Levi Strauss Company example essay topic

Decision-making is one of the most critical reoccurring responsibilities that managers face in their company. An excellent decision would help any company accomplish its strategic goals, including meeting the needs and demands of the company's employees, executives, stockholders, consumers and suppliers. The problem that many managers will face in making a decision is when to stop gathering facts. This costs the company billions of dollars and valuable time each year. Decision making, in most cases, presumes commitment, the willingness of decision-makers both to devote the time and energy to deciding and to accept responsibility for the uncertain consequences of their actions.

The purpose of this paper is going to be to analyze the decision-making process that was involved in the decision and the reasons for Levi Strauss & Company to close all of the manufacturing plants in the United States and Canada. Levi Strauss & Co. is one of the worlds leading branded apparel companies. In 1873 the first jeans were born in the United States when Levi Strauss and Jacob Davis patented the process of putting rivets on pants for durability. Today, Levis is one of the most recognized trademarks in the world and has often been called "an American tradition".

There are very few items that are linked as to being all-American. It will no longer be that. On September 25, 2003, Levi Strauss & Co. announced that it would be closing all of the remaining manufacturing and finishing plants in North America. In 1998, they closed 13 American plants and cut more than 7,000 jobs and in 1999 they closed 11 more plants. Last year they closed another six plants eliminating 3,600 more jobs. By March of 2004 they will all be closed resulting in 2,000 more people losing their jobs.

Union leaders said the decision went against everything the family-controlled company used to stand for. So why would a company decide to make a decision this drastic? Philip Marineau, the CEO and President of Levi Strauss and Co., faced a very critical decision. Revenue has fallen for the sixth straight year and something needed to be done. This will all be part of the shift away from owned and operated manufacturing that the company began several years ago. "We " re in a highly competitive industry where few apparel brands own and operate manufacturing facilities in North America.

In fact, we are one of the last companies to do so, in order to remain competitive, we need to focus our resources on product design and development, sales and marketing and our retail customer relationships", said Marineau. They feel that this will give them the strength and flexibility they need. They cannot compete with today's competitive marketplace. Levi's became an American Icon in the 1950's and 60's when they were an essential in the wardrobe of the baby boomers. Today's younger consumers are leaning more toward trendier clothes like those from The Gap and Diesel and they don't want to wear the clothes that their parents did. Levi's is also blaming high labor costs for this decision and say that labor will be cheaper in other parts of the world.

They say that the move is an inevitability of global economics and that even Americans on minimum wages cannot compete with overseas labor. They will be relying on plants in Asia, China and Bangladesh. However, the company's headquarters will remain in San Francisco. In order to cut costs the company will not be producing any of their own jeans, instead they will be contracting out the process.

The worlds most famous denim company will no longer make jeans, they will just design and market them. Many feel that the closures are just all part of the U.S. governments new trade policies that allows firms to "scour the globe for the cheapest, most vulnerable labor they can find". This decision is definitely a Non-programmed decision. The company's managers have no idea what this will do to the company. They were going on intuition and using their best possible judgment in trying to save the company. I have mixed feelings on their decision.

Many people are against it, while many are for it. I do not agree with the fact that so many people have to lose their jobs considering it is so hard to find a job these days as it is. Levi Strauss & Co. has put together an excellent severance package for the employees to help them get back on their feet again after the plants close. I also feel that something had to be done in order to keep the company from losing more money. I am very interested to see how people react to this, as it becomes more known to the public and how this will affect Levi Strauss & Company.