How Gap Inc. Engaged With its Stakeholders Harvard Case Solution & Analysis

Allegations of violations of labor rights and environmental damage are common for major brands that the source of global supply chains. However, the brand is trying to police the food chain to ensure compliance with company standards rarely be an effective long-term solution. Frustrated with the limitations of a typical compliance-oriented approach and after the significant human and financial resources with senior management buy-in, clothing retailer Gap Inc. has taken the strategy of interaction with stakeholders. Stakeholder theory that such an approach would be more effective in fulfilling corporate social responsibility and other business purpose than focusing on compliance, but many companies are still focused on the police work of the supply chain and environmental standards. Gap's successful experiment involving stakeholders confirmed academic intuitions about the meaning of stakeholder engagement. For Gap, the transition to a strategy of engagement with stakeholders helped to build its image as an honest company and improve outcomes for workers subcontractor postpartum disorders were found. After a few years of this practice, Gap have both further improve the working conditions of employees of contractors and reducing the company's status as a target for anti-globalization protests and other activists. Long supply chain gap is not uncommon, as well as the problem of monitoring the social performance of thousands of subcontractors. Proactive engagement with stakeholders can help prevent problems in the supply chain (and others) to solve problems faster when they appear., And increase confidence in the company and efficiency through partnerships with labor, environmental activists and the general public "Hide
by N. Craig Smith, Sean Ansett, Lior Erez Source: MIT Sloan Management Review 8 pages. Publication Date: July 1, 2011. Prod. #: SMR393-PDF-ENG

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