Business Ethics: Gap Inc.
Business Ethics and Corporate Social Responsibility Case Study: GAP Inc.
Business ethics can be described as the ethical dilemmas that arise within a business setting. GAP Inc., similar to most other multinational corporations (MNCs), has faced numerous ethical issues in the past. Since 1995, GAP’s image has been continuously tarnished through allegations of exploitive working conditions, cheap labour, and hostile environments overseas. One ethical issue surrounding GAP Inc. emerged from the “Made in U.S.A.” labels, resulting in the deception of American customers. This is an ethical issue because all of the clothing was made in Saipan. While Saipan is technically part of the U.S., it does not have to follow the same labour laws and standards as North America. As a result, GAP customers falsely believed the clothes they were purchasing were American made and subject to the strict policies and regulations America must follow. GAP followed through with the deception of consumers, which only began to tarnish their image. The second ethical issue surrounding GAP was the implementation of its “Code of Conduct” but the failure to enforce it. In 1993, GAP created a Code of Conduct aimed at preventing discrimination, fair wages relative to national standards, no employment of children, and no penalization for union formation. The Code of Conduct was to be signed by the individual suppliers in order to uphold the agreement. However, the Code of Conduct was not effectively enforced. In El Salvador, a GAP supplier, minimum wage standards were not met, and children were not only employed but also were not compensated for their overtime efforts. This is an ethical issue because GAP provided a hostile work environment in which workers right were no longer protected. The third ethical issue occurred when GAP claimed they were not aware of the exploitive working conditions abroad. Their denial of responsibility stemmed from the fact that a third
Business ethics can be described as the ethical dilemmas that arise within a business setting. GAP Inc., similar to most other multinational corporations (MNCs), has faced numerous ethical issues in the past. Since 1995, GAP’s image has been continuously tarnished through allegations of exploitive working conditions, cheap labour, and hostile environments overseas. One ethical issue surrounding GAP Inc. emerged from the “Made in U.S.A.” labels, resulting in the deception of American customers. This is an ethical issue because all of the clothing was made in Saipan. While Saipan is technically part of the U.S., it does not have to follow the same labour laws and standards as North America. As a result, GAP customers falsely believed the clothes they were purchasing were American made and subject to the strict policies and regulations America must follow. GAP followed through with the deception of consumers, which only began to tarnish their image. The second ethical issue surrounding GAP was the implementation of its “Code of Conduct” but the failure to enforce it. In 1993, GAP created a Code of Conduct aimed at preventing discrimination, fair wages relative to national standards, no employment of children, and no penalization for union formation. The Code of Conduct was to be signed by the individual suppliers in order to uphold the agreement. However, the Code of Conduct was not effectively enforced. In El Salvador, a GAP supplier, minimum wage standards were not met, and children were not only employed but also were not compensated for their overtime efforts. This is an ethical issue because GAP provided a hostile work environment in which workers right were no longer protected. The third ethical issue occurred when GAP claimed they were not aware of the exploitive working conditions abroad. Their denial of responsibility stemmed from the fact that a third