Presentation on theme: "How did business change during the Industrial Revolution?"— Presentation transcript:
How did business change during the Industrial Revolution?
Business grew larger and many organized into corporations Corporations: large, organized companies owned by shareholders Carnegie, Rockefeller and other leaders were criticized for forming large companies Critics believed big business was too powerful They became monopolies Monopolies: large corporations that have little competition
Monopolies can charge higher prices for poorer quality products They can do so because they do not have competition from other companies selling the same product The buyers have no choice but to pay that price or do without the product
They are a safe form of business People invest money in a corporation They are protected if the corporation fails Investors have limited risk or liability for the debt People can buy stock in the company with capital (money), in which they earn money Major corporations made millions by selling stock
Leaders searched for new ways to organize companies Vertical combination: a business that controls each step in making something Carnegie bought mining and transportation to help his company produce steel Horizontal combination: buying ones competition Rockefeller bought out other oil refineries to control oil production
They took business away from the competition and became monopolies They were then called trust companies Trust Companies: A large, powerful company that often is called a monopoly Businesses were able to increase their wealth Could employ thousands of workers Became giant industries and very powerful