Executive Reading: The Wal-Mart Effect
From July 2006
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By Charles Fishman
Penguin Press ISBN 1594200769
Reviewed by Margaret Teichert and Oleg Kaganovich
Wal-Mart started some 40 years ago in Bentonville, Ark., as a small-town five-and-dime with one guiding principal: always low prices. Today, Wal-Mart is not only the world’s largest corporation (its sales last year were nearly eight times as much as Microsoft Corp.’s), it’s the ultimate category killer. Leaving former behemoths such as Toys“R”Us in the dust, Wal-Mart is now the nation’s largest seller of toys (and furniture and jewelry and literally tons of other consumer products) by several billion dollars.
The cost of that success, however, is both profound and multifaceted. Charles Fishman, senior editor at
Fast Company magazine (and confessed occasional Wal-Mart shopper) has written a surprisingly even-handed assessment in “The Wal-Mart Effect.” For all of Wal-Mart’s power and ubiquity — on the landscape, in the economy, in the world — we know surprisingly little for certain about the company. Partly, this is due to the company’s culture of absolute secrecy (they forbid their suppliers to discuss their relationship with Wal-Mart). But it’s also because the economic influence Wal-Mart is able to wield with its suppliers and the areas in which it does business seem to make it impervious to challenge and accountability.
Through interviews with former Wal-Mart insiders and suppliers (the current ones won’t talk), Fishman gets readers deeper inside the company’s mindset than ever before. Bypassing the usual knee-jerk reactions (just try to find someone who feels ambivalent about Wal-Mart), Fishman poses a range of much deeper and more interesting questions as the basis for this book: Does Wal-Mart raise our standard of living as it lowers prices? Does it drive creativity and efficiency in its suppliers, or does it reduce profits to the point that nothing is left for innovation? Are we, as Americans, shopping ourselves out of good jobs and a safe environment? And if we’re so concerned about the company’s global impact, why do we continue to shop there? What makes Wal-Mart both so infuriating and so irresistible?
To his considerable credit, Fishman takes the range and complexity of questions about Wal-Mart seriously. He doesn’t sugar-coat the ways in which Wal-Mart has sanctified frugality at the expense of nearly all else. The company’s obsessive focus on bringing customers the lowest prices, Fishman writes, “is also the cause of troubling elements of the Wal-Mart effect: low wages, unrelenting pressure on suppliers, products cheap in quality as well as price, and off-shoring of jobs.” More, it has changed our sense of what things should cost, from light bulbs and bicycles to fresh salmon. He also shows how the company has thrived because of us. Opening a “big box” store like Wal-Mart can be a big — if temporary — boost for a region. It creates new jobs, more sales taxes, and happy bargain-hunting shoppers who shake their heads at the marvel of finding a product so much cheaper here, and wonder, “How do they do it?”
Continued...
Penguin Press ISBN 1594200769
Reviewed by Margaret Teichert and Oleg Kaganovich
Wal-Mart started some 40 years ago in Bentonville, Ark., as a small-town five-and-dime with one guiding principal: always low prices. Today, Wal-Mart is not only the world’s largest corporation (its sales last year were nearly eight times as much as Microsoft Corp.’s), it’s the ultimate category killer. Leaving former behemoths such as Toys“R”Us in the dust, Wal-Mart is now the nation’s largest seller of toys (and furniture and jewelry and literally tons of other consumer products) by several billion dollars.
The cost of that success, however, is both profound and multifaceted. Charles Fishman, senior editor at
Fast Company magazine (and confessed occasional Wal-Mart shopper) has written a surprisingly even-handed assessment in “The Wal-Mart Effect.” For all of Wal-Mart’s power and ubiquity — on the landscape, in the economy, in the world — we know surprisingly little for certain about the company. Partly, this is due to the company’s culture of absolute secrecy (they forbid their suppliers to discuss their relationship with Wal-Mart). But it’s also because the economic influence Wal-Mart is able to wield with its suppliers and the areas in which it does business seem to make it impervious to challenge and accountability.
Through interviews with former Wal-Mart insiders and suppliers (the current ones won’t talk), Fishman gets readers deeper inside the company’s mindset than ever before. Bypassing the usual knee-jerk reactions (just try to find someone who feels ambivalent about Wal-Mart), Fishman poses a range of much deeper and more interesting questions as the basis for this book: Does Wal-Mart raise our standard of living as it lowers prices? Does it drive creativity and efficiency in its suppliers, or does it reduce profits to the point that nothing is left for innovation? Are we, as Americans, shopping ourselves out of good jobs and a safe environment? And if we’re so concerned about the company’s global impact, why do we continue to shop there? What makes Wal-Mart both so infuriating and so irresistible?
To his considerable credit, Fishman takes the range and complexity of questions about Wal-Mart seriously. He doesn’t sugar-coat the ways in which Wal-Mart has sanctified frugality at the expense of nearly all else. The company’s obsessive focus on bringing customers the lowest prices, Fishman writes, “is also the cause of troubling elements of the Wal-Mart effect: low wages, unrelenting pressure on suppliers, products cheap in quality as well as price, and off-shoring of jobs.” More, it has changed our sense of what things should cost, from light bulbs and bicycles to fresh salmon. He also shows how the company has thrived because of us. Opening a “big box” store like Wal-Mart can be a big — if temporary — boost for a region. It creates new jobs, more sales taxes, and happy bargain-hunting shoppers who shake their heads at the marvel of finding a product so much cheaper here, and wonder, “How do they do it?”
Continued...
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