Principles at Levi Put a Wrinkle in Being Competitive
Watching a corporate icon get tripped up by the mismatch between its institutional principles and its actual performance is not always fun.
To be sure, there are plenty of truly amusing cases out there. There's WorldCom Inc., whose creator, Bernard Ebbers, was the most blustery, arrogant American chief executive since General Bullmoose and now stands accused of having profited from the biggest accounting hoax in history. Or Merrill Lynch & Co., whose bullishness on America turned out to be the cover story for the dissemination of fraudulent research reports.
On the flip side, there's the matter of Levi Strauss & Co.
The San Francisco jeans maker now celebrating its 150th anniversary will release its latest quarterly financial results today. The occasion will represent yet another opportunity to consider why a company whose name is synonymous with pure corporate ethics (not to mention "jeans") can't manage its own business more effectively.
Levi's public grappling with the balance between social responsibility and the profit motive goes back at least as far as the 1970s, when its then-patriarch, Walter Haas Jr., asked a Berkeley ethicist to help codify the moral principles bequeathed him by his father and grandfather, his predecessors as chairman. Haas' hope was that a written code could help guide an enterprise that by then had become too large to be influenced by the personal magnetism of a single individual. (He also knew he wouldn't be around forever.)
Levi wore Haas' principles as a badge, but there's no reason to believe its management treated them as a mere PR tool. Rather, the bosses seemed to make every effort to follow them wherever they might lead. When Levi integrated the workforce at its Virginia manufacturing plant in the 1950s, it refused to bow to demands by the white establishment for separate work spaces or sanitary facilities for its black workers. Within a week, according to the book "Levi's Children" by Karl Schoenberger, a former business reporter for The Times, "black and white workers were eating at the same tables in the company cafeteria."
Decades later, the company imposed explicit and tough anti-sweatshop guidelines on its overseas garment contractors. When Haas took the company public in 1971, the prospectus warned investors that they might have to bear the cost of hewing to high standards while competitors cut ethical corners.
