With the Gap embarrassed this week by reports that Indian children as young as 10 were making Gap Kids clothing, a lot of people are asking, just how frequently and to what degree do large U.S. companies like Gap and Wal-Mart monitor their foreign manufacturers? According to Slate, “anywhere from six months to once every several years.” Unfortunately, because the visits are usually announced ahead of time, factories can hide violations, coach employees on what to say, get rid of the child workers, and forge records. In China, there are consultants who will prepare a factory for inspection, going so far as to fake missing records.
A new market research study of over 3600 consumers has confirmed that there are some key things that will quickly erode any trust a customer has in a company: unethical behavior, bad customer service, and outdated products and services. The bad news is that the study was conducted in Europe, which makes us wonder if U.S. companies will pay any attention.