Just Business
Just Business

Just Business

Walmart must exist, because logic exists. But do we want to live where price is god, efficiency is the watchword, and grace is not only unnecessary but undesirable?

May 28 th 2010

Walmart, the gigantic American retailer that seems at times to have colonized communities too small to have their own McDonald's, has one thing going for it that is hard to argue with: economic logic.

In fact, one might argue that logic is Walmart's unique selling proposition (or USP, as business school types like to say). Their advertising reinforces the message of a relentless drive to lower prices to the consumer, but underlying that drive is not emotion, but pure economic logic.

It is not news to report that businesses have always favored their largest customers with their best pricing. Walmart's genius has been to follow that maxim to its logical conclusion: If we can become the world's largest customer, we can demand the world's lowest prices. They have, and they do.

More than bigness, Walmart is characterized by this one idea, which drives cost out of the system by virtue of massive size, enormous quantities (of everything), and relentless focus on eliminating waste in the system.

All of which sounds great until you see the end result which is, well, Walmart.

Photo: David Greusel

Walmart is an easy target for sophisticated urbanites to pick on because it is so suburban (or even rural) in its flavor, so taste-deprived and so unlike Trader Joe's in nearly every way. But for a study of economic logic at work, Walmart is not only the textbook case—it is the textbook.

Which raises a question: if it is my opinion (which indeed it is) that Walmart is not the model for how people ought to live in commercial community with one another, what's wrong with it? And what model is to be preferred? And how, in the end, is economic logic to be overcome?

A scene from "The Godfather" comes to mind. A mafioso is telling his unfortunate victim that what is about to happen is "nothing personal—it's just business." That, in a nutshell, is what's wrong with the Walmart model. Not that it's criminal—that it's not personal—it's "just business."

The case can and should be made (elsewhere) that Walmart procures most of its goods from China and other low-labor-cost nations where worker safety and health are afterthoughts if they are thought of at all. But if your business model is driven by cost, and only by cost, these countries are where you will end up sourcing your goods. Economic logic dictates that you must find the lowest cost provider, and inevitably, the lowest cost provider will be located in a country where human capital is cheap and expendable. It's not personal—it's just business.

And even the few items Walmart sells that are domestically produced are sourced, necessarily, from the biggest, most efficient providers, whether they are located in south Florida or north Washington. When economic logic is your master, location is irrelevant. The local food movement will not see much traction at your Walmart Neighborhood Market (an oxymoronic name if ever there was one), because local producers can't be held to the same standards of cost and uniformity as large national companies.

One could even make the argument that Walmart doesn't wish to know the persons involved in the manufacture of the goods it sells. Such knowledge would be inconvenient. It could result in certain persons or organizations being favored over companies that can do the same thing for less money, and could interrupt the logical flow of goods from the mine to the factory to the sales floor. Personal relationships—and the persons they involve—are an impediment to Walmart's business model.

And that is where I will locate my objection. A long time ago, my son was hospitalized with a broken leg that required traction. He was visited in his hospital room by, of all people, the barbers who cut his hair. They brought gifts—inexpensive toys appropriate for a seven-year-old boy. Nothing about this episode is logical.

And that is what makes it so remarkable, so gracious. Grace, as we know, is undeserved favor. And grace, as you might imagine, is what is entirely missing from Walmart's inexorable focus on delivering products to consumers at the lowest possible cost. Undeserved favor is a synonym for expense—unjustified expense at that—and unjustified expense has no place in a Walmart universe.

So which universe do I prefer to live in? The universe where price is god, efficiency is the watchword, and grace is not only unnecessary but undesirable? Or the world of a local barbershop whose owner and workers would visit a boy in the hospital for no business reason whatever?

Does the answer seem obvious? Yet to be honest, I live in both worlds. When I need a printer cable, I go to Walmart because I know they will have the cheapest printer cable in the world—literally. And sadly, even if I wanted a human relationship along with my printer cable, there are precious few computer stores around built on the hobby shop model—staffed with overqualified tech geeks who know more about printer cables than I'll ever need to.

But when I'm honest with myself, it's the hobby shop computer store that I long for, even more than the world's cheapest printer cable. Walmart must exist, because logic exists. And until we have taken logic's magical power to end all arguments away from it, we must have Walmart. But I long for communities of grace, where pimpled geeks sell advice along with computer cables, and where barbers visit kids in hospital for no reason other than that they know the kid, and where someone makes a Bizarro-world "Godfather" film where a debtor receives undeserved favor with the message, "It's not business—it's just personal."

Topics: Business Justice
David Greusel
David Greusel

David Greusel has worked as an architect for more than thirty years with several Midwestern firms of varying sizes. He is founding principal of Convergence Design, a Kansas City-based practice specializing in places where people gather. While with another firm, he was lead designer for two major league ballparks: Minute Maid Park, home of the Houston Astros, and PNC Park, home of the Pittsburgh Pirates. In 2009, David was named a Fellow in the American Institute of Architects.


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