Levi's: Corporate Citizenship in a Global Economy

One of Levi Strauss & Co.'s first great acts of corporate responsibility came just a short while after the company began to supply Comstock Lode miners with tough-skinned work duds in the 1870s. The original Levi's reinforced pants included metal rivets not only on the pockets but also one located at the base of the button fly.

It was soon found, however, that this ill-placed rivet could pose a public health hazard. As a miner squatted over a campfire, legend has it, the rivet would heat up, a fact unrealized by the wearer until he stood up straight. Then â€" zing! â€" the unfortunate miner would suddenly be dancing a jig, much to the amusement of his peers.

But even before Levi Strauss kindly removed the offending rivet, according to an article in the latest issue of Corporate Citizen, a publication of Boston College's Center for Corporate Citizenship, Levi Strauss was playing the philanthropy card. Writes Peggy Connolly in "Corporate Responsibility is in the Jeans," Levi Strauss & Co.:

• Donated $5 (about $105 today) to charity, before the then dry-goods company even turned a profit
• Kept most of its workers on the payroll after the Levi's factory was destroyed in the Great Earthquake and Fire of 1906
• Helped its workers weather the Great Depression
• Racially integrated production facilities long before desegregation was mandated by the 1964 Civil rights Act

Not noted in the article are the various Haas family funds, which provide millions in grants to charitable organizations and universities around the nation -- one Haas or another has run Levi Strauss & Co. or served on its board since the 1920s. The company was also among the first to recognize the threat of AIDs and offer support to its victims, and has won numerous awards from minority and other groups for encouraging workplace change.

But it hasn't been all philanthropic sunshine and roses. The global economy has presented challenges to the company's standing as a good corporate citizen. Faced with competition from cheaper overseas-manufactured brands, the company in the 1990s began shifting more and more jobs elsewhere.

Subsequent accounts of labor abuses in developing countries severely dinged Levi Strauss & Co.'s reputation, and the company closed the last of its U.S. factories in 2003. Today the company maintains it adheres to fair labor practices abroad.

So where's the line? Every company these days -- and not just Levi Strauss & Co. -- has to compete in the global marketplace, but what is a company's duty to its immediate community? Doing good works in philanthropy and education is a wonderful thing. But does it owe more to the communities that gave it its start in the first place? And, if so, what does it owe?