1. Outline the key players of the P.A.C.E. program.

What challenges do they face in trying to be effective

in their respective roles?

• Corporate Board - Boards faced challenges on how to derive on a good social investments that
will also contribute in the good business performance and high brand equity.

• Customers - Customers may also have difficulty understanding the value and impact of these
global social programs when these are not issues that they can directly experience. For example,
if the company increases the price of their products because of increased production costs,
customers may choose to buy less expensive brand if they do not know of or understand the
difference in cost, quality, or supply chain management. Gap needs to educate and inform their
consumers about their social investments and how they result in a higher quality product and
importantly a better life for those who are producing the products.

• P.A.C.E. Program Staff - challenges for P.A.C.E. program staff include location/distance, language
barriers and a potential lack of reliable information.

• Gap Inc. Employees - It is very challenging for the part of the management to make sure that
their employees are well informed on the latest program developments. Like the challenges in
the P.A.C.E. program staffs location/distance may also be a challenge. It will be difficult for
employees to fully appreciate and understand the impact of the programs as, for many, they will
never see the impact of this work.

• NGO Partners - there are some difference between the perspectives and priorities of Gap and
its NGO partners. NGO partners acceptance in Gap’s direction that might limit them from doing
their own process. For example, CARE wants to see improvement in the health in factories,
whereas Gap Inc.’s main goal is to reduced absenteeism. There are challenges also again in
location/distance since coordination and communication takes some time since there are places
with different timelines and schedules.

• Factory Owners - As factory workers become more educated, they might choose to a better
opportunity in other company and demand more pay. There may be also challenges in balancing
the time needed in the overall productivity/output and in providing the P.A.C.E. program to
employees in the factory.

• Factory Managers - Tensions may began between managers and employees as the employees
become more empowered through the P.A.C.E. program. Arguments might occur especially in
times that employees start to express their personal opinions and reactions towards the direction
given by the manager.

• Factory Workers - Factory workers must determine the opportunity cost of a program like
P.A.C.E.—their having their busy lives and the program will take much of their time during the
execution. There might be family tension if the program takes them away from the household or
weakens the patriarchy of the household. The time they usually spent for household was used
and taken away by the program. Another challenge for the workers enrolled in the program is
that once the program is complete, does the participant will try to find a new job or stay in a
current role?
 • The community - The communities where the workers return to may struggle to incorporate
empowered women from the P.A.C.E. program with their traditional cultural values. The program
makes women more job-oriented, and thus may remove them from the house. Creating an impact
and making it different from the usual set up in the community wherein most of the women stays
at home and do household choirs and take care of their children.

• Local or National Governments - The P.A.C.E program may affect local or national governments
by making factory employees empowered and thus, citizens, more aware of their rights.

2. Which partnerships are critical to Gap Inc.’s ability to run the P.A.C.E. program and why? What new
partnerships could Gap Inc. create and how would they improve the effectiveness of the P.A.C.E.
program moving forward?

• CARE - Partner who helped implement the P.A.C.E. program in Bangladesh, Cambodia,
Indonesia, and Vietnam. Challenges in distance and language barriers make it critical for the
P.A.C.E. program to run.

• International Center for Research on Women (ICRW) - Provided expertise and reputational
credibility during program creation and evaluation design. ICRW implemented the P.A.C.E.
program’s first evaluation in 2007 and 2008. Challenges in distance and language barriers make
it critical for the P.A.C.E. program to run.

• Matha Tilaar Group - Gap Inc.’s first expansion of the P.A.C.E. program outside of the factory
setting and laid the groundwork for potential future scale.

• Factories that Produce Gap’s Clothing - Responsible for providing the garment workers who
went through the P.A.C.E. program. Factory owner buy-in was critical in ensuring that the P.A.C.E.
program was fully assimilated into the business operations of the factory.

• Partners in Media - Organizations like Forbes, GOOD, and The Daily Beast published articles on
the program and its impact. Critical for improvement of Gap Inc.’s reputation as well as proving
to Gap Inc.’s stakeholders the value of a program like P.A.C.E. Moreover, events like the Clinton
Global Initiative and the APEC Woman and the Economy Forum, Gap Inc. was able to present
numerous individuals that are interested in the P.A.C.E. program.

• Labor Initiatives - By partnering or affiliating with the International Labour Organization (ILO),
Social Accountability International, and the Ethical Trading Initiative, Gap Inc. was able to develop
a strong Vendor Code of Conduct, guaranteeing that subcontractors and factory workers were
aware of their rights, and that the P.A.C.E. program had a strong foundation which promote
worker empowerment.

Possible New Partnerships

 Other companies in both factory - based and non-factory based, that could partner to expand,
adapt and/or scale the P.A.C.E. program. International bodies such as UN and UNICEF could
support the program as it expands to new areas or new industries. Also, local associations, town
 councils, or religious organizations that could expand their training and provide new training in a
different environment outside the factory.

3. What tradeoffs should Gap Inc. consider as they think about expanding the P.A.C.E. program (both
within the company and beyond the factories manufacturing Gap Inc.’s products)?

Tradeoffs within the company that Gap Inc. needs to consider are: First is the business returns of the
P.A.C.E. program for the company workable and achievable? Is theirs a good effect to employee and
consumer behavior? Will a consumer shop at Gap Inc. stores more frequently or does employee retention
increase through the P.A.C.E. program? Or in vice versa the reputational effect is insignificant.

Second is considerations is does Gap Inc. need additional resources in expanding the existing P.A.C.E.
program versus launching a new one? Is P.A.C.E. program good enough or Gap Inc. needs to change and
create a better and new program? Evaluating the result and effect of the program is very important in
making sure that the program of Gap nc. Is beneficial to the company and if not they could start creating
a new one to avoid expansion risk.

Tradeoffs beyond the company that Gap Inc. needs to consider are the tradeoff between keeping the
P.A.C.E. program exclusive or making it open-source. If Gap Inc. keeps control of the program they
maintain a competitive advantage over other factories and consumers and have more control over the
quality and effectiveness of the program. By giving the control and making the program available for the
use of others, it may have a positive reputational effect for Gap Inc. and will allow others to repeat on the
program faster, but the effectiveness of the program may change especially as Gap Inc. loses control of it.

Another key consideration is the transferability of the program when it comes to the outside of the factory
and across borders. Every expansion requires new partnerships/relationships, marketing, context-based
adaptation of the program, and support from the local factory or business. Lastly, the adaptability of the
program if it was launched to different regions or industries.