GAP$$S EVOLVING VIEW OF ETHICS In the $1990$s$,$ shoe and clothing retailers faced a flood of stories focusing on wage and safety violations in its company owned overseas factories. Much like the controversy today about Apple iphones being made in sweatshops in China. Companies were forced to confront critics and repair the damage to their reputations. The first reaction of the Gap, was to clam up and go into fix$-$it mode. It built an elaborate monitoring system, which performs more than $8,500$ factory inspections. But the company gradually realized that this internal monitoring system was not changing public and industry perceptions. Although Gap monitored $100\%$ of its overseas factories for abuses, no one outside the company knew it$.$ Recently the company was targeted again when Domini Social Investments and other investors filed a shareholder resolution requesting greater transparency from the company. Gap was forced to publish a $$social$-$responsibility$$ report. However, instead of producing a sanitized report glossing over the problems, Gap decided to produce a warts$-$and$-$all profile of the problems facing the company. This negatively affected the price of GAP stock on the New York stock exchange. The report found persistent wage, health, and safety violations in most regions where it does business, including China, Africa, India, and Central and South America. The infractions ranged from failure to provide proper protective equipment to physical abuse. Although discoveries of the worst violations were rare, Gap reported that it had pulled its business from $136$ factories and turned down bids from more than $100$ others when they failed to meet its labour standards. The clothing retailer also committed to making changes that are more sweeping. Most significantly, Gap has agreed to rethink accepted garment$-$industry business practices, which include unrealistic production cycles that drive such abuses as unpaid overtime. Even the company$$s harshest critics welcome the company$$s openness. $$Instead of dealing with a black box, we now have a window into data that can really help us make a judgment on how the company is progressing in handling of these issues,$$ says Conrad MacKerron, a director at As You Sow, a non$-$profit shareholder advocacy group. $$This will put pressure on other retailers to do the same.$$ Sources: Cheryl Dahle, $$Gap$$s New Look: The See$-$Through,$$ Fast Company, September $2004,69-71$; and Kimberly Terry, $$Gap fnc$.$ Makes $2006100$ Best Corporate Citizens$$ List,$$ CNNMoney.com, $27$ April $2006.$ Answer the following questions after reading the above case $(20$ Points: $5$ points EACH$)1.$ What are the most important things in choosing a location for a factory? Why did choose their locations? $2.$ Evaluate the factors that are affecting GAP while trading in the global market. $3.$ Which type of foreign market entry strategy $($exporting$,$ franchising etc.$)$ did the GAP use? Was this the best way to go international? If not what would have been a better foreign entry strategy? $4.$ Which of the GAP$$s stakeholders were affected by their business practices.