Gap Labor Problems Essays

Gap Labor Problems Essays Gap Labor Problems Essay Gap Labor Problems Essay Major ethical issues: Gap Inc. is a multinational casual apparel chain retail store with â€Å"3000 supplier in 50 different countries†. The manufacturing environment, human right treatment and labour policy vary substantially among suppliers from substandard to appalling. Gap Inc. ’s customer were deceived to assume the products were â€Å"Made in USA†, under United States labour standards and human right policies; whilst, manufacturing factories were located in Saipan –a U. S. protectorate in Southeast Asia. Although Saipan conformed to majority of U. S labour laws, it was exempt from federal minimum wage laws. Furthermore, the majority of the manufacturing factories located in Saipan are foreign companies from such countries as china and Thailand. Workers’ rights have been systematically violated in supplier factories in other localities such as Central America, Thailand, Cambodia, Bangladesh, Indonesia and Mexico. Workers were misled into entering contracts, advertised as a well-paying job in USA. In fact the jobs were located in Saipan and paid $3 an hour, moreover, the contract required workers to pay a hefty recruiting fee. Significant human right violation has been committed by suppliers contracted by Gap and other major retailer. Basic human right violation occurred ranging from subjection to sexual harassment, lack of clean water, not being able to use bathrooms and harsh and cruel punishment as a method of discipline. Furthermore, employees were forced into consenting to a contract prohibiting marital arrangements and political or religious activities. Fair labour policy violation came to light upon the employment of minors to fulltime positions. : Additionally, employees failed to pay for overtime. Rampant harassment used as anti-union initiatives. Pregnancy test was required prior to employment. Underage teens have been hired as young as 13 with full time schedule and minimum pay. In one instance a 14 years old girl died of exhaustion after working several 14 hours a day shifts. As a part of their employment contract, employees were forbidden to ask for salary increase, nor participate in union activity or look for alternative jobs. In some instances, workers were given high quota of production and if they failed to meet the demand they wouldn’t receive payment or were forced to perform â€Å"volunteer unpaid time†. Safety was a major issue in the working environment. For instant, teenage workers in China worked in a room that reeked of toxic fumes; some factories had more than a 1000 citations. Dwelling provided for workers was insanitary with exposed electrical wiring. American union of apparel worker claimed, they weren’t able to compete with these foreign suppliers due to these low cost sweatshops. Gap denied such accusations by shifting the accountability to the suppliers, and insisting that resolution of worker plight is the responsibility of their employers who employed them and not of Gap. Utilitarianism Perspective Utilitarianism is a consequence based theory which suggests; those actions are permissible that create the most overall good (utility) for the greatest number of people ( audience). Utilitarianism is the greatest advocate of free market and globalization. Free market encourages efficiency in the market, which pave the way to optimal distribution of cost and benefit in a society. Issues arising from unfair labour policies, human right conditions and hazardous working environment provided in the case is argued in such way that society in these underdeveloped –sometime developing- countries would benefit greatly from employment, economic prosperity and increase standard of livings in the long run. Concurrently, multinational companies in societies in which such products are marketed will benefit from lower costs, attaining competitive advantage in the global market. The ripple effects of their competitive advantage will reach their employees, community in which they operate, government and shareholders. Moreover, lower cost leads to more efficiency which translates into lower prices for consumers. Based on this argument, the complete chain of stakeholders including employees, employers and end users would benefit overall. Conversely, many would object to the notion emphasized by utilitarianism, based on the fact that the pursuit of self-interest tends to lead to injustice. The utility of higher bottom line for Gap Inc. will adversely affect workers and their society by subjecting them to inhumane treatments. There is also first generation problem that arise from such practices. By the time market correct itself and provide better and safer working condition for these workers, a whole generation of worker’s human and labour rights have been sacrificed. Many of these businesses have tremendous lobbying power that could slow down or prevent any initiative targeted to correct aforementioned conditions. The objective and tangible aspect of positive views of utilitarianism such as higher employment and bottom line are measurable as oppose to endangering human lives and impairment of their fundamental rights. Deontological Perspective Deontological ethics identifies the ethical duty to treat everyone with respect for their autonomy and rationality. People have fundamental interest that overrides the collective will and overall utility. Such interest is protected under Deontological ethics, hence, others have the duty to comply and respect these individual rights. Deontological theory also promotes free market. The Gap Inc. ’s corporate executive, Mr. Drexler has a duty to stockholders to conduct business in accordance with their interest. The Gap Inc. is a private entity, thus free to pursue the best interest of The Gap Inc. Contracting suppliers in Saipan leads to drastically lower cost of goods sold which in turn maximizes profit and attains higher return on investment. This is fundamentally, the best interest of for-profit organizations. Deontological argument fails to notice that property rights are not unconditional; centuries of legal precedent transpired from case laws and regulatory legislations. Oversee regulations serve to expound wide range of managerial obligations to safeguard rights of employees. Gap owners’ property right shall not be used in a way that will infringe the basic rights of the workers. Such argument will allow employers to treat the workers as mean to the end of stockholders. Treating workers as rational autonomous beings is at the cornerstone of demonological theory. Current conditions bear a resemblance to treating workers as objects, merely a manufacturing machine with no rights. Furthermore, in a democratic and sensible society mangers take â€Å"positive rights† into considerations. Positive rights are those that managers have the duty to provide like safe working condition, fair treatment, respect and intention to provide better living standards. Gap Response Assessment According the piece Gap was one of the first companies to adapt a code of ethics for its factories. In response to rising criticism and precedents facing the company and its industry competitors, Gap updated its code of conduct. This was a pre-emptive initiative to battle sweatshops conditions in the factories. There were also guidelines for safety and labour practices. According to the article codes of conduct adopted by Gap, suppliers must avoid discriminatory conducts, forced labour, prison labour, child employment bellow the age of 14, and promote respect for union efforts, provide safe working environment and pay legal minimum wages. Additionally, the code of conducts promoted respect for local environment regulation and obedience of the local laws and regulations. These guidelines resemble a minimalism approach. According to Tom Donaldson, business is set to follow economic interests to the extent as to follow minimum moral rights set forth by UN declaration of universal human rights. Hence, the Gap should merely acknowledge the negative duties not to cause harm. Many of the aforementioned nations have proper laws and regulation in placed. However, there is the lack of administrative enforcement. Another aspect of Gap’s response is how they handled criticism and litigations. First criticism arrived from an article published in The New York Times by columnist Bob Herbert. The article illustrated the plight of hundreds of thousands of young workers in Central America who made apparel for Gap under conditions which violated their human rights, rights of collective bargaining and furthermore, subjection to torture, cruel and unreasonable punishments. In several other instances labour activists staged demonstration that illustrated the conditions of workers in Saipan and other locations. The activists demanded Gap stand responsible for the remorseful working conditions and to intervene in creating better working environment in those factories. Additionally, they requested an independent audit report to be conducted of the factories to portray an accurate picture of the employment conditions. Initially, Gap resisted such demands and criticism by relying upon their own monitory reports and account from supplier owners. Furthermore, since the workers employed by such factories are not direct labor of Gap, responsibility, if any, rests with the subcontractors. Gap also repelled the call for independent inquiry in order to control the flow of information to their consumers. On January 1999, a lawsuit was brought against the Gap Inc. on behalf of 50,000 factory workers at Saipan. The lawsuit accused Gap and 25 other retailer of violation of workers’ human rights. Moreover, the lawsuit accused Gap of deception of consumers into believing the products offered by the company were â€Å"Made in USA† under United States labour and minimum wage laws, even though they were made in Saipan under inhumane, unsafe conditions with total lack of regulations. Additionally, the lawsuit revealed that the workers were misled into entering contracts that advertised a well-paying job in USA. In fact the jobs were in Saipan and paid $3 an hour and made employees promise to pay a hefty recruiting fee. Sadly, employees were further required to surrender their basic human and employee rights. Gap refused to settle the lawsuit outside the courtroom unlike the other defendant named in the lawsuit, on the basis that settlement would express admission to guilt. Finally, Gap updated their codes of conduct to address the issues brought up by the lawsuit regarding the foreign employment practices. They also agreed to pay $20 million to compensate the workers in Saipan factories. On May 2004, in face of all the criticism and lawsuits targeted towards the company, the Gap Inc. ’s new management accepted to publish a public report of the conditions and employment practices in their oversee supplier factories. The company’s decision was praised by many labour activists for being a step forward in ethical embracement. The company prioritized respect for union formation. Some argued workers lack the knowledge of their fundamental rights due to cultural and ethical relativism, so they become victims of a so called well-run prisons† Recommendations In terms of the Gap Inc. ’s appropriateness of responses to the aforementioned issues, it must be noted that creation of Gap’s code of ethical conduct was a proactive tool to battle sweatshop conditions. Especially for the fact that it wasn’t a defensive response, rather a pre-emptive move to avoid catastrophic precedents. Lack of proper monitoring and enforcement of such codes of conduct seemed rather peculiar. Gap should have conducted audits with more frequency and served to eliminate such adverse problems before they become to light. Employees are rational, autonomous individuals, and thus have certain basic needs and interests. According to Maslows hierarchy of needs, human beings basic needs rank from Physiological, Safety, Belonging, Esteem to self-actualization. Physiological needs are required for human survival. Assuming food, shelter and clothing were provided, humans need for sexual companionship and procreation is a part of such needs; in this case marriage was frowned upon by employer –suppliers- by means of contract. Safety needs is both most critical and lacking in this case. Harsh punishments abolished workers personal safety. Manipulative and deceitful contract terms endangered workers property rights and freedom. Health and safety is vital to human wellbeing and freedom. Such rights or needs should be protected from being infringed upon and traded away in the process of bargaining. Moving up any further in level of need is redundant since workers most basic need must be met before a higher level of needs is achieved. Without the attainment of lower level needs, sense of belongingness and self-esteem are inexistent and self-actualization will never be met. Corporation are held morally and socially accountable for their actions and how they fit into the fabric of a society. Diffusion of responsibility occurs when there are a number of participants in the arrangement and responsibility is not clearly assigned or enforced. Gap holds the supplier responsible for the affair of workers. Suppliers are regulated by government and laws, which in many cases are never upheld. Gap is the ultimate beneficiary of this supply chain and must be responsible for the conduct of suppliers. According to Carroll’s Pyramid of Corporate Social Responsibility, there are four level of responsibility for Gap Inc. as a corporation. First it must be economical; this is the commercial vitality of any for-profit organization and is necessary to the survival of the company and is private property of the stockholders. Any initiative employed toward resolving these ethical issues seem to have economic significance. As mentioned in the case consumers are more likely to avoid shopping from a brand associated with sweatshops. Second level is the Legal responsibility. Gap must obey the law applied both in US and in the local laws in which these factories are located and operated. It must be noted that although many of the countries aforementioned have fairly appropriate regulation in place, lack of social development prevent such governments from enforcing these regulations. The Gap Inc. or any of its suppliers must not take advantage of weak administration. Third level is the ethical responsibility. As mentioned previously, Gap is the ultimate beneficiary of this supply chain. Although suppliers are directly in charge of these workers, Gap holds an immense power to prevent such unethical behaviour from occurring. Therefore, the company must resiliently monitor the conduct of its suppliers, given the high risk of non-compliance. Protection of human rights rank at the top of issues requiring urgent resolution. No physical or psychological trauma should be endured by workers. Subsequently, health and safety in factories must be provided as it is essential to the wellbeing of workers. Employment rights and regulation must be fully upheld and respected. Subjection to deceptive advertisement must be eliminated to both workers and end users. End users must know the condition of factories in which the merchandise is being manufactured. Workers must not be deceived into contract with dissipated terms. A fair wage should be paid to workers which is comparable not essentially equal to workers in United States. The aforementioned processors will to address apparel worker concern in US who are concerned with uncompetitive low wages paid in Saipan and or other developed countries. Forth and finally, the Gap Inc. has philanthropic social responsibilities. As aforesaid Gap uses minimalism approach in which it acknowledges only â€Å"negative duties† not to cause harm. They should alter their perception by seeking maximalist approach. The Gap Inc. holds tremendous influence, power, and resources which could be used towards providing positive benefits and promotes better conditions in the community where they directly or indirectly operate. The ripple effect of such practices will repair the company’s damaged identity and image.