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

by Charles Fishman (Author) "Starting in the early 1990s, a change swept through a line of products that most adult Americans use every day..." (more)
Key Phrases: new retail jobs, blue stripers, bacon dish, United States, Makin Bacon, Sam Walton (more...)

Editorial Reviews

From Publishers Weekly
Fishman shops at Wal-Mart and has obvious affection for its price-cutting, hard-nosed ethos. He also understands that the story of Wal-Mart is really the story of the transformation of the American economy over the past 20 years. He's careful to present the consumer benefits of Wal-Mart's staggering growth and to place Wal-Mart in the larger context of globalization and the rise of mega-corporations. But he also presents the case against Wal-Mart in arresting detail, and his carefully balanced approach only makes the downside of Wal-Mart's market dominance more vivid. Through interviews with former Wal-Mart insiders and current suppliers, Fishman puts readers inside the company's penny-pinching mindset and shows how Wal-Mart's mania to reduce prices has driven suppliers into bankruptcy and sent factory jobs overseas. He surveys the research on Wal-Mart's effects on local retailers, details the environmental impact of its farm-raised salmon and exposes the abuse of workers in a supplier's Bangladesh factory. In Fishman's view, the "Wal-Mart effect" is double-edged: consumers benefit from lower prices, even if they don't shop at Wal-Mart, but Wal-Mart has the power of life and death over its suppliers. Wal-Mart, he suggests, is too big to be subject to market forces or traditional rules. In the end, Fishman sees Wal-Mart as neither good nor evil, but simply a fact of modern life that can barely be comprehended, let alone controlled.
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

From Booklist
The "Wal-Mart effect" has become a common phrase in the vocabulary of economists and includes a broad range of effects, such as forcing local competitors out of business, driving down wages, and keeping inflation low and productivity high. On a global scale, Wal-Mart's relentless commitment to "everyday low prices" has had a massive impact on the trend toward importing from countries like China and the resultant loss of manufacturing jobs here. Because of its strict policy on secrecy, surprisingly little is known about the inside workings of the largest corporation ever in the U.S and now the world. Although much has been written before on the legendary story of Sam Walton, Fishman finally takes us inside the carefully guarded workings of the "Wal-Mart ecosystem," where management surrender their lives and families, working 12 hours a day, six days a week, in a near-holy quest toward the never-ending goal of lower prices. He brings to light the serious repercussions that are occurring as consumers and suppliers have become locked in an addiction to massive sales of cheaper and cheaper goods. David Siegfried
Copyright © American Library Association. All rights reserved --This text refers to the Hardcover edition.

See all Editorial Reviews

Product Details

• Paperback: 336 pages
• Publisher: Penguin (Non-Classics) (December 26, 2006)
• Language: English
• ISBN-10: 0143038788
• ISBN-13: 978-0143038788
• Product Dimensions: 8.4 x 5.4 x 0.8 inches
• Shipping Weight: 10.4 ounces (View shipping rates and policies)
• Average Customer Review: 4.4 out of 5 stars See all reviews (108 customer reviews)
• Amazon.com Sales Rank: #17,646 in Books (See Bestsellers in Books)

  Popular in these categories: (What's this?)

  #15 in	Books > Business & Investing > Industries & Professions > Retailing
  #35 in	Books > Business & Investing > Economics > Economic History
  #38 in	Books > Business & Investing > Biography & History > Company Profiles

Customer Reviews

Most Helpful Customer Reviews

66 of 71 people found the following review helpful:

5.0 out of 5 stars Wal-Mart Culture, February 1, 2006

By	Kerry Walters (Lewisburg, PA USA) - See all my reviews (TOP 50 REVIEWER)    (REAL NAME)

This review is from: The Wal-Mart Effect: How the World's Most Powerful Company Really Works--and How It's Transforming the American Economy (Hardcover)

Wal-Mart, one of the world's largest economies (it accounts for an astounding 2% of the U.S. gross domestic product, and in any given week, 100 million people--half the adult population in the U.S.--shop at Wal-Mart!), has taken it on the chin in recent years. John Dicker's _United States of Wal-Mart_, Bill Quinn's _How Wal-Mart Is Destroying America and the World_, and the recent film "Wal-Mart: The High Cost of Low Price," are all examples of this trend. Each of them documents Wal-Mart's low wages and benefits, its take-no-prisoners competitiveness that slashes-and-burns local business and guts local main streets, and its willingess to buy sweat-shop goods.

In his _Wal-Mart Effect_, Fishman doesn't deny the pernicious practices of Wal-Mart. But the more interesting feature of his book is his analysis of the culture that Wal-Mart has created in the United States. In a word, Wal-Mart has trained the American consumer to expect and to demand low prices, and to immediately suspect that any commodity that has a higher price tag than its Wal-Mart equivalent must be a rip-off. The Wal-Mart ethos, in other words, has replaced traditional consumer concern for high quality with low cost as the primary criterion.

This replacement of quality with cheapness is troubling enough (think of the environmental effect of buying cheap crap that quickly winds up in a landfill). But Fishman goes on to show that the new culture of low costs means that Wal-Mart must relentlessly scurry to satisfy the customer demands that its practices have created. So Wal-Mart increasingly buys off-shore sweat shop products to keep down prices, and in the process is forcing more and more American wholesellers, already struggling to survive, to shut down their U.S. operations and move overseas where labor and production costs are lower.

Fishman is careful to point out that Wal-Mart really does offer commodities--especially groceries, which Wal-Mart offers about 15% cheaper than its competitors--at lower prices, and this is no small benefit for folks who live on the economic margins (a steadily growing demographic group). But the hidden cost of the low prices is a disturbing cultural and economic transformation: a disregard for quality and the outsourcing of America.

Highly recommended.

74 of 82 people found the following review helpful:

5.0 out of 5 stars Like or hate the place, Walmart affects us all.....but do you know how much? , February 2, 2006

By	K. Corn "reviewer" (Indianapolis,, IN United States) - See all my reviews (TOP 100 REVIEWER)

This review is from: The Wal-Mart Effect: How the World's Most Powerful Company Really Works--and How It's Transforming the American Economy (Hardcover)

After seeing a rather frightening documentary about the worst of Walmart's business practices, I decided to have a look at his book. I'm glad I did because I learned quite a few things that weren't exactly public information...in fact, they might actually be company secrets.

Mostly, though, I got a glimpse into the ways Wal-Mart affects our economy, for good and ill, with their relentless search for low prices (which consumers seem to love, not realizing how this could weaken our economy), to the bully tactics used to force suppliers to offer the "lowest price", even in the wake of higher costs for raw materials and other factors that make price cuts near impossible, below a certain level.

The result? Wal-mart often buys from manufacturers who produce products overseas (they can often produce products for prices cheaper than American companies), lessening the benefit to the American companies and actually forcing many longtime name brands out of business. Gone are many of the familiar names we used to see on store shelves and others are hard-pressed to stay in business (Rubbermaid learned a hard lesson when it tried to buck the Walmart dictates and Walmart retaliated) or are forced to lessen the quality of what they offer.

Anyone who lives near Walmart (and who doesn't?) should read this book to get a real idea of how the company influences nearly every product you buy.

Why? Because the Walmart "formula" is one more and more companes are being forced to imitate. Yes, this may result in lower prices for many products but is the overall longterm effect good for us- and our economy? That is a major issue addressed in the book.

By the way, an excerpt from this book appeared in a national magazine and led to what that magazine called the most powerful response from its readers IN THE HISTORY OF THE MAGAZINE. So be prepared for the author to keep you glued to the pages.

53 of 59 people found the following review helpful:

3.0 out of 5 stars The world Wal-mart made flat, May 20, 2007

By	Peter Lorenzi (Maryland, USA) - See all my reviews (TOP 1000 REVIEWER)

Charles Fishman is a lot like Thomas Friedman, only on a limited travel budget. Both authors look at the world, collect data, talk to a lot of people and pundits, write best-selling books and take on an air of expertise. What they both really have is this "Gee whiz, can you imagine that?" view of the world. Much of their writing offers little real insight or recommendations and sometimes only very little food for thought. They sell a lot of books and this apparently causes their audience to confuse writing for thinking, speaking for knowing, and words for wisdom.

Wal-mart is huge - duh! Fishman would probably liken them to the Death Star in "Star wars," while a Wal-Mart executive likens the firm to Baby Huey - young, huge, immature, and prone to making large but largely innocent errors. Neither simile works. All the apocalyptic hyperbole about Wal-mart taking over the world economy or outsourcing all of America should be taken for just that, hyperbole. Fishman laments (p. 241) that the twenty largest firms today account for twenty percent of the nation's economy, while twenty years ago it took thirty firms to capture twenty percent of the market. What he fails to discuss is who used to be among the top thirty firms back then and where they are today. And he ignores the fact that the American economy has grown so much that the dollar value of the economy outside the control of the top twenty firms is growing even faster. And he completely ignores the world economy, growing faster still. And, like Friedman, he ignores the lessons of history. Twenty years ago, IBM and Japan would have been the villains in this book, not Wal-mart and China. Forty years ago it would have been General Motors and the Soviet Union. Fifty years ago, Bethlehem Steel and... well, no foreign country, as the world economy was in pretty bad shape after World War II. It probably would have been the UAW.

Fishman attacks Wal-mart for making use of government health care for their employees at a time when many large American firms are clamoring for even more of that. He ignores the failed effort to force Wal-mart to spend more on employee health care, known to be bad business practice by the states and, for that matter, ruled illegal by the courts. He reports stories of American employees making quality products being displaced by cheap foreign labor making shoddy, low-quality goods. These displaced employees then shop at Wal-mart knowing better than anyone that they are buying cheap, shoddy, low-quality goods. Fishman and these displaced employees, along with millions of other Wal-mart shoppers, confuse price with value. Fishman is dismissive of the growth of stores like Target and Kohl's, stores that ignore the "low prices always" motto and replace it with a better shopping experience. He can't really grasp why Wal-mart same store growth is waning. He shows little interest in or appreciation for Wal-mart's efforts to go green, to save energy, to share ideas. Maybe they are responses to criticism; and just maybe, these acts are too little, too late to stave off the decline of Baby Huey.

Wal-mart has mastered logistics and supply-chain management to a level that wins universal admiration. They flattened the world well before Friedman noticed. When Hurricane Katrina hit, Wal-mart, not government regulators or regulations worked best to solve problems. But being good at what you do and very big makes people envious, curious and suspicious. What Fishman seems to really despise is Wal-mart's ability to keep secrets. He seems intent on opening up Wal-mart's books, to force them to tell the world and their competitors their market volume and share. He thinks the government should force Wal-mart to be more open, just as the government "forced" auto firms to achieve higher fleet gas mileage. When Wal-mart says they hope to double the mileage of their trucking fleet, Fishman seems to prefer another useless, inefficient, ill-advised government program.

The unwritten lesson is that if you want enduring, sustainable value in your purchases, your life, and your economy, you'd think twice before shopping at Wal-mart, and maybe you wouldn't shop there at all. And you certainly would not purchase any state lottery tickets. Or smoke cigarettes. But that doesn't make Wal-mart evil.