Is Wal-Mart Good in America?

Introduction

These numbers portray a wildly successful company that has grown from humble roots as a single store in Bentonville, Ark., to become the most powerful retailer in the global economy.

The articles selected

1. Walton, Sam; Huey, John. Sam Walton: Made in America: My Story. New York: Bantam, 1993. ISBN 0-553-56283-5, Pp 12-56

2. Frank, T.A. "A Brief History of Wal-Mart." The Washington Monthly. April 1, 2006. Retrieved on July 24, 2006, Pp 11-25

3. Ranade, Sudhanshu. "Satellite Adds Speed to Wal-Mart." The Hindu Business Line. July 17, 2005. Retrieved on July 24, 2006], Pp 32-96

Is Wal-Mart Good in America?

In fact, as Nelson Lichtenstein from the University of California Santa Barbara argues in a recent episode of the PBS series "Frontline," Wal-Mart has set a standard for business in the twenty-first century, in much the same way that U.S. Steel and General Motors epitomized the twentieth-century corporation. The Frontline episode examines the origins of Wal-Mart and its worldwide influence while investigating its title question: “Is Wal-Mart Good for America?”

According to traditional retail distribution models, manufacturers set the terms of sale for their products — prices, schedules, quantities, and displays — while retailers accepted these dictates and managed their inventories as best as possible. Wal-Mart alone changed this dynamic away from the old “push” system and toward a “pull” system in which the retailer tells the manufacturer what to produce and how much.

The “pull” has even lured major multinational manufacturers, such as Hoover, Kodak, Timex and Kraft, to set up offices in Bentonville, near the international headquarters of Wal-Mart. As portrayed on Frontline, Wal-Mart buyers, armed with an overwhelming array of inventory histories and sales tracking data, tell the representatives of these and other corporations how many watches or boxes of macaroni they will buy. The ambassadors from “Vendorville,” as the rows of corporate offices next to Wal-Mart headquarters have come to be known, have little room to negotiate. Because of its inventory system's unmatched efficiency and accuracy, Wal-Mart knows exactly what to buy and exactly how much to pay for it.

Wal-Mart's vice president for government relations, Bob McAdam, deems this way of doing business his company's “motivation” and its “challenge” to maintain costs “as low as possible, so that we can provide the customer a value and still make a reasonable profit for our company.” Shoppers interviewed during the Frontline special agree with McAdam's assessment, offering such praise as “I know I don't have to look and see where I can save the most money,” and “Good prices, good quality of stuff.”

Others are quick to disagree. Alan Tonelson from the U.S. Business & Industry Council argues, “The lowest prices have to lead to the lowest wages and to job loss and to lower living standards.” The residents of tiny Wooster, Ohio, also felt negative, if indirect, effects of Wal-Mart's global reach. Wooster was for decades the home of Rubbermaid, a household name in storage and trash containers. In the early 1990s, Rubbermaid changed its business strategy to reflect the shifting nature ...