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The Gap Inc. : The CSR Evaluation of Gap Inc. Outline of the notable ethical decisions made by Gap Inc. and their impacts on the company In 2003, Gap Inc. was sued for its usage of child labor and sweatshop factories in its subsidiary in Saipan. The decision to use child labor and sweatshop in Saipan was made by the management of Gap Inc. that could either be seen as egoism or utilitarianism (Smith, 2004). On one hand, on the egoism perspective, Gap Inc. could have decided to use child and sweatshop labor to cut its costs and maximize its profits.
On the other hand, on the utilitarianism perspective, Gap’s decision to use child and sweatshop labor, cruel and ethical as it might seem, provided the people in Saipan a source of employment and income. As a poor, third world country, Saipan could not create enough jobs to sustain the livelihood of all its citizens, so it the citizens could choose between starving to death and making a difficult living in Gap’s sweatshops, the sweatshop is apparently a better option. Hence from the utilitarianism approach, Gap’s unethical behavior was actually better than its doing nothing at all.
However, this decision gave Gap an international lawsuit over ethical treatment of labor, which does not cost Gap considerable fortune and energy, but also severely harmed its international reputation as an ethical player in the apparel industry (Smith, 2004). It turned out that the public citizens and the media prefer to use the Kantianism when viewing a corporate ethical issue (Iwanow and McEachem, 2005). After this Saipan sweatshop incident, the stakeholders of Gap Inc. placed huge pressure on the company management (Smith, 2004).
As a result, Gap Inc. went through a thorough reflection on business ethics and corporate social responsibilities (CSR). Finally, the company made a decision to shift from the Utilitarianism approach to the Kantianism approach in its business ethics and CSR decisions. The new approach features three key principles, namely the universality, reversibility and respect. First of all, Gap decided to apply the same standard of ethical treatment to its workers whether they work for Gap in the U. S or third world countries.
Secondly, under the Code of Vendor Conduct (Gap, 2011), the Gap management has been committed to treat the employees just the way they expect the employees to treat them. Thirdly, Gap decided to treat its partners in the value chain with escalated respect, namely not considering them as a means to an end but rather as vivid means with flesh and bones. This revolution on Gap’s CSR philosophy has ushered the company into the right track of corporate social responsibility. Gap’s change in attitude has been accolade both by its stake holders and the media.