Big Business Emerges

Types of Businesses What do you remember? What are the differences and characteristics of - Sole proprietorships Partnerships Corporations

What new ideas did Big Business incorporate? Carnegie’s Innovation Management Technique Better products and lower prices Encouraged competition to increase production & cut costs Hired only the best and vested them in the company’s performance

Mergers Business strategy *Vertical integration (merger) = control every single aspect of a company from the resource production through sales. Ex. Car manufacturer buys a tire company *Horizontal integration (merger) = buy all the competing companies in a single industry. Ex – Harris Teeter buys Foodlion. JD Rockefeller buying out competing oil refining companies – becoming a??

Societal Issues *Social Darwinism Herbert Spencer coins the term in 1862…its basically means SURVIVAL OF THE FITTEST Money = Success The few control the masses The wealthy are seen as blessed by god “PULLING YOURSELF UP BY THE BOOTSTRAPS”

Businesses continued to grow and consolidate *Oligopoly = market with only a few sellers for each product (movie theaters, cell phone providers, tv stations) *Monopoly = situation where 1 company controls all the market (Comcast, TWC) *Holding Company = corporation that buys stocks of other companies to control them *Trust = people who run separate companies as one larger corporation

Who were the leaders of Big Business? *Robber Barons = ruthless industrialists who made money off the little guy and were named for feudal (Medieval Times) lords John D. Rockefeller…Rockefeller Center/Plaza Andrew Carnegie…Carnegie Hall J.P. Morgan…Chase Morgan Bank All the robber barons and Big Business bypassed the south due to its limited resources & capital