The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned...
-
Upload
bridget-potter -
Category
Documents
-
view
215 -
download
1
Transcript of The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned...
![Page 1: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/1.jpg)
The Rise of The Rise of
BIGBIG BUSINESS
![Page 2: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/2.jpg)
11stst Industrial Revolution Industrial Revolution (Pre-Civil War)(Pre-Civil War)
• Most business were family-owned• Produced goods for local or
regional markets.
![Page 3: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/3.jpg)
A textile A textile factory factory
producing producing children’s children’s clothing in clothing in Baltimore, Baltimore,
MDMD
![Page 4: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/4.jpg)
Transcontinental RailroadTranscontinental Railroad
![Page 5: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/5.jpg)
Effects of Effects of TranscontinentTranscontinental R.R. Systemal R.R. System
• Created a nationwide market for goods.– What effect would this have on businesses?
• Allowed business to locate farther west.– How did this result in the economic growth of
the United States?
• Americans begin settling the West• West & East become interdependent
![Page 6: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/6.jpg)
Rapid Economic Growth Rapid Economic Growth After the Civil WarAfter the Civil War
• Output of goods rises 7% per year after the Civil War.
• 1865: U.S. produces $2 Billion in goods
• 1900: U.S. produces $13 Billion in goods– U.S. most productive nation in world
by 1900!
![Page 7: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/7.jpg)
American economy American economy depended on depended on
ENTREPRENEURSENTREPRENEURSPeople who take risks to create new
businesses using their’s (and others) money and talents
![Page 8: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/8.jpg)
America’s Economic America’s Economic System Encouraged System Encouraged
Entrepreneurial Spirit and Entrepreneurial Spirit and Led to GrowthLed to Growth
What system of economics do we have in the U.S.?
CAPITALISM
![Page 9: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/9.jpg)
What is Capitalism?What is Capitalism?• Most industries are run by private
businesses. – Government does not control
production/sale of goods.
• Businesses run by private individuals– Government does not control businesses
• Prices of goods determined by competition– Government does not regulate prices
![Page 10: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/10.jpg)
How Competition How Competition Determines PricesDetermines Prices
The Jones Hat Co. produces & sells derby hats for $50 per hat
The Connolly Hat Co. starts up and produces hats cheaper & sells derby hats for $39.99 per hat.
WHAT EFFECT WILL THIS HAVE ON THE JONES HAT COMPANY?
![Page 11: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/11.jpg)
Competition Regulates Competition Regulates PricesPrices
•To stay competitive, Jones Hat Company must lower prices.
![Page 12: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/12.jpg)
REMEMBERREMEMBER
COMPETITION COMPETITION REGULATES REGULATES
PRICES!PRICES!Modern day example: Cell Phone Companies
![Page 13: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/13.jpg)
Costs of Basic Cell Phone Costs of Basic Cell Phone PlansPlans
(Competition Regulates (Competition Regulates Prices!)Prices!)
![Page 14: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/14.jpg)
THINK!THINK!Why are food prices high at the
Student Union?
![Page 15: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/15.jpg)
Laissez-Fair?Laissez-Fair?HANDS OFF!
Government does not interfere in businesses
Allows competition to regulate prices
Think: Why should government take a “laissez-fair” approach
to business?
![Page 16: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/16.jpg)
Business Structures Business Structures The way businesses were owned The way businesses were owned
& organized& organized
1.Proprietorship & Partnerships
Business completely run by one person or two people.
• Typically smaller businesses• One/Two people completely
responsible for businesses
![Page 17: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/17.jpg)
Business Business StructuresStructures
2. Corporation Company that is owned by stockholders
(people who buy a share (%) of a business).– Stockholders elect a Board who makes
major business decisions– Board hires officers to run day-to-day
operations.– Show on Board
![Page 18: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/18.jpg)
Why Businesses Why Businesses IncorporateIncorporate
• Allows the business to raise more money to expand (stocks)
• Owners not responsible for debt or failure of business
• Stockholders only liable for their share• Business not dependent on one
person & can continue after the founder is gone
![Page 19: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/19.jpg)
3. Trusts & Monopolies
Trust – Merging of competing companies to create larger & more productive company.
Monopoly – When a trust gained complete control over an industry.
Business Business StructuresStructures
![Page 20: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/20.jpg)
TrustTrust
![Page 21: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/21.jpg)
Bought smaller oil Bought smaller oil companiescompanies
Controlled Controlled 90% 90% of all U.S. of all U.S. oil by 1879oil by 1879
![Page 22: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/22.jpg)
2 Ways Businesses Got 2 Ways Businesses Got
BIGBIG1.Vertical Integration
2.Horizontal Integration
![Page 23: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/23.jpg)
VERTICAL
INTEGRATION
![Page 24: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/24.jpg)
HORIZONTAHORIZONTALL
INTEGRATIOINTEGRATIONN
![Page 25: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/25.jpg)
The Industrial The Industrial TycoonsTycoons
(The Robber Baron’s, Captains of (The Robber Baron’s, Captains of Industry)Industry)Entrepreneurs who grew industrial
empires & accumulated tremendous wealth (often using questionable practices)
![Page 26: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/26.jpg)
Andrew CarnegieAndrew Carnegie• Immigrated to U.S.
from Scotland at 12• Worked as a
“telegraph boy” for a Pittsburgh railroad
• Began investing in his 20’s/30’s and gained wealth
• 1870’s: Invested in steel
![Page 27: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/27.jpg)
Carnegie Steel Carnegie Steel CompanyCompany
• Adopted & improved the Bessemer process
• Carnegie’s philosophy:– 1. Constant innovation (new technology to
reduce operating costs)– 2. Always sell product cheaper than
competitors– 3. Retain profits to take advantage of
opportunities (buying competitors).
![Page 28: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/28.jpg)
Dominated throughDominated through
VERTICAL VERTICAL INTEGRATIONINTEGRATION
Carnegie integrated every phase of steel production
Owned iron ore mines in Minnesota
Ships to transport iron ore
Railroads transported raw materials in and finished steel out
Carnegie’s Vertical Integration:1.Improved efficiency2.Controlled the quality of his product at every stage of production3.Lowered costs by reducing “middle-man” fees and supply costs
![Page 29: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/29.jpg)
Steel: Stronger & More Steel: Stronger & More ShapeableShapeable
![Page 30: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/30.jpg)
Carnegie’s WealthCarnegie’s Wealth
• 1900: Carnegie Steel produced ¼ of all steel produced in the United States.
• 1900: Carnegie Steel Co. made a profit of nearly $42 Million
• Carnegie sold his share of Carnegie Steel Co. to J.P. Morgan for
$400 Million
![Page 31: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/31.jpg)
Carnegie the Carnegie the Philanthropist Philanthropist
• After 1900, Carnegie spent the rest of his life giving his money away to worthy causes.
• Gave away $350,695,653 to worthy causes before his death.
• Gave away his last $30 million after his death
![Page 32: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/32.jpg)
PhilanthropyPhilanthropy• Funded the construction of
3,000 libraries throughout the world
• Funded the construction of universities
• Funded the construction of Carnegie Hall in NYC
![Page 33: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/33.jpg)
Other TycoonsOther Tycoons
John D. RockefellerJohn D. Rockefeller• Founder of Standard Oil
Company• Grew by Vertical &
Horizontal Integration
• Bought competitors until he controlled 90% of U.S. oil
![Page 34: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/34.jpg)
Broken up under Sherman Anti-Trust Act in Broken up under Sherman Anti-Trust Act in 1911 in 34 companies1911 in 34 companies
![Page 35: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/35.jpg)
Other TycoonsOther Tycoons
Cornelius VanderbiltRailroad Tracks
George Pullman Designed RR Cars
(Sleeping Car)
J.P. MorganFinancier, Corporate
Consolidator
![Page 36: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/36.jpg)
Akron Akron ConnectionConnection
Akron becomes “Rubber Capital of the World” during 2nd Industrial Revolution
1900 1898
![Page 37: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/37.jpg)
![Page 38: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/38.jpg)
Firestone ParkFirestone Park
![Page 39: The Rise of BIG BUSINESS. 1 st Industrial Revolution (Pre-Civil War) Most business were family-owned Produced goods for local or regional markets.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc11a28abf838ca4417/html5/thumbnails/39.jpg)
Stan Hywet Stan Hywet Home of Frank SeiberlingHome of Frank Seiberling