The Wal-Mart Effect: How the World's Most Powerful Company Really Works - and How It's Transforming the American Economy

Charles Fishman’s nonfiction text The Wal-Mart Effect is a work of investigative journalism. Originally published in 2006, The Wal-Mart Effect appeared on the literary market amidst a tradition of similar investigative works examining corporations’ impacts on society. Since its publication, the text has inspired ongoing debates about globalization, sustainability, and fair labor practices. Fishman also established himself as a leading voice in business and corporate reporting via his work on the book. His reporting for the text earned him one of his Gerald Loeb Awards.

Throughout the text, Fishman seeks to understand the far-reaching effects of Wal-Mart’s corporate policies, founding philosophies, and workplace practices. Fishman interviews a litany of subjects, including former Wal-Mart CEOs and managers, former Wal-Mart suppliers, and Wal-Mart customers. Fishman also incorporates into his journalistic reporting his own personal experiences shopping at Wal-Mart and speaking with research subjects. Fishman references various economic and scholarly studies in order to fortify his claims or to develop his arguments. True to Fishman’s renowned journalistic style, Fishman renders complex corporate speak, economic data, and business analytics into accessible, conversational language. He relies upon the concept of the “Wal-Mart effect” as a throughline for his explorations of the Impact of Corporate Policies on Suppliers and Competitors, the Trade-Offs of Low-Cost Consumer Goods, and the Ethical Concerns in Global Supply Chains. The text is organized into an Introduction, nine numerical and titled chapters, an Epilogue, and an Afterword.

This guide refers to the 2011 Penguin Press paperback edition of the text.

Summary

In 2011, Charles Fishman sat down with former Wal-Mart CEO Lee Scott. He and Scott discussed Scott’s five-year tenure with the corporation. Scott specifically told Fishman about his more recent investment in sustainability and the ways in which he implemented environmentally-conscious practices at Wal-Mart toward the end of his time with the company.

Fishman acknowledges the importance of Scott’s new outlook and environmental awareness. However, he argues that Wal-Mart’s more recent changes aren’t enough. He holds that Wal-Mart still operates under the same principles and policies it did when Fishman originally researched the company in the early 2000s.

Fishman examines Wal-Mart’s history. Sam Walton opened the first Wal-Mart store in Arkansas in 1962. He founded the company on principles of hard work and determination. His original store also had one primary mission: to offer necessities to customers at a consistently low cost. The company has since grown and has stores all over the United States and the world. Fishman interviews other former Wal-Mart employees and asks them about their impressions of Wal-Mart’s ethos.

Fishman describes Wal-Mart’s relationships with several of its key suppliers. He references Wal-Mart’s contracts with companies including Vlasic Pickles, Sara Lee, Levi Strauss, and the L. R. Sprinkler company. Fishman describes how every supplier felt squeezed by Wal-Mart’s demands throughout their time with the company. Wal-Mart insisted that they sell their product at a low price, causing the companies to skimp on materials and labor. As a result, they sold cheaper, less sustainable products.

Jim Wier of Snapper, a lawn care equipment company, was the only supplier Fishman found who refused to change his product to meet Wal-Mart’s demands. When Wal-Mart told him to lower the price of his lawn mowers and snowblowers, Wier refused and ended his contract with the company. He took the cut in sales, stating that he didn’t want to sell unreliable equipment.

Fishman then describes his conversation with Rodrigo Pizarro, a representative involved in Chilean sustainability practices. Pizarro was aware of Wal-Mart’s impact on Chilean salmon farms and factories. He told Fishman that the conditions were so poor because the facilities could not keep up with Wal-Mart’s demands. Fishman discovers that textile factories in Bangladesh have similar testimonies. According to Fishman, in spite of lawsuits against Wal-Mart for its unfair labor practices and abusive factory conditions, the corporation did little to make its facilities more humane.

Fishman describes his conversations with Wal-Mart customers who have complicated relationships with the store. Some shoppers disliked Wal-Mart but couldn’t afford Wal-Mart competitors. Some shoppers liked Wal-Mart but wanted to support other local businesses, too. Fishman conducts research on why these shopping dichotomies exist and makes conjectures about how Wal-Mart has impacted retail culture.

Fishman then reflects on all of the ways that Wal-Mart impacts the lives, companies, and communities it touches. He makes suggestions for how the company can change, insisting that Wal-Mart must hold itself responsible and embrace self-awareness and transparency in order to heal its reputation and relationships.

Fishman presents a transcript of his interviews with five women who once worked at L. R. Nelson. The women told Fishman about how much they enjoyed working at Nelson in the early years of their tenure with the company. Their experiences changed, however, once Nelson started supplying for Wal-Mart. Eventually, this relationship cost the women their jobs.

Fishman finally secures an invitation to Wal-Mart headquarters in Arkansas. He takes a tour and gives a talk at the facility. He acknowledges how his book has impacted Wal-Mart and upset the company’s officials. However, he also states how important it is for Wal-Mart to change.