53 pages • 1 hour read
Charles FishmanThe Wal-Mart Effect: How the World's Most Powerful Company Really Works - and How It's Transforming the American Economy
Nonfiction | Book | Adult | Published in 2006A modern alternative to SparkNotes and CliffsNotes, SuperSummary offers high-quality Study Guides with detailed chapter summaries and analysis of major themes, characters, and more.
Introduction-Chapter 1Chapter Summaries & Analyses
Introduction Summary: “Has Wal-Mart Found Its Soul?”
Fishman writes that Lee Scott was the CEO of Wal-Mart from 2000 to 2005. During his tenure, the corporation grew, but criticism against Wal-Mart developed throughout the United States. Organizations like Wal-Mart Watch and Wake Up Wal-Mart criticized Wal-Mart’s policies, new stores, and philosophy. Fishman writes that he spoke with Scott about his experience running a company that was both successful and demonized (ix). They met in Scott’s Florida home in 2010 after Scott turned his job over to Mike Duke. In their conversation, Scott explained that he sought help from President Bill Clinton about “how to blunt the attacks” against Wal-Mart (x). President Clinton encouraged him to think differently about the situation, because no one was responding to the facts the company put out in their own defense. Scott eventually stopped ignoring critics and rounded up a panel of officials and experts at Wal-Mart’s headquarters in Bentonville, Arkansas. Attendees included Thomas “Mack” McLarty, Al Gore, E. O. Wilson, Jared Diamond, and the Reverend Al Sharpton. The panel advised Scott on how to better the company and respond to attacks. The meeting helped Scott understand Wal-Mart’s real problems and the need to give Wal-Mart a better story (xiv).
Fishman describes how, in the original edition of The Wal-Mart Effect, he explains the ways in which Wal-Mart revolutionized the national and global economies. Since the text’s publication, Wal-Mart has launched another revolution, this time inspired by Scott’s attempts to listen and respond to criticisms. In particular, the company has begun efforts to make their practices more sustainable. Beginning in 2006, Wal-Mart has been working with the Environmental Defense Fund, or EDF, to institute these changes. EDF vice president Gwen Ruta is encouraged by this work and told Fishman how important Wal-Mart’s sustainability efforts are to environmental change.
Fishman notes that, by 2010, Wal-Mart’s sustainability efforts have cut down on waste, electricity, energy, and oil. Wal-Mart’s vice president Charles Zimmerman told Fishman how simple and effective these measures have been.
Wal-Mart has also kept some of its practices the same, Fishman notes. They still don’t pay employees for the first day of sick leave, and they exponentially discount items in order to create price wars with competitors. The company is still using its same models, culture, and mission, despite its sustainability measures. Former senior vice president of sustainability, Matt Kistler, told Fishman that the sustainability work hasn’t inhibited Wal-Mart’s ability to buy for less, sell for less, and grow their sales (xxvi).
In Fishman’s conversation with Scott, Scott expressed his surprise that some of their sustainability measures have still been met with criticism. Other Wal-Mart employees including Andrea Thomas and Pam Kohn told Fishman how excited they are about instating sustainability measures while still keeping prices low, per the Wal-Mart mission (xxix). Fishman remarks upon these conversations and the research he’s done in the years since his book’s original publication, explaining why the text is still relevant (xxx).
Chapter 1 Summary: “Who Knew Shopping Was So Important?”
Fishman writes that, in the early 1990s, deodorant companies stopped packaging deodorant in cardboard boxes. The change reduced cardboard waste and shipping costs for companies like Wal-Mart. However, the change also cost paperboard-box manufacturers and supplies their jobs. Fishman notes that this change, inspired by Wal-Mart, is an example of the Wal-Mart effect and how Wal-Mart impacts the economy.
Wal-Mart similarly changed the grocery industry. In 1990, Wal-Mart had nine supercenters and didn’t sell groceries. The national market was dominated by Albertsons, Safeway, and Kroger. By 2000, Wal-Mart had 888 stores and became the leading food retailer in the United States (3). Wal-Mart’s grocery department offered less expensive food and impacted its competitors nationwide, and Fishman notes this phenomenon as another example of the Wal-Mart effect. He goes on to explain how Wal-Mart shapes the way that consumers shop, the products they buy, and the prices they pay (5). Most Americans live within a few miles of Wal-Mart supercenters, and Fishman notes that Wal-Mart employs millions of workers and is mentioned in the news on a regular basis.
Sam Walton opened the first Wal-Mart store in Arkansas in 1962. His mission was to sell products people wanted at low prices. Wal-Mart had to work with suppliers to save “every penny of cost” as Wal-Mart grew (8). Ever since, Wal-Mart’s reach has been expansive, affecting grocery chains, retail prices, and shopping suburbanization. Wal-Mart has created a new economy as a result. Initially, Sears, Kmart, and Toys “R” Us were Wal-Mart’s competitors. Fishman notes, however, that Wal-Mart grew so quickly that they surpassed these companies and changed the economy as a whole (11).
Under Walton, Wal-Mart remained true to its values in spite of its growth. The company also followed Walton’s original mission to employ ordinary people and to promote discipline, growth, and innovation (13). According to Fishman, following Walton’s resignation and death, Wal-Mart hasn’t been able to maintain these same values, although the company continues to focus on low prices.
Fishman describes his own relationship with Wal-Mart. He writes that he doesn’t enjoy shopping there, but does so to buy necessities for low prices. These shopping trips require his care, attention, and fortitude. Sometimes he wonders how Wal-Mart’s prices don’t change no matter how many years pass. One year, his local Wal-Mart underwent a renovation, but didn’t shut its doors, and the store remained busy in spite of its disorder.
Fishman compares his Wal-Mart shopping experience to his wife’s. He wonders what others experience while shopping here, and if they do so in spite of negative experiences. He raises various questions about Wal-Mart’s operations, prices, and customers, adding that Wal-Mart began humbly but now has an astonishing national and global reach affecting countless citizens like Fishman.
Introduction-Chapter 1 Analysis
The opening chapters introduce Fishman’s primary subject matter, arguments, questions, and claims. The Introduction and Chapter 1 therefore describe Wal-Mart’s history, evolution, and reception. Fishman uses these leading sections to establish the organization’s role in the national and global economies, which helps to set the stage for a central claim in the book regarding Ethical Concerns in Global Supply Chains. In the Introduction, he reflects on his original research and reportage at the time of the text’s 2006 publication while incorporating new journalistic findings. Published in a new edition of the text, the 2011 Introduction provides insight into Fishman’s original findings while adding nuance to Fishman’s overarching arguments. Chapter 1 begins the heart of the text and thus focuses on Wal-Mart’s beginnings, its growth over the years, and its increasing impact on its competitors, its suppliers, and its customers.
By using both a familiar and a critical tone, the text presents Fishman as a trustworthy source. In the Introduction, Fishman incorporates narrative details into his journalistic recounting. For example, when he describes his conversation with former Wal-Mart CEO Lee Scott, he sets the scene in the following manner: “Sitting in the living room of his home on the west coast of Florida, Scott is looking anything but combative. It’s a Friday morning in late 2010, eighteen months after he turned over the Wal-Mart CEO job to Mike Duke, and Scott is relaxed, in khakis and an open-collared golf shirt, a day’s growth of gray stubble on his face” (x). This passage humanizes Scott, making him easier to identify with. Scott has been the proverbial face of Wal-Mart from 2000 to 2005 and has thus been demonized and vilified because of how critics have seen his company. Fishman brackets these impressions of Scott and asks his audience to regard Scott as an ordinary, although fallible man. The impact is that this passage affects a familiar tone that Fishman’s complex work of investigative journalism more accessible, rendering Fishman’s research as approachable as he paints Scott to be.
The language that Fishman uses in the aforementioned narrative passage contrasts with the language he uses in his surrounding, analytical passages throughout the Introduction. When reflecting on his original The Wal-Mart Effect text, Fishman says that the text
describes a revolution—a transformation of retailing, of pricing, of where and how products are manufactured, even a revolution in our own attitudes about what things should cost. That is the revolution Wal-Mart wrought, across the US economy and the global economy (xiv).
Fishman’s tone is more direct and assertive in this passage. He is making claims about his subject, without softening these claims through the use of descriptive, narrative details. Fishman employs similar stylistic and rhetorical patterns when he compares and contrasts Wal-Mart’s new sustainability efforts with Wal-Mart’s continued ethical problems. He lays out the facts on both sides of this argument and makes direct assertions about Wal-Mart’s continued impact on American society in particular.
Chapter 1 employs similar formal techniques, incorporating human and narrative details in order to engender a sense of Fishman’s trustworthiness and to enhance the readability of the text. For example, Fishman opens the chapter with a storied description of the deodorant business and packaging trends. This historical and economic anecdote is “a perfect Wal-Mart moment” that establishes Fishman’s argument (2). The deodorant and the subsequent grocery examples ground Fishman’s journalistic assertions in time and space, making his claims about the Wal-Mart effect and Wal-Mart’s economic impact relatable and concrete. The same is true of Fishman’s first-person descriptions of his own Wal-Mart experiences at the end of the chapter. Such moments make concrete Fishman’s ongoing investigations and economic theories, enhancing the text’s relevance and accessibility. Furthermore, Fishman’s use of anecdotes illustrate his developing arguments about how Wal-Mart impacts every consumer and every facet of contemporary life, laying the groundwork for a key theme of the text regarding Trade-Offs of Low-Cost Consumer Goods.
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