects the price of stocks. On the other hand,

lets say the company did set economic efficiency as a priority and decided to close some of

its plants. This will mean laying off seeral employees. Thus, the current condition really

makes is tough to !udge. "oweer, I would still buy shares of stock in this company. Because,

company reputation, image and responsibility are also effectie factors. Furthermore, I

beliee that #ei $trauss % &ompanys ethical iew will help them to win in the long'run.

They may experience losses and they may not make profits in a short period, but I think that

companys ethical iew will also affect their stock price, profitability and brand in the long

run. For example, (argery )raus, *resident and &+O of *&O -orldwide also !ustify my

opinions with her words *lay by your own rules and ethics. In the long run it will pay off/.

s a result, because of all these reasons, I would buy shares of stock in #ei $trauss %

&ompany.

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- Manag!s o$ L(i St!a,ss "i( that th !,n an thi%a" %om'an+ ,t som %!iti%s

(iw thi! "i!a" m'"omnt an# n$its 'o"i%is as immo!a"2 Ths %!iti%s o3%t to

th 'o"i%is %a,s th4! in%onsistnt with th %!iti%s4 !"igio,s (iws2 Ana"5 th

'!os an# %ons o$ an o!gani5ationa" %,"t,! that in%",#s so%ia"" "i!a" m'"omnt

'o"i%is that a! (iw# som mm!s o$ so%it 6in%",#ing 'otntia" m'"os an#

'otntia" %,stom!s7 as immo!a"2

Its true that owning an organi0ational culture that includes socially liberal

employment policies has some adantages and disadantages. 1espite the fact that liberal

employment policies make it less risky and costly for companies to hire employees as well as

bringing them flexibility in reassigning !obs, we should also hae a look at the other side of

the coin. The reason is that, liberal employment policies also cause high rates of

unemployment and poerty. In other words, an organi0ational culture that includes socially

liberal employment policies has some pros such as creating an attractie atmosphere for

inestment, fostering competition, attracting highly motiated employees and enabling

outsourcing, but it also has some cons such as harming young employees, women, migrants

and elderly people as well as leaing many !obless. s a result, members of society who iew

an organi0ational culture immoral which adopts social liberal employment policies may

hesitate to apply and work in those organi0ations mentioned. $imilarly, the potential

customers can reert back. $o, the companies can end up with haing an undesirable image in

the eyes of stakeholders. "oweer, for some other part of the society and stakeholders, things

can be much more different.

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8- S,''os o, a! "oo.ing $o! a nw 3o2 Yo, ha( two o$$!s $o! simi"a! 'ositions 9 on

at Ni. an# on at L(i St!a,ss2 :oth o!gani5ations ha( in#i%at# that th wo,"# "i.

o, to wo!. $o! a a! in on o$ thi! o$$sho! '!o#,%tion '"ants somwh! in so,thast

Asia2 Th two sa"a! o$$!s a! (! simi"a!+ an# in oth %om'anis o, wo,"# "igi"

$o! an ann,a" on,s2 Th on,s wo,"# as# "a!g" on th '!o#,%ti(it o$ th

'!o#,%tion '"ant wh! o, wi"" "o%at#2 0hi%h o$$! wo,"# o, a%%'t/ E;'"ain wh2

First of all, we should compare the two companies before giing our final decision.

#ei $trauss is ery sensitie about ethics, because they alue honest, accurate and

responsible adertising, they emphasi0e the importance of diersity and they are not

discriminatie in terms of hiring and promotion. (oreoer, they are careful about workplace

safety and priacy and they present many training and deelopment opportunities. -age and

salary distribution are also fair. Furthermore, they show respect to the enironment and they

support donations.

In the case of 2ike, they are also ethics oriented in some issues. For instance, 2ikes

eco'friendly shoe 2ike &onsidered which is easy to recycle should be remembered in this

context. In addition to this, it must be recalled that 2ike has proided !obs in many parts of

the -orld such as $outh sia and that was ery influential in terms of lowering the

unemployment rate. On the other hand, 2ike also has a negatie reputation for years for being

unethical. For example, 2ike was critici0ed a lot for using child labor oerseas. *lus, some

still argue that 2ike athletic shoes are oer expensie and the company makes excessie

profits by ignoring the economics of consumers.

&onse3uently, I would accept the offer of #ei $trauss because they hae a more

superior history of ethics compared to 2ike and the current scenario is still better for #ei

$trauss in my opinion.

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R$!n%s B

merican 6nieristy. 9:555;. T+1 &ase $tudies < 2ike= 2ike $hoes and &hild #abor in

*akistan/. The -ebsite of merican 6niersity, Trade % +nironment 1atabase.

http=>>www.american.edu>T+1>nike.htm

nderson, $. % &aanagh, ?. 9:55@;. mericas Boom Industry= Outsourcing/.

The -ebsite of lbion (onitor.

http=>>www.albionmonitor.com>outsource>index.html

&+O. 9:55A;. +merging (arkets= $trategies for $uccess < *&O= eturn on eputation

9O;/. The -ebsite of &+O 9&hief +xecutie Officer;.

http=>>www.the'chiefexecutie.com>pro!ects>emerging'markets>

?ackson, $.+. % $chuler, andall $. 9:554;. #ei $trauss % &ompany &ase $tudy/.

(anaging "uman esources Through $trategic *artnerships. C th+dition. pp.D4.