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 ProprietorshipSole owner (1) Ex – Darlene’s Nails PartnershipOwnership w/ 1 other person Ex – Myers & Brecker Law CharterGroup of people put $ in together Ex – School CorporationMany people buy stocks Ex- 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 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 1 st 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