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.
Chapters 2-3Chapter Summaries & Analyses
Chapter 2 Summary: “Sam Walton’s Ten-Pound Bass”
Longtime Wal-Mart employee Larry English grew up in the small town of Harrison, Arkansas. He began working at Wal-Mart’s second store when he was 14. In a meeting with Fishman, English describes Wal-Mart #2’s appearance and explains his regard for the company in its early days. He worked under Don Whitaker, familiarly known as the Bear because of his gruff managerial style (24). English didn’t like the job at first, but wanted to prove himself to the Bear. He quickly learned “the key elements of the Wal-Mart culture” and eventually became manager of Wal-Mart #18 (24). He gained as much respect as the Bear throughout his tenure with the company.
Fishman shares that his conversations with English gave him a sense of the climate at Wal-Mart headquarters, which few people understand. The company is iconic, but even its customers and store employees know little about its operations. English told Fishman about the discipline required to work at Wal-Mart and the discipline valued in the company’s ethos. However, waves of criticism have revealed Wal-Mart’s unfair labor practices and the exploitation and mistreatment of its people. These claims contrast with Walton’s founding values.
Fishman also interviewed Lowell Kinder, an employee who began working for Wal-Mart in 1975. He explained how consuming the work was and how much the company valued working hard. In Kinder’s day, managers were required to work long hours. Another early manager named Ron Loveless said the same of his time at Wal-Mart. Walton was a workaholic and wanted his employees to uphold his same competitive, diligent standards (31). English reiterated these ideas, telling Fishman about the time he brought his daughter to work and she fell down a flight of stairs. English states that this incident made him realize that he couldn’t have any more children, because he didn’t want more than one child getting hurt this way (32). English’s family members worked for Wal-Mart, too, and made similar sacrifices to maintain their reputations at the company. They wanted to meet Walton’s standards, who worked up until his death in 1992.
Kinder told Fishman about working with Wal-Mart’s former CEO David Glass on sales and promotions, as well as developing Wal-Mart’s auto division.
The company expanded to include a pharmacy department in 1981. Walton hired pharmacist Clarence Archer of Phar-Mor to develop and head up the division. Archer told Fishman the struggles of this position, as it took years for him to make a profit with his pharmacy model.
Wal-Mart’s culture and philosophies have remained the same over the years. Kinder went on to tell Fishman about how hard he worked while with Wal-Mart, describing a trip he took with Walton one year and the remarks Walton made about hard work during the trip. Fishman notes that this model has helped Wal-Mart grow since their foundation. However, Wal-Mart has faced numerous lawsuits since 2005 for its alleged mistreatment of their employees. Fishman questions if these suits prove that Wal-Mart isn’t the same company that Walton left behind.
Chapter 3 Summary: “Makin Bacon, A Wal-Mart Fairy Tale”
In 1992, Jonathan Fleck and his daughter Abbey developed Makin Bacon, a dish used to hang and cook bacon in the microwave. By 1994, Fleck was still having trouble selling the dish to retailers. Eventually, he struck a deal with Armour, who agreed to offer a Makin Bacon coupon on their bacon packaging. Later that year, Good Housekeeping ran a feature on Makin Bacon, inspiring consumer interest. Shortly thereafter, Wal-Mart expressed interest in stocking the dish. Fleck traveled to Bentonville to meet with Cheryl Knight, a Wal-Mart purchasing representative. However, considering the Armour coupon, Wal-Mart’s offer didn’t make sense for Fleck. He knew he wouldn’t be able to fulfill orders for the dish and told Knight he’d be back after the Armour agreement ended. Six months later, Fleck and Wal-Mart went into business together and Wal-Mart has been stocking the dish ever since.
Fishman cites Makin Bacon as a positive example of the Wal-Mart effect. Fleck has had a good relationship with the company, and the arrangement has been positive for vendors, factory workers, customers, and even Wal-Mart’s competitors (56). Wal-Mart has sold Makin Bacon for $6.97 for years and has never asked Fleck to lower the price.
Fishman notes, however, that Ragu’s director of marketing, Walton Clark, had a different experience selling his product with Wal-Mart. Wal-Mart had become his primary account during his 17 years with Ragu. Wal-Mart was insistent that they lower their costs. When the same thing happened with Bertolli Olive Oil in 2003, Wal-Mart took Bertolli off their shelves when olive oil costs went up due to a bad crop year (62). They eventually restocked Bertolli when they realized they couldn’t maintain their lower, original pricing.
Fishman also talked to Gary Ramey, a former member of Sara Lee’s Wal-Mart team. Ramey explained the history of Sara Lee’s relationship with Wal-Mart. Sales went up after Wal-Mart developed new stocking methods. They placed Sara Lee undergarments in the middle of store aisles, still on their pallets. This eventually grew into what is known as Action Alley, the wide pathway through Wal-Mart stores lined with pallets of low-priced items. This is one example of Wal-Mart’s work to remove barriers between suppliers and customers (68).
Fishman then returns to his discussion of Fleck and Makin Bacon. Fleck has several patents on his product and still uses the same manufacturer in the States. The only time Fleck’s sales have gone down at Wal-Mart was when Wal-Mart redesigned its microwave aisle, where Makin Bacon is stocked. Retail Link, the system used by Wal-Mart to track and monitor sales, attributed the sales downturn to the product placement. Wal-Mart later moved the product back to its original shelf and sales rose again. While Fleck still sells to Wal-Mart, he told Fishman he doesn’t entirely understand why Wal-Mart has maintained the price of his product.
Chapters 2-3 Analysis
Chapters 2 and 3 examine the positive and negative effects of Wal-Mart’s relationships with their suppliers, competitors, and employees. These examinations illustrate Fishman’s claims about how Wal-Mart’s corporate policies might help and harm the people working for and with them. In Chapter 2, Fishman details a series of interviews he gave with long-time Wal-Mart employees. His conversations with Larry English, Lowell Kinder, and Clarence Archer provide insight into Wal-Mart’s historical operations, policies, and philosophies.
Throughout the chapter, Fishman uses these interviews as throughlines for understanding the company’s evolution both before and after Sam Walton’s death in 1992. In Chapter 3, Fishman focuses on Jonathan Fleck’s, Walton Clark’s, and Gary Ramey’s experiences working with Wal-Mart. As in Chapter 2, Fishman’s interviews with these suppliers offer an organic entrance into his questions about Wal-Mart’s relationships, practices, and business models. Fishman therefore humanizes his arguments by focusing on specific individuals and their distinct experiences working at, with, or for the company.
Chapter 2 interrogates Wal-Mart’s historical precedence of hard work, diligence, and devotion. Walton “and his early lieutenants” promoted “all-American values” from the company’s inception, including “hard work, frugality, discipline, loyalty, [and] a restless effort at constant self-improvement” (27). Fishman’s conversations with English, Kinder, and Archer reveal that Walton upheld these same principles in his personal life and vocational undertakings. Fishman argues that in one sense, these founding values “inspired a set of pioneering storekeepers” to revolutionize “retailing in the United States” (28). At the same time, Fishman’s interviews with English, Kinder, and Archer offer an opposing side to this argument. These three long-time employees describe the sacrifices they felt compelled to make in order to maintain their positions and reputations at the company throughout their tenure there. English’s daughter was injured when he was forced to take her to work while caring for her. Kinder was forced to sacrifice family time in order to prove his loyalty to the company when developing new retail sectors and sales techniques. Archer suffered ridicule and skepticism when he failed to earn the company a profit while implementing his allegedly valued pharmaceutical expertise.
By presenting his subjects’ trying experiences alongside their positive notes about working with Wal-Mart, Fishman crafts a well-rounded argument about the company’s culture. Fishman embraces the idea of negative capability throughout the chapter by simultaneously acknowledging the positive and negative aspects of the Wal-Mart philosophy. He also peppers his discussion with questions, revealing his desire to continue probing Wal-Mart’s culture and history in order to understand the root of the criticism targeted at them in recent years. Altogether, these elements impart the sense that Fishman is giving a thorough, well-grounded, and fair representation of the book’s subject matter, giving credibility to his specific claims.
Chapter 3 examines Wal-Mart’s relationships with its suppliers in order to further Fishman’s interrogations of Wal-Mart’s founding philosophies and to elucidate the Impact of Corporate Policy on Suppliers and Competition. Since its inception, Wal-Mart has promoted notions of partnership, equanimity, and transparency. However, Wal-Mart simultaneously does everything in its power to maintain its core mission of keeping prices low. In some cases, the latter principle precludes the former, and in other cases, the former challenges the latter principle, suggesting that there are Trade-Offs of Low-Cost Consumer Goods. Fishman cites three examples of supplier relationships in order to examine how Wal-Mart’s corporate policies impact its suppliers in different ways. While Jonathan Fleck and Makin Bacon’s relationship with Wal-Mart is “an example of how, when things go well with Wal-Mart, it’s good for everyone” (56). However, Fishman’s Ragu and Sara Lee examples offer alternate sides to this story. In these latter cases, Wal-Mart valued its low prices over its supplier relationships, ideals, and product. Via these examples, Fishman therefore suggests that there is at times a trade-off for offering consumers low prices. While Fishman is therefore offering an account that is critical of Wal-Mart, he does so in a specific way that diverges significantly from the standard critiques demonizing Wal-Mart and its representatives (such as the critiques of Wal-Mart and Scott that Fishman outlines in the Introduction). In contrast to these critiques, Fishman’s is based on an account of the specific mechanisms of Wal-Mart’s corporate strategy that bring about these negative effects. This lends credence to his evaluations about Wal-Mart, since he presents with these evaluations a clear account of why and how these negative effects have come to be.
While Makin Bacon is an exception to Fishman’s claim, Fishman suggests that it is anomalous in Wal-Mart history. To underscore Makin Bacon’s exceptionality, Fishman closes the chapter with Fleck admitting his own surprise and confusion over his relationship with Wal-Mart. In these ways, Fishman is using specific examples from the company’s history in order to understand Wal-Mart’s complex innerworkings. Furthermore, by presenting case studies, such as Fleck’s positive experience working with Wal-Mart, Fishman imparts the sense that he is not merely presenting information that is convenient for the narrative he is telling about Walmart. Instead, Fishman presents testimony that both supports and diverges from his account, a rhetorical technique that ultimately bolsters the strength of his arguments by fostering a sense that Fishman is a reliable and impartial observer.
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