John D. Rockefeller, Sr. Corrupt Titan or Admirable Businessman? Becky Anderson
Dec 24, 2014
John D. Rockefeller, Sr.
Corrupt Titan or Admirable Businessman?
Becky Anderson
Photo Courtesy of University of Rochester
Corrupt Robber Baron?
• Standard Oil was broken up in 1911 by the Supreme Court
• Undercut competitors prices
• Sabotage
• Physical Threats
• Bribery
(Wooten 34)
But..
• Rockefeller is often misrepresented
• At the time, his actions were not illegal and were common practices in business. Standard was broken up for being trust-holding ex post facto
• Greatest philanthropist to ever live- donated $550 million
Why would people buy from Standard
if it was so bad?
• Better quality product
• Standard’s second-grade product was better than other companies’ first-grade
• Dramatic decrease in the price
• Greater output of oil and gas (30x more)
Admirable businessman?
• Reduced the costs of production
• Large Profits
• Horizontal Integration
• Vertical Integration
• Efficient
• Excellent administrator
Thesis
• Despite the fact that he remains one of the most hated businessmen of all time, John D. Rockefeller’s success came because his skills as a business administrator helped him eliminate inefficiencies within the industry.
Horizontal Integration
• Acquiring competition in the same industry
• Consolidated all of the oil companies in Ohio
• Bought out competitors at fair prices
• Began to consolidate the oil companies throughout America
Vertical Integration
• Merging companies against production
• Barrel making
• Pipeline systems
• Railroad rebates
Efficiency
• Acquiring other companies was a way of increasing efficiency
• Efficient machines• Monetary efficiency• Reduced the amount of
solder used to seal barrels from 40 drops per barrel to 39, saving hundreds of thousands of dollars
Administration
• Brought together some of the best businessmen in America to join his company
• Created a model for corporate business administration
• Subsidiary companies headed by former rivals– Jacob Jay Vandergrift in
charge of pipelines
Lasting Impacts on the oil industry
• Although Standard Oil was broken up, remnants of its company still remain in the industry today
• Exxon-Mobil, Texaco, Chevron, Conoco, and other companies still remain to this day
Bibliography
• University of Rochester. 14 June
2007. <history.rochester.edu>
• Varvra, Bob. “Rockefeller’s Power,
Wealth Changed American Business.”
National Petroleum News 92.13. (2000).
16-17. ProQuest. George Mason U Lib.,
Fairfax, VA. 2 June 2007
<http://www.proquest.com>.
• Wooten, Sara. People At the Center
of the Industrial Revolution. San Diego:
Blackbirch,2004.