Rewarding Responsible Suppliers
Levi Strauss’s initiative is a good idea, especially for workers in the fashion brand’s supply chain. Considering the 2013 Rana Plaza factory collapse in Bangladesh (Deresky, 2017, p.70), Levi Strauss should focus on putting in place stringent environment, labor, and safety standards for their factories across the supply chain. These standards should be supported by a corporate culture whereby ethical codes of conduct are followed and basic human rights are protected. Factories that comply with these standards and codes of conduct should be rewarded. Through this, suppliers will be encouraged and motivated to conduct their operations while maintaining high ethical and safety standards, particularly for workers. As a result, workers could benefit from improved working conditions and general safety of the workplace.
Among the parties or stakeholders involved are suppliers. They are affected since offering tools and incentives will help them to improve working conditions while still increasing their profits. Local workers in Bangladesh and China are also affected by Levi Strauss’s initiative. The local workers are most dependent on the said jobs to support themselves and families. Offering incentives to improve labor conditions will be a plus for the local workers who will ensure that the factories they work for and Levi Strauss are successful in terms of performance and profitability. Customers are other stakeholders affected by the initiative. According to Deresky (2017, p.70), the International Finance Corporation (IFC) is expected to provide lower-cost working capital to suppliers, which translates to a decrease in products costs for the suppliers and a decrease in product prices to customers. There should be collaboration among the said stakeholders and full compliance with set environment, labor, and safety standards. Through this, the idea is likely to happen.
The incentive offered by Levi Strauss is a crucial step to achieving sustainability for the company. Part of the deal is to have Levi Strauss and IFC sign terms of agreement metrics that will help to measure environmental, health and safety, and labor performance both in the present and future. These performance measures could help meet the needs and interests of not only current but also future customers.
Deresky, H. (2017). International Management: Managing Across Borders and Cultures (9th Edition). Hoboken, New Jersey: Pearson Education Inc.