Quality and responsibility never go out of style

Levi Strauss & Co.

Szab Vera
2012.12.03.

About Levis
Levi Strauss & Co. is one of the world's largest and well-known brand-name in jeanswear with its reported net revenues of 4.4 billion dollars (in 2010).

The enterprise designs and markets jeans, casual wear, accessories for men, women and children in more than 110 countries worldwide ( through supply chains ) and represents itself in 31 countries with 482 own stores. 1 As a business entity Levis wishes to earn profit but they believe to do it so through principles, and values. Their social responsibility is part of their vision. As they see it, this is what gives them a competitive advantage. With empathy, originality, integrity (to do the right thing), and courage to take a stand in what they believe ( such as sustainable fashion ) they will reach their final goal. To make the fashion industry aware of the impact they have on the environment. 2 The Corporate Social Responsibility ( CSR ) includes consequences and responses that a business operation might cause. It differs in every country, and in every culture depending on the economic, legal, ethical, and philanthropic expectations. To be effective the CSR activities have to be linked to the companys financial performance; with a constant attention to the new adaptations of business ethics; and it has to represent the stakeholders best interest ( Matten - Moon, 2008 ) 3

In the fashion industry what is more important for the customers? To wear fashionable clothes according to the newest trend, or to preserve the environment with being more aware of the consequences that we the customers cause with every purchase? Levi Strauss & Co. believes that they can offer both.

http://www.csrwire.com/members/11174-Levi-Strauss-Cohttp://www.levistrauss.com/about/values-vision

Dirk Matten and Jeremy Moon: Implicit and Explicit CSR: A Conceptual Framework for a Comparative understanding of corporate Social Responsibility, 2008

Obviously the enterprise cannot operate responsibly without a functioning (free) market, governmental and a legal institutional background. The civil society is responding to the institutions acts toward the ( sustainable ) business prospects and vice versa. The Political, Financial, Education and Labor, Cultural, and Coordinating and control system define what Levis is allowed to do.

The Implicit CSR is when the formal and informal institutions shape the requirements for enterprises. They include mandatory values, norms and rules, and they are driven by the societal consensus. Levis on the other hand not only uses Implicit CSR but also Explicit one. The company applies voluntary corporate policies, programs and strategies in the aim to meet the stakeholders expectations. With their acts they show their motivation to create new economically friendly methods to better the fashion industrys attitude (Matten- Moon, 2008)
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But how can anybody define what is acceptable and what is harmful in this industry?
According to the Bounded rationality if we pay attention to the limitation of the human skills, habits, reflexes; values, conception of purposes which are influencing the decision making; and knowledge, we can focus on and have control over the factors that are the closest to the decision. The problem is that this requires an economic, rational man with a clear, well-organized, and stable system of preferences. Those decisions that have to be made ( primary decisions ) with the usage of specific information sources ( secondary decisions on how to get them ) create scenarios that companies can use ( Zsolnai-Tencati, 2009 ) 5

Dirk Matten and Jeremy Moon: Implicit and Explicit CSR: A Conceptual Framework for a Comparative understanding of corporate Social Responsibility, 2008
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Laszlo Zsolnai and Antonio Tencati (eds.): The Future International Manager. A Vision of the Roles and Duties of Management 2009, Holistic Problem Solving

Levis wanted to create a responsible company to represent the shareholders values and wishes. This obviously created a situation where big investments were needed to change the whole production, the companys supply chain and the marketing of the products. Levis is trying to avoid the Error of the Third Kind ( solving the wrong problem6 ) that is why they divided their vision into 3 parts. This way their awareness policy is focusing on the real problems in the industry:

The People ( Worker Rights, HIV/AIDS, Equality, Community Engagement ), Planet ( Energy, Water, Chemicals, Materials) and Product ( Cotton/Raw Materials, Fabric Mills, Product Suppliers, -Distribution, Retail, -Recycling and Consumer Care, -Life Cycle of a Jean ) 7

are close-ups to the companys influence on the environment and social awareness. This way they state that they are willing to search out and be proactive with their decisions. For example the company has been encouraging the customers not to throw their used clothes away but offer them for charity for three years now.

In their vision it is stated that they wish to do the right thing while doing it right. The company produces excellent quality clothing, still manages to find the right way to do so.

Laszlo Zsolnai and Antonio Tencati (eds.): The Future International Manager. A Vision of the Roles and Duties of Management 2009, Holistic Problem Solving
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http://www.levistrauss.com/sustainability

Environmental Sustainability
According to Levis President and CEO John Anderson For the fashion industry to be sustainable economically, it must be sustainable socially and environmentally too8 For them it is more than a project or idea, it is embedded into the products, the company culture, it is built into everything that they do, this way their profitability helps to restore the planet. It is not only what they do with their revenues but how they achieve it so the goal is not only to influence what the people wear, but to influence the way they think and act. It goes beyond regulatory compliance ( Implicit CSR ) or minimizing the environmental impact, the environmental footprint while restoring environmental health to the planet. Levis environmental friendliness is connected to three factors. One of them is the cotton used for production; the other is how the customers use the clothes and last but not least on the four critical areas during manufacturing: the usage of energy, water, chemicals and materials.

Their sustainability requires measurable, targeted milestones with long-term plans, innovative public policy and very thoughtful product development. In connection with energy they are committed to achieve carbon neutrality, moving towards 100% renewable energy usage during operational activities and supply chain. Reduced water, chemical quantity and improved quality are significant. The company is committed to become a zerowaste company with sustainable products. Previously through their Water>Less program they were able to reduce the water consumption with an average of 28% ( per model ) but there were models where this number grew until 96%. In total during 2012 360 million liters of water was saved.9 As part of the Better Cotton Initiative Levis was encouraged to reduce the quantity of water and pesticide used during production.

http://www.csrwire.com/press_releases/28949-Scenarios-Explore-Fashion-World-of-2025 http://www.ellemagazin.hu/divat/2012/11/05/Kornyezettudatos-divat/

Social responsibility
Though the Levi Strauss Foundation the company turns its values into action. The program involves the awareness of the worker rights, HIV/AIDS awareness, the importance of equality, assets building and the support of the communities.

The corporation ensures safe, healthy, humane labor conditions with paying attention to its workers well-being. Starting with educating factory workers and management on their roles and duties, giving legal aid to the ones in need it is a pioneer in preserving workers rights. Not only the employees, but also their families are involved with the companys fight against AIDS and HIV. Involving nonprofit organizations, the public, their supply chain partners, and even the customers Levis is creating opportunities for bigger changes inside and outside the company.

Equality and diversity

Levis believes that acting later sometimes means never so as socially responsible company it has to pay attention to the unbalanced equality system and try to change it as fast as possible.

In this globalized world everybody should have the opportunity to shape their life freely; nobody should be pushed passively by the world ( Nussbaum, 1999 ) 10 The company is in constant battle for equal rights. This fight involves racial, gender, sexual, and economic territories. They appreciate and celebrate the diversity in the company, respect the different backgrounds and talents of the employees. As it was previously mentioned the company wants to shape how the customers see the world. With strong marketing campaigns they expect to achieve changes in perceptions and behavior.

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Martha Nussbaum: Women and equality: The capabilities approach (1999)

In 2008 they produced a gay-themed television advertisement on mainstream cable media outlets. The advertisement earned the media award of the Gay and Lesbian Alliance Against Defamation for best advertising showing their open minded principles.

The inequality between men and women, different races and ethnic backgrounds are extremely important in the companys life. There are different arguments in connection with the womens inequality but the company does not believe in them. Cultural arguments states what are the most important and traditional roles that a women should have. This involves them staying at home, not working ( maybe because they are less talented, educated etc. ) but the company has strict policies not letting the preconceptions determining their workers employment. Diversity makes the company able to react to unexpected situations flexibly. All cultures have their norms with their own beauty and they should be cherished. Levis believes that norms connected to gender inequalities are not worth preserving and they are more harmful so it is better to let it die out. From a paternalist point of -view nobody should be involved in the tension between different cultures because the people living them are the ones who know what is best for them, for their society ( Nussbaum, 1999 ) 11. Levis intention is not to make huge changes, just to achieve a fair way of thinking.

Product development
Care tag for our planet is an initiation to avoid putting billions of pounds of used or unwanted clothing into landfill. Instead try to make good use of it in a way that would help to increase the life cycle of the clothes. Their objective is to encourage consumers to donate clothes when they are no longer needed.12 With the clothes value recovery more than 1.5 billion pounds of clothing and textiles could be saved yearly from landfill. What is also needs to be mentioned is that these programs create job-training opportunities for more than 1.5 million people yearly.

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Martha Nussbaum: Women and equality: The capabilities approach (1999)

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http://www.csrwire.com/press_releases/27979-Levi-s-R-and-Goodwill-R-Partner-to-Launch-a-Care-Tag-ForOur-Planet-

Most recent activity in the companys life is their 2013 male and female Waste > Less collection. These jeans are made in the aim to reduce waste by using recycled bier bottles, soda cans, PET bottles, and plastic plates that were collected from all parts of the United States and delivered to Levis where they are separated according to their colors. Each jeans contains at least 20% of recycled materials, meaning an average of 8 bottles are used for one jeans production. In total 3,5 million bottles are supposed to be used for the new collection what will be available from January. 13

Cooperation with social and political actors

Globalization has changed how the enterprises are dealing with their surroundings. The improved technologies ( with the boom of the internet ), the growing environmental problems around the world, and the growing cultural diversity are making it necessary to change from old methods to new ones. As it was mentioned Levis is in cooperation with the local communities and Civil Society Organizations ( CSOs ) to help better the planets condition. The environmental groups, trade unions, consumer protection organizations are mostly organized around ethical values such as the interest of consumers, ethical consumerism, fair trade, and sustainability. With their cooperation and expertise the company is able to come up with new solutions.

Ronald Inglehart states that the developed societies are paying attention to materialistic values (e.g. physical security and economic welfare), and post-materialistic values that include the importance of living a quality life, human relations, and the opportunity of self-expression14. This is in line with Levis goals as they are trying to embrace all kind of partnerships to create win-win situations, to use their common knowledge, skills and create something new and valuable. These help to better the companys goodwill.

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http://www.ellemagazin.hu/divat/2012/11/05/Kornyezettudatos-divat/

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Laszlo Zsolnai and Antonio Tencati (eds.): The Future International Manager. A Vision of the Roles and Duties of Management 2009, Cooperating with Social and Political Actors

Fashion Futures
During the London Fashion Show in 2010 provocative scenarios were born based on the ideas from Levi Strauss & Co. and Forum for the Future. Together they are trying to influence the fashion industry jointly to create sustainable solutions. During the program they challenge the industry to look beyond short term and focus on what the people would like to see in 2025. Slow is Beautiful: Similar to slow food, here the "Slow fashions prospect is painted. They believe that people should own fewer, but improved quality clothes. Try to wear smart clothes, vintage- or second-hand ones. Community Couture: Second-hand clothes are valuable resources in the less developed world, so sharing is carrying. Some are also struggling for survival in dangerous places, where the clothes are made. This scenario welcomes ideas that would help protecting people from armed gangs. Techno-Chic is benefiting from technological investments and low-carbon economy. With developed technological background ( through the internet ) customers are able to try on (designed to biodegrade or to be reused ) clothes with 3-D body scanners operating as virtual mirrors. With this solution they hope to achieve less bought yet unused clothes. Patchwork Planet collects the religious and cultural ideals of the world. In the Middle East many Western clothes are banned. These clothes are designed to allow owners to update them in line with the latest local trend. 15 In 2006 Levis introduced its 100% organic cotton jeans. Their socially responsible acts are in line with their wish to minimize their impact on the environment without forfeiting the style or quality that the customers expect. These jeans are signed with the label "Levi's(R) Eco, with an embedded lowercase "e" inside the front pocket, or at the bottom of the right leg of each jean. The products are made of 100% organic fabric, just like the colored
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http://www.csrwire.com/press_releases/28949-Scenarios-Explore-Fashion-World-of-2025

pocket stitching. The packaging is also made from organic fabric or recycled paper with soybased ink paint.16

Improvements and suggestions

The globalization shifted the power between the actors and the governments. Multinational and transnational corporations ( such as the Levis ) are dominating the worlds trade system. As an opportunity the Levis can influence the customers to put more effort into preserving the planet, although without transparency this is just the top of the ice. That is why more transparent steps should be made in hand with governments and countries, other enterprises, and non-governmental organizations. Considering the governments powers are decreasing it is difficult to make bigger steps alone unless transparency is achieved between the actors. Working with supra-national corporations, government departments, CSOs, and labor organizations who are dealing with cross-the-globe problems ( Zsolnai-Tencati, 2009 )
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could give a solution for this problem

and all the measures could be raised worldwide. The recycling materials collection could be spread worldwide. New factories could be established, where they only use these materials.

Using recycled materials as part of the production is a genius idea, that is why the company could wide its environmentally friendly product portfolio with accessories made with the similar technology.

The company could cooperate with other companies and could use tie-in so when a customers purchases a developed product ( for example from the Nikes Red collection ) they could be given a coupon to buy Waste > Less jeans on reduced price.

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http://www.csrwire.com/press_releases/18754-Levi-s-Brand-Launches-100-Organic-Cotton-Jeans-DenimLeader-to-Offer-Organic-Options-in-its-Most-Popular-Styles-for-Fall-2006
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Laszlo Zsolnai and Antonio Tencati (eds.): The Future International Manager. A Vision of the Roles and Duties of Management 2009, Cooperating with Social and Political Actors

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References
Laszlo Zsolnai and Antonio Tencati (eds.): The Future International Manager. A Vision of the Roles and Duties of Management. 2009. Palgrave-Macmillan

Matten, D & Moon, J. (2008): Implicit and Explicit CSR: A Conceptual Framework for a Comparative understanding of corporate Social Responsibility, Academy of Management Review 2008, Vol. 33, No 2, 404-425.

Nussbaum M. (1999): Women and equality: The capabilities approach, International Labour Review, Vol 138, No 3

http://www.csrwire.com/press_releases/18754-Levi-s-Brand-Launches-100-Organic-CottonJeans-Denim-Leader-to-Offer-Organic-Options-in-its-Most-Popular-Styles-for-Fall-2006 http://www.csrwire.com/members/11174-Levi-Strauss-Cohttp://www.csrwire.com/press_releases/27979-Levi-s-R-and-Goodwill-R-Partner-to-Launcha-Care-Tag-For-Our-Planethttp://www.csrwire.com/press_releases/28949-Scenarios-Explore-Fashion-World-of-2025 http://www.ellemagazin.hu/divat/2012/11/05/Kornyezettudatos-divat/ http://www.levistrauss.com/about/values-vision http://www.levistrauss.com/sustainability http://www.rsablogs.org.uk/tag/behaviour-change-brands-csr-downstream-csr-levis/

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