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

Integrations continued

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)

Laissez-Faire

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