CHAPTER 6 CONCEPT REVIEW

MRS. CAVELL

US HISTORY

BUSINESS STRATEGIES THAT ALLOWED FOR MONOPOLIES

• 1. VERTICAL INTEGRATION: BUYING OUT SUPPLIERS (CARNEGIE STEEL: COAL AND IRON MINES AND RAILROAD COMPANIES) THIS ALLOWED HIM TO CONTROL EVERY ASPECT OF MAKING AND TRANSPORTING HIS PRODUCT.

• 2. HORIZONTAL INTEGRATION: BUYING OUT COMPETITORS (THIS COULD BE FRIENDLY OR HOSTILE BY REDUCING PRICES SO MUCH THAT THE COMPANY WAS FORCED TO CLOSE OR SELL OUT)

• 3. LAISSEZ FAIRE: GOVERNMENT STAYED OUT OF BUSINESS AFFAIRS. THEY DID NOT IMPOSE REGULATIONS OR RESTRICTIONS.

PULLMAN TOWN AND STRIKE

• GEORGE PULLMAN OWNED AND OPERATED A FACTORY THAT PRODUCED VARIOUS TRAIN CARS (SLEEPER). IF YOU WERE A PULLMAN EMPLOYEE YOU MUST LIVE IN THE PULLMAN TOWN. THE TOWN HAD MANY RESTRICTIONS INCLUDING NO ALCOHOL.

• IN 1893, AN ECONOMIC DOWNTURN CAUSED PULLMAN TO CUT HIS STAFF DRASTICALLY AND REDUCE THE REMAINING EMPLOYEES WAGES BUT NOT THEIR RENT COSTS

• WHEN THE ECONOMY RETURNED TO NORMAL PULLMAN REFUSED TO REHIRE WORKERS OR INCREASE WAGES.

• WITH THE HELP OF THE NATIONAL RAILWAY UNION (EUGENE DEBS) THE PULLMAN FACTORY WORKERS WENT ON STRIKE. THE STRIKE CAUSED MASSIVE CHAOS IN RAILROAD TRANSPORTATION AS RAILWAY WORKERS FROM ALL OVER THE COUNTRY REFUSED TO PULL TRAINS WITH PULLMAN CARS ATTACHED. EVENTUALLY, PULLMAN HIRED SCABS AND THE STRIKE TURNED VIOLENT. THE END RESULT: FEDERAL TROOPS END THE STRIKE, STRIKERS ARE FIRED AND BLACKLISTED AND DEBS SPENDS TIME IN JAIL.

WORKING CONDITIONS

• 1. UNSAFE

• 2. UNSANITARY

• 3. LONG HOURS AND LOW PAY

• 4. NO COMPENSATION (NO VACATION, HEALTH INSURANCE, OR WORKERS COMPENSATION)

• 5. NO VOICE TO CHANGE IT

• WHY? BUSINESS OWNERS WANTED TO MAXIMIZE THEIR PROFITS AND ANY COST!

UNION FORMATION AND THEIR GOALS

• UNIONS FORMED AS A RESULT OF THE TERRIBLE WORKING CONDITIONS IN THE EARLY 20TH CENTURY

• THE MAIN GOALS FOR ALL UNIONS: BETTER PAY, LESS HOURS AND SAFER CONDITIONS

• IWW: INTERNATIONAL WORKERS OF THE WORLD: ATTRACTED ALL TYPES OF WORKERS (ALL GENDERS/RACES/ETHNIC BACKGROUNDS/SKILLED OR UNSKILLED) SOCIALISTS: GOVERNMENT OWNS PRIVATE PROPERTY.

• THE ONE BIG UNION! THIS WOULD ALLOW FOR MANY PEOPLE TO COME TOGETHER TO TAKE ON THE MAJOR INDUSTRIES OF THE TIME.

PHILANTHROPY

• GOSPEL OF WEALTH: (ANDREW CARNEGIE) PEOPLE SHOULD BE ALLOWED TO MAKE AS MUCH MONEY AS POSSIBLE BUT SHOULD ALSO GIVE MONEY AWAY TO HELP COMMUNITIES.

• CARNEGIE BUILT HOSPITALS, UNIVERSITIES, LIBRARIES, AND ALSO DONATED HEAVILY TO ARTS PROGRAMS (MUSIC, DRAWING, ETC)

• NO DIRECT CHARITY

PEOPLE YOU SHOULD KNOW

• CARNEGIE: STEEL MONOPOLY

• ROCKEFELLER: OIL MONOPOLY

• BESSEMER: TURNED IRON INTO STEEL

• DEBS: RAILWAY UNION LEADER WHO ORGANIZED PULLMAN STRIKE

• EDISON: LIGHTBULB AND ELECTRIC CHAIR

• PULLMAN: OWNED A FACTORY PRODUCING SLEEPER CARS BUT ALSO FORCED EMPLOYEES TO LIVE IN HIS TOWN UNDER HIS RULES

TEST TIPS!!

• READ EVERYTHING CAREFULLY AND ANSWER ALL PARTS CAREFULLY

• MAKE SURE YOU ARE WRITING FROM THE PERSPECTIVE OF THE BUSINESS OWNER WHEN DESIGNING YOUR BUSINESS PLAN.

• ASK QUESTIONS IF YOU HAVE ANY!!!

• GOOD LUCK AND YOU WILL DO GREAT!!