Tutorial 5

Case study 4.3

Levi Strauss at home and abroad.

1. Evaluate the pros and cons of Levi Strauss’s decision to close its South Zarzamora Street plant. Was it a sound business decision? Was it a socially responsible decision? Could the company have reasonably been expected to keep the plant running?

These plant closures will contribute to the ongoing progress of our business turnaround, transferring its production abroad would achieve significant cost saving, enabling the company to recover its closing cost, Outsourcing production supports a more variable cost structure, helps us maintain strong margins and enables us to invest more resources in product, marketing and retail initiatives.

However, Outsourcing is becoming more and more popular, it is cheaper for companies to do so, but leaving people jobless, it is not social responsible, it is all about profit. They only think about their financial investments in return such that their social responsibility became a liability for them leaving the choice of shutting the business plant.

Of course the company could have kept the business running, the issue was higher profits. Stallworth attributed the San Antonio plants high costs to workers' compensation expenses, to a less-than -full-capacity plant operation, and the fact of that not have been totally successful. Retraining workers would spend years, furthermore, running the San Antonio plant efficiently would mean running it at full capacity, but too many pairs of trousers produced by high priced American labor.

2. Having decided to close the plant, Was there more that Levi Strauss could and should have done for its laid-off workers?

Neither seems to have dampened sales, but they embarrassed the company, witch donated nearly $100000 to help local agencies retrain its employees and provide them extra job counseling and training services. And it would spend $200 million in severance and other employee benefits. Workers affected by the job cuts will get eight months'...