19.3 – New methods & Business Organizations By: Rachael, Jessica, TacoManny, and Brennon

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corporations Corporations are business organizations in which individuals buy shares of stock They emerged in the late 1800s with a purpose to allow business owners to organize and elect directors to control the business and allowed individuals to invest in share stock holders. Sole proprietorships and partnerships have their own disadvantages and advantages…

Sole Proprietorships & Partnerships -Sole Proprietorships are owned and controlled by one person -Partnerships are owned and controlled by two or more people Both types of businesses are responsible for all debts even if the debts exceed original amounts of investment. Both usually remain small and small companies with few workers typically cannot afford mass -production methods or the necessary machinery. Corporations were more preferable because shareholders are not liable for corporate debts. In a sole proprietorship or a partnership, the owners are personally responsible for business debts

Capitalism & Monopolies A monopoly is the complete control of the production or sale of goods or service by a single firm. A monopoly could be harmful to a nation’s economy since the economy owns all of the industry, gaining and controlling power and wealth with in the nation. Capitalism is the economic system in which individuals rather than governments control the factors of production. Two types: Commercial Capitalism: involves merchants who bought, sold, and exchanged goods. Industrial Capitalism: when capitalists were involved with producing and manufacturing goods themselves

Mass production Mass Production is defined as the system of manufacturing large numbers of identical items. Until the late 1800s, each of the various parts of a manufactured object was transported to a central part, where workers assembled the object. Henry Ford’s Model T, one of the biggest mass productions in the 1800s-1900s

The Elements of Mass Production DIVISION OF LABOR- different people perform different jobs THE USE OF INTERCHANGABLE PARTS- parts that can go equally well in other components THE ASSEMBLY LINE- a series of workers and machines in a factory by which a succession of identical items is progressively assembled The Assembly Line

Methods of production Methods of production changed during the IR with rapid growth due to new inventions, sale methods, and new methods of production and distribution of goods. inventor, Eli Whitney produced musket’s faster and more efficiently by using division of labor and interchangeable parts to compete with hand made muskets. Cartels are combinations of corporations that control an entire industry. A cartel can control all aspects by owning coal and iron mines, steel mills, and factories that used steel to build machines

THE BUSINESS CYCLE Employees would reduce wages and sometimes the negative effects would spread to other industries, until the economy was in a depression, the lowest point of a business cycle. The business cycle was a pattern brought by the Industrial revolution with alternating periods of prosperity and decline. In the business cycle, if one industry did well, others also prospered. However, if a large firm reduced orders of iron and laid off workers, other companies would be affected with many jobs lost.