Gap, Inc.
You decide to join Gap as its new CEO (Gap, Inc. runs Gap, Banana Republic, and Old Navy clothing stores). After you take the job, your teenage daughter immediately asks, "Doesn't Gap use sweatshops?" You aren't surprised by her question, as the company has received intense negative news coverage regarding the treatment of workers in the overseas factories from which it buys its clothes.
For example, a worker for a Gap supplier in Lesotho, Africa, complained, "The factory is dusty. We can't escape breathing in the fibers. When we cough, if the t-shirt we were working on was made of blue fabric, then our mucus would be full of blue fibers." A worker in another Gap supplier's factory in Bangladesh said, "If we make simple mistakes, they beat us up. I made some small mistakes one time, so the supervisor came and slapped my head and pulled my ears. And if we make mistakes, they don't pay us for our work." In El Salvador, where workers complained about abuse and terrible working conditions, worker Maria Luz Panameno said, "I'm very proud to sew pants for Gap, but the board of directors should not be proud of what is happening to us. Gap has abandoned us." Some workers pointed out that wages were so low that they couldn't buy enough food for themselves and their families. Steve Weingarten, a union organizer who tries to unionize and represent factory workers, says, "We want Gap to stop exploiting sweatshop labor around the world. We want them to pay a wage that allows a decent standard of living and allow workers to organize unions to improve their conditions in factories."
Is Gap the only company that relies on such suppliers? No, it isn't. According to Kirk Douglass of Pivot International, a manufacturing company that owns factories in the Philippines and does work with Chinese companies, "If you go into almost any plant in the nondeveloped countries of the Far East, you're going to see things that OSHA [Occupational Safety and Health Administration] or EPA [Environmental Protection Agency] would shut down tomorrow." For years, because of strong competition and priceconscious consumers, retailers like Gap have quickly switched orders from one factory or country to another whenever they could find a lower price. According to protest groups, that intense pressure to keep prices low has encouraged factory owners and managers to do everything they can to cut their costs, including mistreating workers. And with 4,000 factories in 50
countries supplying clothes for Gap, Banana Republic, and Old Navy stores, protest groups see Gap as a big part of the problem.
With intense negative publicity, protest groups calling for worldwide boycotts of Gap products and stores, and the company losing money, you couldn't find a much tougher situation as a new CEO. On the one hand, because Gap is a publicly traded company, one of your most important responsibilities is to keep your stockholders happy by making sure the company is profitable. And that means your overseas suppliers have to keep their prices low. On the other hand, negative publicity and boycotts may lower sales and reduce profits.
-Refer to Gap. Gap was ignoring its discretionary responsibilities to society when it__________ .

Question

Gap, Inc.
You decide to join Gap as its new CEO (Gap, Inc. runs Gap, Banana Republic, and Old Navy clothing stores). After you take the job, your teenage daughter immediately asks, "Doesn't Gap use sweatshops?" You aren't surprised by her question, as the company has received intense negative news coverage regarding the treatment of workers in the overseas factories from which it buys its clothes.
For example, a worker for a Gap supplier in Lesotho, Africa, complained, "The factory is dusty. We can't escape breathing in the fibers. When we cough, if the t-shirt we were working on was made of blue fabric, then our mucus would be full of blue fibers." A worker in another Gap supplier's factory in Bangladesh said, "If we make simple mistakes, they beat us up. I made some small mistakes one time, so the supervisor came and slapped my head and pulled my ears. And if we make mistakes, they don't pay us for our work." In El Salvador, where workers complained about abuse and terrible working conditions, worker Maria Luz Panameno said, "I'm very proud to sew pants for Gap, but the board of directors should not be proud of what is happening to us. Gap has abandoned us." Some workers pointed out that wages were so low that they couldn't buy enough food for themselves and their families. Steve Weingarten, a union organizer who tries to unionize and represent factory workers, says, "We want Gap to stop exploiting sweatshop labor around the world. We want them to pay a wage that allows a decent standard of living and allow workers to organize unions to improve their conditions in factories."
Is Gap the only company that relies on such suppliers? No, it isn't. According to Kirk Douglass of Pivot International, a manufacturing company that owns factories in the Philippines and does work with Chinese companies, "If you go into almost any plant in the nondeveloped countries of the Far East, you're going to see things that OSHA [Occupational Safety and Health Administration] or EPA [Environmental Protection Agency] would shut down tomorrow." For years, because of strong competition and price­conscious consumers, retailers like Gap have quickly switched orders from one factory or country to another whenever they could find a lower price. According to protest groups, that intense pressure to keep prices low has encouraged factory owners and managers to do everything they can to cut their costs, including mistreating workers. And with 4,000 factories in 50
countries supplying clothes for Gap, Banana Republic, and Old Navy stores, protest groups see Gap as a big part of the problem.
With intense negative publicity, protest groups calling for worldwide boycotts of Gap products and stores, and the company losing money, you couldn't find a much tougher situation as a new CEO. On the one hand, because Gap is a publicly traded company, one of your most important responsibilities is to keep your stockholders happy by making sure the company is profitable. And that means your overseas suppliers have to keep their prices low. On the other hand, negative publicity and boycotts may lower sales and reduce profits.
-Refer to Gap. Gap was ignoring its discretionary responsibilities to society when it__________ .

Quizplus · Accepted Answer

Any intervention that Gap might have attempted to improve the treatment of overseas clothing manufacturing facilities would be voluntary and therefore discretionary. OSHA and EPA regulations do not apply to factories outside the United States, so Gap did not have a legal responsibility to improve working conditions.

Gap, Inc. You Decide to Join Gap as Its New CEO (Gap