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Gap Inc.’s Working Conditions and Their Social Responsibility

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In this commentary, I will examine The Gap Inc.’s working conditions and will eventually come to a conclusion whether or not they can be considered as socially responsible in terms of the manual labour process The Gap, Inc, is an American multinational corporation which operates as an apparel and accessories retailer with international associations. Over the past 50 years, the company branched out, and grew to own six retailing companies: Athleta, Banana Republic, Hill City, Intermix, Gap, and Old Navy. The Gap, Inc, retails to over 90 countries globally, selling clothing, accessories, as well as personal care products for both men and women, as well as children. They supply their products through over 3100 company-operated stores, as well as almost 400 franchise stores, and e-commerce sites. Additionally, they have franchise agreements with other unaffiliated franchises to help run their stores all around the world. As of February 2nd 2019, they had 3194 company-operated stores; and 472 franchise stores, as well as e-commerce sites. However as the brand continues to grow, so does the demand of their products and human resources. This would mean that The Gap, Inc has to meet these requirements and find cheap human resources while adhering to fair employment practices. So from this, we look at whether or not can The Gap Inc.’s working conditions be considered as socially responsible in terms of the manual labour process? In order to be considered as socially responsible in terms of the manual labour process, businesses have to provide decent working conditions and a reasonable salary. Furthermore, they must also avoid the implementation of unethical practices such as the exploitation of child labour by hiring minors in developing countries. This way they adhere to an ethical practice and follow the ‘Health and Safety at Work legislation’ to avoid taking advantage of their workers. If they are considered as socially responsible, they will develop an improved corporate image with more loyal customers. Additionally, being socially responsible can help boost staff morale and help motivate productivity. Ethical practices can also help garner attention from job-seekers and helps the business retain a more motivated workforce.

However, certain businesses do not comply as compliance costs can potentially be quite high which can result in lower profits (Hoang, 37).

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Information in regards to SWOT Analysis

Based off of my supporting documents, I conducted a hypothetical SWOT Analysis of The Gap, Inc.

Strengths

Strong belief in equality and diversity: This ensures that everyone feels welcome both as a customer and as a member of the workplace (Catalyst).

Sustainable Business: The Gap Inc. jeans are made with 20% less water than typical manufacturing methods in an effort to be environmentally responsible (Gap Inc.).

Weaknesses

Competition: The Gap Inc. faces increasing competition as currently businesses such as H&M and Zara are the market leaders in the fashion apparel industry. Previous history of unethical practice: The Gap Inc. were previously involved in situations where female workers in the factories were getting sexually and physically abused (Hodal, 2018).

Opportunities

Improvement in E-commerce: They have released a new initiative which lets customers browse and purchase their items online to then pick-up in store, and are currently working on improving this system.

Threats

Competition: The market leaders of the fashion apparel industry are able to regularly improve their store traffic which The Gap Inc. is struggling to do.

Corporate Social Responsibility

A business which is considered as socially responsible behaves ethically towards stakeholders and the natural environment.

In reference to The Gap Inc.’s 2017 report, we are able to see that they are making an effort to reduce pollution caused by their manufacturing process by using a more environmentally friendly production process and reducing unnecessary water consumption to prevent wastage (Gap Inc., 41). They are also taking responsibility to help prevent global waste in their procedures so not only can they benefit the environment, but additionally benefit themselves to prevent adding unnecessary cost. In the same report we are also able to see references to their inclusivity within their workforce by creating an accepting diverse environment for all ethnicities and genders (Gap Inc., 21), as well as sharing several of the awards they have won in recognition of such.

As stated in Thomsonn Reuter’s diversity and inclusion index, The Gap Inc. is considered to be one of the top brands in terms of inclusivity. They have publicly stated that they believe that inclusion, diversity and opportunity are the main factors in order to continue as a successful company. Their inclusive nature has helped to create a positive image for the business.

However, in opposition to this, The Gap Inc. have previously been accused of worker abuse and mistreatment of their employees in sweatshops based in underdeveloped countries. Aside from addressing their diversity and inclusion, their public statements show that The Gap Inc. does not suitably discuss their accusations of workplace harassment, violence towards staff and infringement of acceptable work standards.

As a fast-fashion business, The Gap Inc. are required to hit high production targets. These high production targets as well as using a piece rate wage system creates pressure amongst their workers to meet these goals at the cost of resting, using the bathroom, or even eating or drinking water.

In response to this, The Gap Inc. have allegedly administered a materiality analysis in order to make sure that their method and reporting addresses the most crucial present and forthcoming economic, environmental, and social impacts on people, as well as the communities involved with the business. However, in spite of this, in evaluating risk, The Gap Inc.’s global sustainability team only evaluates “the importance of potential social and environmental risks and opportunities” to external stakeholders, for example, suppliers.

According to the information available to the public, in evaluating supply chain risk, they particularly leave out industry-related risks along with supplier-related risks and do not discuss certain risks connected with the industry; neither risks affiliated with certain suppliers. Doing this goes against the principles of due diligence as stated in the UN Guiding Principles on Business and Human Rights, stating the responsibility to respect human rights obligates business enterprises to: ‘Avoid causing or contributing to adverse human rights impacts through their own activities, and address such impacts when they occur.’ as well as to ‘seek to prevent or mitigate adverse human rights impacts that are directly linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts.’ (United Nations of Human Rights, Article 13)

Worker Motivation

The UK Institute of Management explains motivation to be “getting someone to do something you want or, on an individual basis, wanting to do something for yourself for a particular reason.” In regards to this, increased worker motivation leads to improved enthusiasm and job satisfaction which would therefore promote enhanced productivity and quality, as well as better relationships within the workplace and lower absenteeism (Hoang, 172).

However, due to The Gap Inc.’s involvement in unethical practices of labour, what motivates their staff to amplify job satisfaction, morale and job productivity?

Taylor

Taylor’s principles of scientific management assumed that employees are mainly motivated by money and that productivity can be improved by setting output and efficiency targets related to pay. However, although the scientific management is rather ineffective when referring to jobs that focus on mental rather than physical output, the manufacturing process tends to lean towards the aspect of physical output.

The suppliers calculate the labour costs primarily basing it on minimum wage, rather than living wages; and ten-hour days, including two hours of overtime, rather than eight-hour working days (Asia Floor Wage Alliance). India has previously been titled the ‘Labour Capital of the World’ by the UN due to it having the cheapest labour as well as the most flexible labour laws and entry costs. This is as India is still a developing country with thousands suffering in poverty and are desperate for money to live off of, resulting in these factories offering minimum wage job, taking advantage of the underprivileged. So, we can see that money could be a potential factor in motivating The Gap Inc. staff.

Conclusion

In conclusion, can The Gap Inc.’s working conditions be considered as socially responsible in terms of the manual labour process? No.

Although, yes, The Gap Inc. can be considered to be one of the top brands in terms of inclusivity within their workforce, they still have a lot of issues in terms of their mistreatment of their employees in sweatshops, as well as their lack of addressing the situation publicly and taking action to prevent this from continuously happening. The Gap Inc.’s corporate social responsibility measures may seem acceptable on paper, however they fail to adequately discuss their accusations of workplace harassment, violence along with violations of sufficient labour standards. On top of that, they are completely self-surveilled. As a whole they fail to talk about risk factors for violence as well as administer access for assistance in situations of workplace harassment and violence.

The Gap Inc. should recognise specific risk factors for violence in global production networks and should try to implement a way to offer labour protection to labourers employed in either developing countries or circumstances that are not protected by labour law as well as other social protection framework. Aside from this, they should also take action to prevent unrealistic manufacturing demands and piece-rate goals that hastens manufacturing rates, lengthens labour hours, develops arduous working environments, and allows abuse.

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