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‘The Wal-Mart Effect’ author addresses JCU students

November 19th, 2009

Charles Fishman was working at a relatively new business magazine, “Fast Company,” when an idea for a new story came up.

“We had never written about Walmart and at that point, it seemed to be a huge gap in our journalism,” he said. “We thought we shouldn’t consider ourselves a serious business magazine if we haven’t tried to tackle some aspect of Walmart.”

Fishman’s story about the power of Walmart over its suppliers was unique because it went behind-the-scenes of the tight-lipped company.

It ultimately led to an opportunity to write a book about the powerful retailer.

Fishman, the author of “The Wal-Mart Effect,” spoke on Nov. 16 in Dolan Science Center Auditorium as a part of the Boler School of Business’ series on corporate social responsibility.

“The Wal-Mart Effect” is a nationally-bestselling book that chronicles the history of Walmart, tells the stories of different suppliers, and features analysis into why Walmart is so successful.

Fishman gave two lectures as a part of the series. The first was directed toward first-year students taking the Social Justice and Corporations seminar. He enumerated  why Walmart should be socially responsible and addressed numerous topics related to the book, such as the treatment of employees and quality of products.

The full-time wages for an average Walmart employee amounts to roughly $23,380 per year, while Walmart makes $24,682 per minute in profit. The company also sells more cigarettes than any other company in the United States, but sells name-brand groceries for 15 percent less than the typical American grocery chain. Walmart has created 56,000 jobs in the last two years, more than the number of employees at Google and Amazon combined.

According to Fishman, in the first nine months of 2009, Walmart made $1.1 billion per day.

“They are still only taking 33 cents out of every ten dollar bill that you leave there,” Fishman said. “They have not taken one extra penny for themselves, despite accumulating all that power. That’s what Sam Walton and the people who run Walmart would say is the most important social justice implication.”

In the second lecture, held later the same day, Fishman addressed Walmart’s role as, possibly, the nation’s most important force in environmental change and sustainability.

“Walmart touches the life of every single American every day,” Fishman said at the beginning of the lecture. “You use products every day that you purchased somewhere, and even if you personally never shop at Walmart, it doesn’t matter where you shop. The products you buy and the prices you pay have, in a large measure, been determined in an ecosystem created by Walmart.”

According to Fishman, 62 percent of Americans live within five miles of a Walmart store. Walmart also sells more by Saint Patrick’s Day than Target sells in one year.

Because of Walmart’s power, Fishman believes the company will be an agent of change across the consumer world.

“Walmart has decided that in addition to price, it’s going to care about environmental impact and sustainability,” he said.

Among the examples of Walmart’s environmentally friendly practices, Fishman noted the company’s push for energy-efficient light bulbs, a demand for a reduction in packaging, a reduction in the energy used in its suppliers’ factories in China and the re-design of milk cartons to eliminate the unnecessary milk crates.

“I think they have changed,” Fishman said. “How long those changes will last, that’s a question that remains to be seen. The real changes have been in improving the health insurance that they offer employees and this dramatic sustainability effort that they talk a lot about.”

Walmart isn’t just committed to improving itself, but is also looking to persuade their suppliers to do the same. Fishman used the example of Walmart’s intentions to double the gas mileage of their trucks.

“Once Walmart takes the equivalent of half its trucks off the road, if you’re Target, you can’t afford to run inefficient trucks,” Fishman explained. “Walmart has said, ‘When we figure it out, we will share our technology with anybody who is interested. We are not going to use improved efficiency of trucks as competitive advantage.’”

Walmart has taken its competitors inside their headquarters and energy-efficient stores to show off how they are becoming more sustainable, in the hopes that other companies will follow suit.

“The environmental and sustainability stuff started out as a good show, and Walmart has discovered how powerful the tool is for saving money and for persuading people they are not an evil corporation,” Fishman said.