Development of Business
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Transcript of Development of Business
Monopoly
• Has anyone ever played monopoly?
• What is the goal/objective of it?
• To own everything• Same as a
corporation
Business Integrations• Business mergers of the late 1800s followed 2
strategies: vertical or horizontal
– Vertical integration: joining all areas of one business (i.e. companies that supplied a business)
– Horizontal integration: joining competing businesses in one area (i.e. taking over competing companies)
• Trust: in an attempt to gain dominance, some competing companies merged to form a trust. When a trust gained complete control over an industry, it held a monopoly
Differences Between Integrations
• Vertical– Includes raw
materials, production & distribution
– Ex: Andrew Carnegie– To streamline his
business at steel plants, he bought iron deposits, coke fields, ships & RR
• Horizontal– Merger of competing
companies in one area of business
– Ex John D. Rockefeller– He bought up
refineries so by 1882, his Standard Oil Company owned most of the nation’s oil industry
Types of Companies
Proprietorship
Sole owner (1)Ex – Darlene’s Nails
Partnership Ownership w/ 1 other personEx – Myers & Brecker Law
Charter Group of people put $ in togetherEx – School
Corporation Many people buy stocksEx- Disney
Background of Industry
• Britain leads the Industrial Revolution
• Industrial Revolution: change of making goods by hand & in home > work of machines in factories
• Began in GB in 1700s because of political stability, factors of production, raw materials
• Spread to Europe & US (1800s)
Business Key Terms
• Entrepreneurs: risk takers who started new ventures within the economic system
• Capitalism: economic system called free enterprise, in which most businesses are privately owned
• Laissez-faire: French for “leave alone” companies operate without gov’t interference
• Social Darwinism: philosophy of survival of the fittest (applied to business)
Inventions
• New inventions make production faster, easier, cheaper
• Ex: Spinning jenny, flying shuttle, steam-powered machines
Industrial Tycoons
• John D. Rockefeller: Standard Oil Co.• Andrew Carnegie: Carnegie Steel Co.• Cornelius Vanderbilt: Invested in RR;
gave money to education• George Pullman: Designed sleeper
cars to make travel more comfortable
Beginnings of Unions
• Many workers were children (10-16 yrs working 12-16 hr days, 6 days/week) no paid vacation or sick leave > labor
• Organized workers who hoped to pressure employees to give better pay & safer workplaces
• First effective organization = Knights of Labor– Accepted unskilled
workers, women, African Americans
– Campaigned for 8-hr work day, end of child labor, equal pay for equal work
Strikes & Labor
• Strikes & riots were ways workers protested against cuts in wages
• Employers responded by forcing employees to sign documents saying they would not join unions
• 1st official organized union = AFL (1886) American Federation of Labor – organized by Samuel
Gompers– Won wage increases
& shorter work weeks
Causes & Effects of Industrialization
• At the bottom of your lecture, create a t-chart & put the following events/terms in a t-chart for cause/effects. Simply write the # under cause or effect
• 1. Widespread use of corp. business; 2. monopolies; 3. large scale cotton production in the S.; 4. unrestricted immigration; 5. growth of cities; 6. mass-production technology; 7. gov’t aid to R.R.; 8. higher standard of living; 9. need to protect rights of consumers/workers; 10. high tariffs; 11. large deposits of raw materials; 12. stable banking system; 13. new inventions; 14. foreign investment in Amer. factories; 15. development of new sources of power; 16. lengthened canals; 17. growing population