Your Warm-up... Do you see an old woman or a young lady?

Your Warm-up . . .

Do you see an oldwoman or a young lady?

It depends on Your Perspective!

Young Old Lady Woman

What’s Your Perspective?

Man Playing Young Saxophone Woman

Andrew CarnegieSteel

John D. RockefellerOil

Cornelius VanderbiltRailroads

J.P. MorganBanking

Philip ArmourMeatpacking

It’s the Same With Business Leaders of the Day!

Different Leaders Organize in Different Ways!

Horizontal Integration/Consolidation

Or

Vertical Integration/Consolidation

They prosper due to lack of government involvement

John D. Rockefeller and the Standard Oil Company

Wealthy man who saw the oil industry as a way to get richer

Made illegal deals with railroads to transport oil cheaper – weakens refineries that he buys

Utilized horizontal integration or consolidation

Horizontal Integration/Consolidation

Think . . .

MONOPOLY

John D. Rockefeller and Standard Oil Company

Controlling the Market

Bob’s Pizza

Delaware

Pizza

Pizza PizzaHappy Time PizzaUsing Horizontal Integration, Bob could

control the Pizza market in town by buying the other Pizza shops!

Bob’s Pizza Bob’s Pizza Bob’s Pizza

Bob’s Pizza

Andrew CarnegieScottish Immigrant

Leader of steel production in Pittsburgh

Used Bessemer Process

Utilized vertical integration or consolidation

Vertical Integration/Consolidation

Think . . .

Owning all phases of production in a business

Andrew Carnegie and Carnegie Steel

Controlling the Market

Bob’s Pizza

Using Vertical Integration, Bob could control the Pizza market in

town by controlling many

of the costs associated with

making his pizza!Bob’s Farm

Bob’s Cheese Factory

Bob’s Trucking Company

Andrew CarnegieSteel

John D. RockefellerOil

Cornelius VanderbiltRailroads

J.P. MorganBanking

Philip ArmourMeatpacking

The Business Leaders of the Day Were Good and Bad!

Robber Barons

Business leaders who get rich off the public

Drained natural resources

Paid low wages, required long hours of workers

Persuaded public officials to interpret laws in their favor.

Drove their competitors to ruin.

“Robber Barons”

Captains of IndustryBusiness leaders who served their

nation in a positive way.

Increased the supply of goods, raised productivity and expanded markets.

Created jobs that allow many Americans to buy new goods and

raise their standard of living.

• Also created museums,

libraries, and universities,

many of which still serve the public today.

Carnegie Hall

Carnegie as a PhilanthropistA Philanthropist uses

wealth to improve societyCarnegie funded the

building of libraries, education facilities, and music/arts facilities

FROM HERE TO END – DID NOT USE FOR ALL CLASSES

Fall 2013

“Gospel of Wealth”Carnegie’s philosophy

- A person should be able to make as much money as they can, BUT they should also use their wealth to improve society.

Monopoly vs. CartelMonopoly – one company with complete control of a product or a service

Cartel – a loose association of businesses in a similar field or that make the same product and agree to limit supply to drive up prices (drugs or OPEC)

Concerns Led to the Sherman Antitrust Act

Enacted in 1890Congress wanted to end

trustsWas ineffective – not

enforcedMore about it in future

units

Business CycleThe growth and

contraction of a nation’s economy – New Problem in the

late 1800s

FROM HERE TO END – DID NOT USE AT ALL

Fall 2013

Industrial Revolution

Working Conditions

Growing Work Force

ImmigrantsFormer Farm FamiliesWomen and ChildrenDoes not include

African Americans

Survival Guide for Poor Families (aka, immigrants!)

Force children to leave school for work

Send children as young as age 6 to work

Ask for aid from a private charity (church, etc.) Government Welfare is non-existent at this time!

Workday Length

Typically 12 hours/day, 6 days/week

Division of Labor Changes Manufacturing

When someone completes one task as part of the job

Positive: MASS PRODUCTION – it increases business productivity Negative: workers no

longer take pride in work and removes creativity

Think About Making Shoes as an Example of This Concept!

He may never work on shoes!