Yet our era has also seen the rise of Wal-Mart, which is not getting smaller but larger thanks to information technology. Not only is Wal-Mart now the world’s largest firm in terms of sales, but it is still growing rapidly by every other meaningful measure, including profit, productivity, geographical scope and number of people employed.

Wal-Mart is rapidly approaching 1.5 million “associates” just within the United States. Within a few years Wal-Mart will employ two million Americans. Seven cents out of every dollar spent in a store in America last year were spent in a Wal-Mart. And it is successfully penetrating the Asian, European and Latin American markets while growing ever more dominant in the US.

Despite its size, Wal-Mart is clearly good for our democratic society in some respects. Although Wal-Mart’s low wages are a national problem and its discrimination against women employees is a disgrace, the retailer’s human-relations policy is in at least one respect a model of democratic values. An unusually high percentage of Wal-Mart managers started in low-paying jobs and lack a college or university degree. For males at least, breaking into management at Wal-Mart is more a matter of ability and performance than of educational credentials, which are increasingly an instrument of privilege in America.

Recruiting managers without college degrees may have been a matter of necessity when Wal-Mart was starting out in the Ozarks. But the company has turned this skill into a competitive advantage. Many new managers at Wal-Mart are unencumbered with business school theories that might interrupt the company’s steady focus on the bottom line. Perhaps just as important, many Wal-Mart managers do not understand the importance of perfect haircuts, expensive clothes, luxury cars and Montblanc pens. Such rough-cut managers are likely to have a tough time jumping to more conventional competitors who place a premium on polish. Wal-Mart can therefore pay its managers less.

Wal-Mart also serves the democratic interest of America by lowering prices and raising the standard of living of the working-class and middle-class customers who are its main clientele. A 2002 study by McKinsey showed that 25 per cent of the gains in productivity in the US economy from 1995 to 1999 were due to Wal-Mart.

Wal-Mart is a living, breathing behemoth of a top-down corporation, despite the assertion that such companies are dead dinosaurs. Information technology has made Wal-Mart superbly efficient, not in spite of but because of its gargantuan size and highly centralised organisation. Fleeter of foot than the smaller firms with flattened hierarchies Wal-Mart shows that high technology is fostering its own form of the huge, highly centralised corporation run with ruthless, hierarchical efficiency.

()Wal-Mart’s communications system lowers costs by facilitating efficient scheduling of the flow of goods within the supply chain. Skilful use of information technology enables Wal-Mart to co-ordinate deliveries to its distribution centres so well that many goods are “cross-docked”. That is, the goods never enter a Wal-Mart warehouse but only arrive there, cross the loading dock to a waiting truck, and are sent on their way to a store. After the truck makes its store delivery, Wal-Mart’s information system may route it to a nearby supplier so as to “backhaul” goods to the distribution centre rather than run empty.

The retailer’s internal operations are no less dependent on technological co-ordination and no less efficient than its supply-chain management. Managers mine computerised data on sales for exploitable patterns of customer behaviour. A famous example was the company’s discovery that sales of beer and paper diapers rose in tandem on Fridays. By stocking the two items near each other, Wal-Mart made it easier for a parent picking up diapers on the way home from work to celebrate the weekend with a six-pack.

Wal-Mart’s position at the downstream end of the supply chain also gives it an informational advantage on demand levels vis-à-vis suppliers. So it makes sense for Procter and Gamble and 3M to delegate authority over some of their processes to Wal-Mart. This requires new levels of trust among firms, and indeed, suppliers report that Wal-Mart is an honest customer and keeps its word. Delegation of internal management decisions to outside firms is scarcely new. But the information revolution has at least partly reversed the direction of delegation.

Wal-Mart is undeniably good for its suppliers in some respects, including dissemination among them of improved management techniques and cost discipline. In data processing alone, Wal-Mart has used its power to enforce standards among suppliers that ultimately lower not only Wal-Mart’s costs but those of the corporate economy in general.

In the business press, Wal-Mart perennially shows up at or near the top of lists of the world’s most admired companies. But the mass media run stories suggesting that Wal-Mart sweats its efficiency out of oppressed workers via contracts with suppliers employing illegal aliens, by forcing “off-the-clock” overtime on defenceless workers, and by massive amounts of sex discrimination.

The giant retailer also stands accused of ravaging the landscape of rural and small-town America. Wal-Mart, it is alleged, ruthlessly destroys the achievements of mom-and-pop entrepreneurs, leaves Main Street a desolate row of empty storefronts, and creates unsightly sprawl on the edge of town.

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