GAP Inc.

Our philosophy is simple: We seek to make a positive, lasting impact on the people and in the places where we operate. Do more than sell clothes.

Monday 8 June 2015, by Kristine Craig

A. The main facts about the activities of the company.

Gap Inc. is a global clothing retail company that offers a variety of clothing accessory and personal care products through various subset brands such as Gap, Banana Republic, Old Navy, Athleta and Intermix. What sets them apart from other retail and clothing companies is the division of their subset brands by price, lifestyle and purpose. For example, Gap is a upscale version of Old Navy´s casual, everyday style and Banana Republic is a professional, work-wear version of Gap. Athletica provides affordable clothes for exercising in. A prominent part of their mission stems from the promise made by Gap Inc founders Doris and Don Fisher in 1969 that their company would “do more than sell clothes.”

B. The Ethical challenges this company is addressing.

Gap Inc. proves an innovative and exemplary company that fights against the norm of many other retail practices. This large corporation addresses ethical challenges such as women’s rights, and labor laws in developing countries. For instance, since 2007, Gap Inc. has dedicated over 25,000 jobs in support of women’s career advancement to defeat the stigma of sexism in the workplace. They truly attempt to exemplify equality at every level, and continue to provide opportunities for women to advance and lead. In fact, Gap Inc. utilizes P.A.C.E., a program to provide female garment workers with the life skills necessary to enhance their abilities and move up in the workplace. Since 70 percent of the company’s employees are women, and globally 80 percent of garment workers are women, Gap Inc. provides and safe and supportive environment to enhance and support these skills. In addition, Gap Inc. addresses labor laws in developing countries. In 2007, Gap Inc. was accused of utilizing child labor practices in Indian factories - an accusation they proved to be false and inaccurate. However, this dispute sparked the company’s intensive fight against the utilization of sweatshops in third world countries. Although Gap Inc. maintains a strong presence in foreign countries by delegating a significant amount of assembly and fabrication factory work, they developed a code of conduct for labor that supported child labor laws, maintained appropriate wages, and provided overall safe working conditions. Additionally, to maintain and protect the utilization of these codes, Gap Inc. created “Global Partnership,” a program that directly works with vendor compliance officers who go and check up on these outsourced factories to enforce the utilization of safe practices. Also, Gap Inc. partners with organizations such as the Ethical Trading Initiative, and Social Accountability International to focus on labor management and push social responsibility. While it would be easy to manipulate the employment of women garment workers or find cheap labor overseas, Gap Inc. clearly fights against these immoral practices by creating and enforcing innovative standards which support their ethical work environment.

C. What makes you believe this company is really ethical and why you trust it?

While analyzing Gap Inc. from an objective and external perspective, we can see physical evidence that is has been considered one of the most ethical companies in the world. Ethisphere Institute, one of the global leaders in recognizing, defining, and advancing the standards of ethical business practices, publishes an annual list of the most ethical companies in the world. Gap Inc. is one of the fifteen companies to have been on the list every year since it has started. The five areas in which Gap Inc. continuously receives outstanding scores include “ethics and compliance, corporate citizenship and responsibility, culture of ethics, governance, and leadership, innovation, and reputation”.

Looking at the details and technicalities of Gap Inc.’s reputation for ethical supply chain management also convinces us how truly ethical the company is. Gap Inc. enforces its standards through a very strict Code of Vendor Conduct (COVC) as well as a Vendor Compliance Agreement. These codes specify the legal, social, and environmental requirements that all manufacturers and factories must meet in order to do business with the company. This gains the trust of many consumers because it verifies that all activity that is not completed internally within Gap Inc. itself is also monitored through a stringent set of rules. In addition to closely monitoring these requirements, Gap Inc. has also introduced capacity-building programs, which focus on working with factories to develop management skills and systems that increase factory accountability for meeting standards. A couple more promises that Gap Inc. delivers upon are raising the minimum hourly rate to $10/hour and “equal pay for equal work across the global workforce”, which is comprised of 73% women. Again, these build the credibility of the company as a rising reputable and ethical leader. One final strategic move on Gap’s part that exponentially helped consumers gain their trust was their transparency movement, in which they published all internal activity and goals to the public.

Finally, in addition to having external proof of Gap Inc.’s ethical practices, our group also has a more personalized reason to place our trust in Gap Inc. One of our group members has worked at Old Navy, a retailer owned by Gap Inc., for three years now. She is a testament to Gap Inc.’s push towards a more ethical and fair corporate culture as well. She claims that she can see it in practice through the commitment within individual stores to charitable organizations as well as policies such as the ‘no-means-no’ policy about workplace harassment within the stores. This gives us ample reason to trust in Gap Inc. and believe that their push toward ethical business practices is indeed being carried out throughout the world.

D.The possible challenges facing the company in the future and how you think this company may improve.

Possible challenges that Gap Inc. may face in the future can be found in their Personal Advancement and Career Enhancement Program (P.A.C.E.) Implemented in 2007, this program aims to improve the quality of professional skill education and technical training to female garment workers around the world with the hope of helping them advance in the labor force. The challenge they may face comes from the conflict of interest, in which Gap Inc. depends on garment laborers to create mass amounts of clothing, yet at the same time they are encouraging them, through this program, to advance their careers into higher level management positions. This essentially forms a stigma and implies that work in the garment industry is somehow undesirable.

Bibliography

http://www.gapinc.com/content/gapinc/html/aboutus.html

http://www.gap.com/browse/info.do?cid=91471&desktopSiteActive=true

http://www.tradeforum.org/Closing-the-Gap-Quality-and-Standards-in-Ethical-Supply-Chains/
http://www.gapinc.com/content/gapinc/html/media/pressrelease/2015/med_pr_2015_WME.html

http://www.gapinc.com/content/dam/gapincsite/documents/Gap%20Inc%20Fact%20Sheet_PROMISE_F1.pdf

http://www.gapinc.com/content/csr/html/community/advancing-women.html

http://investors.gapinc.com/phoenix.zhtml?c=111302&p=irol-reportsAnnual

Location: San Francisco, CA (United States)

Sector: Wholesale and retail trade

Official website: http://http://www.gapinc.com/content/gapinc/html.html

Key figures:

Annual revenue (2014): US$ 16.148 billion
Annual profit (2014): US.3 billion for fiscal 2014
Employees: 137,000 (May 2014)
- Worldwide operation
- Almost 3,300 company-operated stores and around 400 franchise stores.

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