Case Notes/Answers
Levi Strauss & Co By Mark Leslie
Discussion Questions:
Day One: (A) Case
1. How attractive is China as a business opportunity? As a member of the China Policy Group
what would you recommend regarding (1) continued sourcing and
(2) possible direct investment in manufacturing or marketing ventures in China?
2. If you recommend continued involvement in China, would you attach any special
requirements such as adherence to the guidelines in the proposed codeof-conduct bill (p. 18)?
3. What is your assessment of LS&CO.’s global sourcing guidelines? Would you have voted for
the Guidelines as written?
4. How vulnerable is LS&CO. to the charge of “moral imperialism?” How concerned should
company executives be about this issue?
Day Two: (B) Case
1. What is your assessment of LS&CO.’s final decision on China?
2. What is your assessment of the process used to make the decision? How does the PRA compare
to other decision models that might be used?
3. In what ways might Haas’s concerns differ from the CPG’s concerns?
4. Why does LS&CO. make such a fuss over values, ethics, and corporate responsibility? How
does LS&CO.’s approach to corporate ethics compare to others studied in the course?
, Levi Strauss & Co.: Global Sourcing Series
Teaching Note
Synopsis
How does a company maintain its values when essential manufacturing processes are
performed by far-flung independent contractors operating within diverse cultures and political
systems? The global sourcing guidelines adopted in 1992 by Levi Strauss & Co. (LS&CO.), the
world’s largest brand-name apparel manufacturer, reflect one company’s approach to that challenge.
This case series, Levi Strauss & Co.: Global Sourcing (A) and (B), describes LS&CO.’s
approach to organizational ethics and its development of a comprehensive set of global sourcing
guidelines.
The (A) case (No. 395-127) focuses on a critical question the company faced in late
1992 in the wake of adopting its sourcing guidelines: should LS&CO. continue and
possibly increase its involvement in China, the country expected to become the
world’s second largest economy?1 The case takes the perspective of LS&CO.’s China
Policy Group (CPG), a senior-level cross-functional group chartered by the
company’s CEO and its head of global sourcing to address this issue in view of
human rights and other problems in China. The CPG’s assigned task is to use
LS&CO.’s “principled reasoning approach” (PRA) to make a recommendation to the
Executive Management Committee, the company’s most senior decision-making
group.
The (B) case (No. 395-128) describes the CPG’s recommendation, the Executive
Management Committee’s deliberations, and the decision finally taken by CEO
1Joyce Barnathan, Lynn Curry, and Owen Ullmann, "Behind the Great Wall," Business Week, March 29, 1993, p.
46 ff., at 43.
1
,395-213 Levi Strauss & Co.: Global Sourcing Series
Robert D. Haas to phase out LS&G Co.’s sourcing activities and to postpone
investment in China.
The ethical issues in the case center on the legitimacy of holding contractors world-wide to a
set of standards based on values many might consider to be distinctively Western, if not American.
The concept of human rights, in particular, is central. The series illustrates an organizational
decision-making process that integrates ethical values and stakeholder concerns into corporate
decisions. The case may be used to consider the relationship between organizational ethics and
commercial success.
Context in the Course
The LS&CO. case series was developed for the concluding module of the second-year MBA
course Managing for Organizational Integrity. The module deals with the ethical challenges of
globalization. As the last case series of the course, it offers an opportunity to review and summarize
earlier material on decision-making and ethics strategies while linking both with the challenges of
maintaining a set of corporate values in a global business environment.
Suggestions for Classroom Use
The LS&CO. series is quite flexible. Depending on the instructor’s teaching objectives, it may
be taught over one or two 80-minute class periods. Instructors wishing to focus primarily on one
aspect of the case, such as the Chinese business environment or LS&CO.’s approach to ethics, will
need only one class. Instructors wishing to cover all the main issues in the series will need two
classes.
This teaching plan assumes a two-class period, with the (A) case prepared in advance for the
first day and the (B) case distributed at the end of the first day and prepared for the second. (A
condensed one-day teaching plan is found in Appendix A of this teaching note.) The instructor may
wish to assign supplementary readings on human rights or globalization for the second class.
These LS&CO. materials are suitable for use in courses on general management, international
business, organizational ethics, and corporate social responsibility.
Educational Objectives
• Illustrate a group process for deliberation designed to integrate ethical
considerations with other business concerns
• Develop skill in decision-making and ethical assessment
• Develop skill in designing and implementing an organizational ethics strategy
• Increase understanding of the ethical issues involved in globalization, especially
issues related to workplace conditions and human rights
• Increase understanding of the relationships among ethics, organizational
effectiveness, and commercial success
2
, Levi Strauss & Co.: Global Sourcing Series 395-213
Study Questions
Day One: (A) Case
1. How attractive is China as a business opportunity? As a member of the China
Policy Group what would you recommend regarding (1) continued sourcing and
(2) possible direct investment in manufacturing or marketing ventures in China?
2. If you recommend continued involvement in China, would you attach any
special requirements such as adherence to the guidelines in the proposed code-
of-conduct bill (p. 18)?
3. What is your assessment of LS&CO.’s global sourcing guidelines? Would you
have voted for the Guidelines as written?
4. How vulnerable is LS&CO. to the charge of “moral imperialism?” How
concerned should company executives be about this issue?
Day Two: (B) Case
1. What is your assessment of LS&CO.’s final decision on China?
2. What is your assessment of the process used to make the decision? How does the
PRA compare to other decision models that might be used?
3. In what ways might Haas’s concerns differ from the CPG’s concerns?
4. Why does LS&CO. make such a fuss over values, ethics, and corporate
responsibility? How does LS&CO.’s approach to corporate ethics compare to
others studied in the course?
Class Overview
The teaching plan for the (A) case places students in the role of the China Policy Group (CPG)
and is structured to replicate LS&CO.’s “principled reasoning approach” (PRA). The six steps of the
PRA are covered in sequence in four main discussion segments, culminating in a recommendation to
the Executive Management Committee. Discussion of the (B) case revolves around analysis and
review of LS&CO.’s actual decision and the organizational support systems for responsible decision
making.
Day One: (A) Case
Introductory remarks (5 minutes)
1. Problem definition (10 minutes)
1.1 Let’s begin with Step One of the Principled Reasoning Approach. What’s the problem
here?
3
Levi Strauss & Co By Mark Leslie
Discussion Questions:
Day One: (A) Case
1. How attractive is China as a business opportunity? As a member of the China Policy Group
what would you recommend regarding (1) continued sourcing and
(2) possible direct investment in manufacturing or marketing ventures in China?
2. If you recommend continued involvement in China, would you attach any special
requirements such as adherence to the guidelines in the proposed codeof-conduct bill (p. 18)?
3. What is your assessment of LS&CO.’s global sourcing guidelines? Would you have voted for
the Guidelines as written?
4. How vulnerable is LS&CO. to the charge of “moral imperialism?” How concerned should
company executives be about this issue?
Day Two: (B) Case
1. What is your assessment of LS&CO.’s final decision on China?
2. What is your assessment of the process used to make the decision? How does the PRA compare
to other decision models that might be used?
3. In what ways might Haas’s concerns differ from the CPG’s concerns?
4. Why does LS&CO. make such a fuss over values, ethics, and corporate responsibility? How
does LS&CO.’s approach to corporate ethics compare to others studied in the course?
, Levi Strauss & Co.: Global Sourcing Series
Teaching Note
Synopsis
How does a company maintain its values when essential manufacturing processes are
performed by far-flung independent contractors operating within diverse cultures and political
systems? The global sourcing guidelines adopted in 1992 by Levi Strauss & Co. (LS&CO.), the
world’s largest brand-name apparel manufacturer, reflect one company’s approach to that challenge.
This case series, Levi Strauss & Co.: Global Sourcing (A) and (B), describes LS&CO.’s
approach to organizational ethics and its development of a comprehensive set of global sourcing
guidelines.
The (A) case (No. 395-127) focuses on a critical question the company faced in late
1992 in the wake of adopting its sourcing guidelines: should LS&CO. continue and
possibly increase its involvement in China, the country expected to become the
world’s second largest economy?1 The case takes the perspective of LS&CO.’s China
Policy Group (CPG), a senior-level cross-functional group chartered by the
company’s CEO and its head of global sourcing to address this issue in view of
human rights and other problems in China. The CPG’s assigned task is to use
LS&CO.’s “principled reasoning approach” (PRA) to make a recommendation to the
Executive Management Committee, the company’s most senior decision-making
group.
The (B) case (No. 395-128) describes the CPG’s recommendation, the Executive
Management Committee’s deliberations, and the decision finally taken by CEO
1Joyce Barnathan, Lynn Curry, and Owen Ullmann, "Behind the Great Wall," Business Week, March 29, 1993, p.
46 ff., at 43.
1
,395-213 Levi Strauss & Co.: Global Sourcing Series
Robert D. Haas to phase out LS&G Co.’s sourcing activities and to postpone
investment in China.
The ethical issues in the case center on the legitimacy of holding contractors world-wide to a
set of standards based on values many might consider to be distinctively Western, if not American.
The concept of human rights, in particular, is central. The series illustrates an organizational
decision-making process that integrates ethical values and stakeholder concerns into corporate
decisions. The case may be used to consider the relationship between organizational ethics and
commercial success.
Context in the Course
The LS&CO. case series was developed for the concluding module of the second-year MBA
course Managing for Organizational Integrity. The module deals with the ethical challenges of
globalization. As the last case series of the course, it offers an opportunity to review and summarize
earlier material on decision-making and ethics strategies while linking both with the challenges of
maintaining a set of corporate values in a global business environment.
Suggestions for Classroom Use
The LS&CO. series is quite flexible. Depending on the instructor’s teaching objectives, it may
be taught over one or two 80-minute class periods. Instructors wishing to focus primarily on one
aspect of the case, such as the Chinese business environment or LS&CO.’s approach to ethics, will
need only one class. Instructors wishing to cover all the main issues in the series will need two
classes.
This teaching plan assumes a two-class period, with the (A) case prepared in advance for the
first day and the (B) case distributed at the end of the first day and prepared for the second. (A
condensed one-day teaching plan is found in Appendix A of this teaching note.) The instructor may
wish to assign supplementary readings on human rights or globalization for the second class.
These LS&CO. materials are suitable for use in courses on general management, international
business, organizational ethics, and corporate social responsibility.
Educational Objectives
• Illustrate a group process for deliberation designed to integrate ethical
considerations with other business concerns
• Develop skill in decision-making and ethical assessment
• Develop skill in designing and implementing an organizational ethics strategy
• Increase understanding of the ethical issues involved in globalization, especially
issues related to workplace conditions and human rights
• Increase understanding of the relationships among ethics, organizational
effectiveness, and commercial success
2
, Levi Strauss & Co.: Global Sourcing Series 395-213
Study Questions
Day One: (A) Case
1. How attractive is China as a business opportunity? As a member of the China
Policy Group what would you recommend regarding (1) continued sourcing and
(2) possible direct investment in manufacturing or marketing ventures in China?
2. If you recommend continued involvement in China, would you attach any
special requirements such as adherence to the guidelines in the proposed code-
of-conduct bill (p. 18)?
3. What is your assessment of LS&CO.’s global sourcing guidelines? Would you
have voted for the Guidelines as written?
4. How vulnerable is LS&CO. to the charge of “moral imperialism?” How
concerned should company executives be about this issue?
Day Two: (B) Case
1. What is your assessment of LS&CO.’s final decision on China?
2. What is your assessment of the process used to make the decision? How does the
PRA compare to other decision models that might be used?
3. In what ways might Haas’s concerns differ from the CPG’s concerns?
4. Why does LS&CO. make such a fuss over values, ethics, and corporate
responsibility? How does LS&CO.’s approach to corporate ethics compare to
others studied in the course?
Class Overview
The teaching plan for the (A) case places students in the role of the China Policy Group (CPG)
and is structured to replicate LS&CO.’s “principled reasoning approach” (PRA). The six steps of the
PRA are covered in sequence in four main discussion segments, culminating in a recommendation to
the Executive Management Committee. Discussion of the (B) case revolves around analysis and
review of LS&CO.’s actual decision and the organizational support systems for responsible decision
making.
Day One: (A) Case
Introductory remarks (5 minutes)
1. Problem definition (10 minutes)
1.1 Let’s begin with Step One of the Principled Reasoning Approach. What’s the problem
here?
3
