The document discusses the short term vs long term effects of Walmart and the "Walmart Effect" on consumers and employees. It argues that both consumers and employees primarily consider only the short term benefits and discounts rather than long term consequences. Consumers are attracted to low prices without considering quality or impact on other businesses. Employees accept broken promises to prioritize short term wages over long term job stability. This shift toward short term thinking has allowed capitalism to take over the economy for the benefit of large corporations like Walmart at the expense of smaller businesses and workers.

1. THE WALMART EFFECT
Short Term Effect vs. Long Term Effect
Ramandeep Kaur

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If one were to go to the ice cream store every day, he or she would get ice cream
to fulfill his or her pleasure. However, he or she would not be concerned of the fact that
having ice cream every day is unhealthy and can cause chronic problems, such as
diabetes. Today’s society focuses usually on the short term effect rather than the long
term effect. Society looks at short term effect to satiate their immediate desire. By not
looking at the long term effect, the society risks having an unseen disaster. Pfeffer’s
“Human Resources from an Organizational Behavior perspective: Some Paradoxes
Explained” and Fishman’s “The Wal-mart Effect: How the World’s Most Powerful
Company Really Works—and How It’s Transforming the American Economy” showed
how people are valuing the short term effect and are adding drops of acid to the
corrosion of the very system we value. These people include the consumers and
employees. By the existence of Walmart management and the Walmart Effect, the
society is encouraging the practice of capitalism by allowing reciprocity to control the
lives of consumers and the employees.
Consumers follow the Walmart Effect by focusing on the short term effect and
encouraging the idea of reciprocity negatively. When most consumers walk into the
store, their first instinct is to look at the low prices and better deals. However, are low
prices necessarily a good sign? A person might suggest that the low prices are good for
people in lower class or middle class because they can afford the place and “save
money.” For example, a person might suggest that he or she would rather purchase a
hoodie from Walmart rather than Express because it is cheaper and it serves the same
purpose of keeping him or her warm. Unfortunately, people forget that the norm of
reciprocity involves the idea that people get as much as they give in return. This norm is

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used negatively by the consumers in Walmart because the low priced items have low
quality. The consumers of Walmart become accustomed to the low quality items
because they are so allured by the low prices that they forget to consider all the other
factors when buying an item. Due to this Walmart Effect, the consumers have a new
expectations of how the prices of the items should be. For instance, “After seeing an
$89 guitar in Walmart, if they [consumer] walks into [another] store and see a guitar for
$500, their immediate reaction is, ‘This guy’s ripping me off’” (Fishman 10-11). The
consumers do not look at factors, such as how the guitar was packaged or how the
strings of the guitar were made. The reasoning is that the consumers look for
immediate pleasure. They want what will be useful to them on the spot. In this scenario,
the guitar might be played perfectly fine right now but can Walmart 100% guarantee that
the guitar can be played perfectly in 5 years without the guitar strings breaking? The
consumers do not ask these kind of questions that may be beneficial to them in the long
term, resulting in norms of negative reciprocity. The consumers are causing a shift in
the economy by following the idea of reciprocity and reassuring the Walmart Effect.
In addition, the employees of Walmart or any other company also encourage the
Walmart Effect by following the idea of reciprocity. Just like consumers, the employees
of Walmart and other companies also give more importance to the short term effect
rather than the long term effect. Most employees are more concerned with receiving
their pay check rather than their basic job rights. The management of Walmart takes
advantage of this fact by making “broken implicit or explicit promises to their employees”
(Pfeffer 117). Broken promises include vacation time, paid leave of absence, health
insurance, or even job security. “In the absence of companies making long term

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commitments to their work force, that work force is not likely to take a long term view of
attachment to their firms…” (Pfeffer 122). The employees’ main incentive for working is
their pay check; it is satiating the employees in the short term because the employees
are more concerned about paying their bills rather than anything else. This causes most
of the employees to care less about the other promises made to them by the
management. A person may act as devil’s advocate and argue that American people’s
motto is freedom of speech so workers do speak up for their job rights. In today’s
society, that is not necessarily true. Workers do not speak up because the workers do
not have an established loyalty with their job management that this job will be their only
job with the profit that the employees bring to the job. Hence, the employees follow the
idea of reciprocity by encouraging idea of distrust—the employers give broken promises
for job rights and employees have this fear that they may be fired if they speak against
the management for their job rights. Therefore, the employers follow the laws of
reciprocity and encourage the idea of short term effect rather than long term effect,
causing a shift in the economy.
Collectively, when consumers and employees follow reciprocity, the economy is
being shifted towards capitalism completely. Consumers go to Walmart to shop for their
basic necessities. However, they do not realize what affect that has on other companies
and the employees in the other companies. By shopping at Walmart, they do not
realize that they are encouraging the idea “of downsizings and restructurings [which]
have made employees at almost all levels feel less secure (Pfeffer 117). By shopping at
Walmart, the society is not shopping at other companies. In other words, when the profit
of Walmart is increasing, the profit of other companies are decreasing. This causes

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other companies to lay off employees in order to compensate for the loss that they went
through. For example, “Winn- Dixie was a grocery chain that was forced into bankruptcy
because of its inability to compete with Wal- Mart causing them to lay off twenty- two
thousand employees” (Fishman 12). In addition, the employees that are laid off do not
speak up for injustice so they are indirectly encouraging the idea of Walmart Effect. This
cause and effect relationship is the long term idea that people normally do not think of.
In turn, this is all caused by one person named Sam Watson. This circle of cause and
effect is causing profit to come to Walmart only and that is what the Walmart Effect is.
This is an economical concern because the ideas of one person caused a complete
shift in the society. The ideas of one person allowed the society to indirectly follow the
ideas of capitalism.
The norms of reciprocity governs the consumers and the employees, causing
capitalism to take over the lives of the society. The ideas of one person named Sam
Watson made the economy shift and that is what capitalism is about. One person
makes the rules and everyone, unknowingly, follows the rules without hesitation.
Everyone follows the rules because they want the short term, immediate effect rather
than the long term effect. They do not realize that their actions can cause serious
damage to themselves and their surroundings. What can one assume will happen if the
society starts focusing on long term effect? Will capitalism still exist? Will the idea of
Walmart Effect still be functioning the society? This is something to think about.

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Works Cited
Fishman, Charles. The Wal-mart Effect: How the World’s Most Powerful Company
Really Works—and How It’s Transforming the American Economy. New York:
The Penguin Press, 2006. Print.
Pfeffer, Jeffrey. Human Resources from an Organizational Behavior Perspective: Some
Paradoxes Explained. Journal of Economic Perspectives, Fall 2007. Print.