Running Head: U.S. Companies and Globalization

Unit 3 Project

Kaplan University

CM 312 – Communications and Organizational Change

At one point in U.S. business history, the work force was controlled and dominated by white males. It is my opinion that the business world has changed as human beings have evolved through being open-mined and willing. When a persons thinking expands to include something that they were closed-minded to before, we will witness changes in our world. In the history of business in this country, we have seen women kept from working certain jobs and the institution of slavery in many parts of the south. During the historical timeframe that these things were practiced, they were believed to be “the correct thing to do, “ however we have changed our minds about these practices. Our society has dealt with lots of organizational change, such as large corporate mergers, stock market crashes and economic set-backs. We are no longer a country that just consists of family-owned businesses, small businesses and large corporations. The world is rapidly changing and becoming more globalized to include free trade and outsourcing. Large companies in the United States have taken an interest in global trends and begun practicing business around the globe. Companies that were once headquartered in one state, with branch offices in other states have now taken advantage of the global opportunities that have been presented. One major company in America that has begun to reach out into the world is Levi Strauss & Co. who operates in 110 countries and organizes their business into three regions of Americas, Europe and Asia Pacific. This company is still headquartered in San Francisco, but it is also currently expanding into new markets outside of the United States. Levis Strauss & Co. has a presence in Canada, Western Europe and Japan currently. According to their web site, “In the years ahead, our goal is t expand the Levi Strauss & Co brands in India, China, Russia, Brazil and other emerging markets” (Levis Strauss & Co. Global Workplaces).
Levi Strauss & Co. started “…as a wholly family- and employee-owned enterprise…” (www.fundinguniverse.com). They are a clothing maker that has been known for producing denim jeans and in the 1970’s, this company began to push their product to become a worldwide social phenomenon. As the high demand for jeans continued to grow, the marketing team of the company made an assessment of their customer base and then structured the company accordingly. The new structure consisted of four divisions: jeans, Levi’s for women, boy’s wear and men’s sportswear.
Levi Strauss jeans are sold in “…department stores J.C. Penney, Sears and Roebuck and began to appear in Macy’s, with a considerably higher price tag” (www.fundinguniverse.com). At J.C. Penney and Sears you will find your average low to middle range income shoppers, however Levis are also sold at stores like Kohl’s, Bloomingdales and Macy’s which tends to cater to your upper middle class and upper class shoppers. The difference in the customer traffic at these stores is the reason for the huge difference in pricing. By 1977, Levi Strauss & Co had become the largest clothing maker in the world. However, becoming the largest did not come without some difficulties abroad.
The company experienced the negative side of international business which included their employees in some of its international locations offering bribes to foreign officials. More trouble came for this company in the early 1980’s when the demand for denim jeans flattened out and so did the company profits. The change in fashion trends affected employees of this company most of all. In 1982, 2,000 jobs were eliminated and then later in 1983 more factories were closed and more jobs were lost. This led to a restructuring of the company in 1985 and cut backs that allowed for the company to be taken in a private buy out for $1.45 billion by the Haas family. The next strategic move was the world-wide introduction of the men’s pant’s line, Dockers.
The ability to purchase material, manufacture and sell these pants in foreign markets helped the Levis Straus & Co to launch one of the most successful pieces of apparel in the history of the industry. The new private company was on its way to reaping the benefits of being a part of a diversified market that included 40 percent of its revenue from foreign sales by 1992 (www.fundinguniverse.com). Dockers are cotton pants that are mostly worn by older male customers. According to the Levi Strauss & Co. web site, the company uses raw cotton materials in more than 95 percent of its clothing, and the cotton is “…grown in the U.S., China, India, Pakistan, Turkey or one of the many other countries where cotton is farmed” (www.levisstrauss.com). Even though they are a large consumers of cotton, they actually use less than 1 percent of the world’s annual cotton crop. Less than 5 percent of the raw material that is used in their supply chain if from sources other than cotton. The remaining materials in the clothing are from animals.
The manufacturing, supply and selling of Levi Strauss apparel is being done with energy efficiency in mind. Currently, the company is making conscious efforts to have all their manufacturing facilities and retail stores to pursue better energy efficiency through heating, ventilation, and air conditioning. By utilizing the expertise of various engineers, they are developing innovative solutions to reduce the amount of energy that is being consumed and minimize their contribution to the changes in climate. The company also has closely examined the logistic of transporting their product and the global supply chain and determined that by using a mixture of trains and trucks for their U.S. domestic transportation they would reduce fuel usage. They have also created an information management system that lets them collect and track the energy use of their suppliers: China, Cambodia and Bangladesh. Energy audits have been performed at the owned-and-operated facilities in Poland, South Africa and Turkey.
Levi Strauss has a strong presence in Manhattan, but is also sells its jeans in foreign markets, such as Eastern Europe and India. Globalization has benefited this company because free trade policies have helped them to market and distribute their goods around the world. Therefore, it has been extremely lucrative for Levis Strauss & Co. to market in 110 countries, while producing in about 50 countries. It may be lucrative, but it is also very complex with implications and drawbacks for the company practicing unethical behavior, not being environmentally conscious, practicing unfair labor treatment, ignoring stakeholder interest and not enforcing government regulations. One of the drawbacks to having a presence in poorer countries around the globe is that the standards for working are different than in the United States. For example, they have active initiatives to improve working conditions in Cambodia, Mexico and Bangladesh. According to their web site, “…we sent letters and engaged with the government of Bangladesh, Cambodia and Mexico to help workers overcome legal and political obstacles to freedom of association and other civil liberties” (www.levisstrauss.com/about/global-workplaces). Another drawback in globalization lies with company employees. Levi Strauss & Co. has closed factories and began manufacturing offshore which has put many people out of work. For example, “Levi Strauss & Co. (Canada) closed its Edmonton doors in Mary 2004, moving all manufacturing offshore; it was the end of an era. After nearly 100 years, the Great Western Garment (GWG) brand is no longer being produced in Edmonton,
Canada. Prior to the closing, the workforce became very diverse as each immigrant group came to Edmonton and encouraged to apply for work at GWG. The company was composed of people from various cultures, such as Indian, Italian, Portuguese, Asian and Indo-Caribbean’s. In closing, the nationality and cultural change in the workforce of this company is an example of the recent changes in world business. The world is rapidly changing and becoming more globalized to include free trade and outsourcing.

References
Levis Strauss & Co. Web Site.
Retrieved from http://levistrauss.com/about/global-workplaces on Jan. 3, 2011.
Levi Strauss & Co. Company History. Retrieved from http://www.fundinguniverse.com/company-histories/Livi-Strauss-amp;Co-Company-History.html on January 4, 2011.
Virtual Museum, ca. Piece by Piece. Retrieved from http://www.royalalbertamuseum.ca/virtualExhibit/GWG/en/education/globalization Jan. 3, 2011