In this article, based on in-depth interviews conducted in with Gap management and key external stakeholder representatives, we describe how Gap developed its stakeholder engagement strategy, the work such a shift entails and the many ways in which stakeholder engagement has benefited the company.
At the beginning ofGap specialty stores totaled around the world.That approach typically infuriated stakeholders and increased the likelihood of campaigns against Gap. Back when protesters were targeting the company, the Gap realized that it needed to overhaul the way it interacted with its critics. Gap also helped create a global forum of brands and retailers, together with NGOs, trade unions and government officials, to develop industrywide strategies against child labor. Some evidence even suggests that a responsible image is beneficial for employee recruitment and retention as well as customer preference. Step 3. Employee sustainability: if the firm delights customers by working its employees literally to death, it is not sustainable: even if it replaces them, this is not, as even Apple [AAPL] has found, an enduring way to run a business. An executive in the business, not a corporate communications or corporate responsibility person, spoke for the company. Go deep. Mitchell, B. This model, originally developed by pharmaceutical company Novo Nordisk, is described more fully in S. While such measures are critical to engagement, management should also look at metrics such as media stories, employee recruitment and retention and brand value.
After internal debate, the company decided to retain its relationship with the first-tier supplier that had hired the embroidery company. Criteria for evaluating the depth of stakeholder engagement generally evaluate management processes and procedures.
It is often expensive and slow.However, this time the Gap responded swiftly and proactively to take steps to address the problems, and the Lesotho story soon died down. And we think the best way for each company to grow and meet the evolving needs of our customers is to allow them to pursue tailored strategies separately. Drumwright and M. Smith, M. Identify the material issues. Their outcome is not. KeyBanc rates Gap Inc.
Since most documents attesting to age in Cambodia were destroyed by years of war and genocide, Gap and its suppliers relied on family records to verify that workers were above the minimum working age. In this case there was no doubt about the age of the workers and the severity of the working conditions.
It also decided that the finished garments would not be sold. Objectively, this case was much more severe than Cambodia.
Thousands of children were reportedly dismissed from the factories. Input from a variety of stakeholders enables management to have a fuller picture of risks and opportunities.Other clues to effective stakeholder engagement include product quality, worker turnover and declining order reject rates. In addition, there will be closures as leases expire after Prior to the engagement strategy, stakeholders would send letters to Gap about their concerns regarding factory issues. But many children dismissed from the textile factories found themselves in worse situations: A report by British development organization Oxfam revealed that those children ended up in even more dangerous work, such as welding or even prostitution. Although initially intended to limit the rapidity of growth in the market, its country-by-country allotments also acted to protect the supplier markets. Rather than arriving completely out of the blue, the news reached Gap earlier, giving the company more time to prepare its response. Employee sustainability: if the firm delights customers by working its employees literally to death, it is not sustainable: even if it replaces them, this is not, as even Apple [AAPL] has found, an enduring way to run a business. Instead, Gap responded as it had in India — quickly and proactively. Identify the material issues.
And also read:. It learned that savvier and influential stakeholders, many with years of practical experience observing conditions in the factories, had come to realize that the impact of monitoring was often negligible and that capacity building, training and purchasing practices are also key factors.
The Indian government, working with a local child labor NGO, BBA Bachpan Bachao Andolanmanaged the initial remedial treatment of the children in question and made sure they were taken care of.
Engagement can be most effective when the company is considering changes to products, processes or organizational strategies.Instead, Gap responded as it had in India — quickly and proactively. Parmar and S. Gap stayed because experience had shown executives that pulling out can lead to even worse outcomes for child laborers. The U. It is often expensive and slow. The stakeholder communication served as an informal complaint mechanism on factory problems, enabling the company to respond earlier to emerging issues. The chief executive confirms that protecting shareholder value is what is driving decision making. This tactic paid off in , the year the Multi Fiber Arrangement was phased out. Drumwright and M. Criteria for evaluating the depth of stakeholder engagement generally evaluate management processes and procedures.