Does Profit (Should Profit) Trump Human Concern? – Social Justice Questions from The Wal-Mart Effect by Charles Fishman

I have just finished reading The Wal-Mart Effect:  How the World’s Most Powerful Company Really Works – and How It’s Transforming the American Economy by Charles Fishman.  (I wrote an earlier blog post here:  “Always _____________, Always” – A Business Focus/Buy-In Lesson from Wal-Mart (with insight from Charles Fishman, The Wal-Mart Effect).

I am presenting my synopsis of this book for today’s Urban Engagement Book Club (November 21, 2013).  For that event, we focus on books on social justice and poverty, and related issues.  So, yes, this book is definitely a “social justice” book.

But it is also a good business practices strategy book.  Who could argue against Wal-Mart’s success as a business?  Here’s one reason for the business thinker to read this book.  Read this book carefully, for its “history” and description of Wal-Mart’s own corporate habits, and ask – where am I spending money unwisely, unnecessarily – even wasting money?  Sam Walton, and the ongoing culture that flows from his legacy, is all about frugality.  One supplier for Wal-Mart described the time he sat on a box in the corporate offices.  They do not waste money on nice chairs – or too many chairs!  They don’t even pay for the phone calls to their suppliers!

To this day, Wal-Mart’s vendors are required either to provide a toll-free phone number for their company or accept collect calls from Wal-Mart buyers.

Back to their massive success:  To say that have cleared the table is to state the obvious.  Here are some comparison points, from the book:

Wal-Mart is as big as Home Depot, Kroger, Target, Costco, Sears, and Kmart combined. As recently as 1985, Wal-Mart was still a regional outfit, with $8.5 billion in sales and 882 stores. Kmart then had 2,180 stores—and $22.4 billion in sales. Sears had $36.4 billion in revenue.
A New York Times story in February 1986 was headlined KMART CLOSING THE SEARS GAP. By the end of 1990, Wal-Mart was bigger than Kmart. Two years later Wal-Mart passed Sears. By the end of 1994, Wal-Mart was bigger than Sears and Kmart combined.

In other words, how “big” is Wal-Mart?

Wal-Mart sells 21 percent of the toys bought in the United States, 23 percent of the health and beauty products, and 27 percent of the housewares. In Texas, Wal-Mart’s share of the grocery market is 14 percent in Austin, 25 percent in Dallas, and 30 percent in Fort Worth.
It’s not free-market capitalism—Wal-Mart is running the market. Choice is an illusion.

So, yes, Wal-Mart is the big dog at the bowl.  Everyone else just waits their turn.

But, the question that I am left pondering is a little haunting,  How does a company balance profit with the simple issue of treating people like human beings?

Do you remember the Kathie Lee Gifford story about the working conditions at factories making her clothing line?  Factories with horrible, inhumane working conditions.  She was astonished that anyone would associate her name with such poor treatment of people.  She denied that it was happening.  And, then, she discovered that the accusations were all true.  In tears, she apologized, and promised to get to work to make things much, much more humane.

I think she is a mirror for us all.  We buy our products, not quite wanting to even know about what our quest for the lowest prices is doing to the real people living with inhumane working conditions while they make our low-priced products.

Have we learned nothing?  Have we not learned from our history about working conditions that include exploitation, mistreatment, ecological damage?  Do we not remember our history about the Triangle Shirtwaist Factory Fire, or the recent factory fires in Bangladesh (read this on the 2012 Dhaka Fire.  Yes, Wal-Mart connected)?

If you were to read this book, you would see the ripple effects of mistreatment of people and the environment, throughout the Wal-Mart supply line.

But, do we blame Wal-Mart, our should we blame ourselves?  If we can buy Salmon Fillets for under $5.00 a pound, are we willing to even ask about the reality of the conditions of the people who bring us such unbelievably low prices?

Most of us are not willing to face this reality. We just walk into the stores, purchase our products, and ignore/tune out any such stories.  Until they become too big to ignore…

Why do companies wait until the story becomes so big, so widely known, that they can no longer ignore it before they act?  Why did Wal-Mart not set up genuine, truly accountable, monitoring of factory conditions from the very beginning?  Why do they have to be “forced” into seeking more humane treatment for the workers who make the products they sell?

And, yes, they are behind the curve on this.  From the book:

The entire global ethical-standards and factory-inspections team has less than half the staff of a single supercenter.  (just over 200). If Wal-Mart were staffed the same way as the Gap, it would have nine hundred inspectors, not two hundred.

I think I can tell you why they wait until they can no longer avoid the story .  They wait because it costs more to act.  And, thus, it might impact their “always low prices…always” to spend money on something that does not lead to even lower prices, much less might add to their prices.

So, my reading of this book has brought me back to the always-lingering question – should profits trump human concerns?

Here are my “social justice concerns” from the book.  This is a short list.  But, it is a place to start:

• Some of the social justice concerns…

#1 – the treatment of workers
#2 – the pay for workers
#3 – the “international concerns”
#4 – to put it simply, does profit trump human concern?

The Wal-Mart Effect is a good, disturbing book to read.  I think you should consider reading it.  And then, think about it…