Moving to the next level -> Business Evolution Moving to the next level ->

Feudalism, What is it? Feudalism, What is it? Business in the Stone Age: According to Wikipedia, Feudalism is a term that was first used in the modern period of the 17th century. Some of the earliest writings go back to 3000BC, although business really goes back to the stone age. Feudalism is a system in which Aristocrats, or one class of people, control property rights. Although this type of system worked well in the middle ages, it eventually changed because of the need to motivate workers. The term we use today of “Landlord, tenant, and lease” was adapted from this time when rent was charged and negotiated to the “tenant”, and any profit made above the rent was able to be kept. Tenant farmers could now choose to give the landowner a share of their produce or sell it and keep anything above rent.

Hierarchy Property Rights Why hierarchy is needed Similarities to current business strategies Rights of Property The hierarchy is similar to what is known today as CEO, President, and manager. It is a ranking of people according to their relative rights and responsibilities. With these responsibilities these ranked people could make demands like CEO’s, President’s, and manager’s of our time. Of course, along with these responsibilities came judgment on how these people made things work or not work for the company. They could then be promoted or fired. Property rights, which are well used today, were then created for people for rights to own and call their own. These properties could consist of land, items that are on that land, and the laborer’s own labor.

Mercantilism Mercantilism and its differences According to the Evolution of Business, Mercantilism is the “Business or economic system in which merchants and bankers organize the trade of products across markets and countries until they are put to their most valued use.” Of course this is different from Feudalism because this is not just one class of people that are responsible for the organization of trades and products. That responsibility was now put towards the bankers and merchants. With all this in mind, this graph shows the evolution from Feudalism to Capitalism.

Capitalism As stated in the Evolution of Business, Capitalism is the “Business or economic system in which capitalists or industrialists privately own the physical capital of industrial production and use it to produce, trade and distribute products. With it being hard to barter for things since most things are not equal, it was easier to use gold and silver to trade for goods. People were also able to lend out their money depending on risk and interest rate, or what is to be earned for lending. The borrowers and lenders then negotiate the interest rate or price that the capital will be loaned. This is how a capital market emerges. This is mostly what we are involved in today.

Commerce Commerce defined Dept of Commerce According to Wikipedia, “Commerce is a division of trade or production which deals with the exchange of goods and services from producer to final consumer. It comprises the trading of something of economic value such as goods, services, information or money between two or more entities. Commerce functions as the central mechanism which drives capitalism and certain other economic system.” We use commerce is our daily things that we do in our business systems today. There is even a department of commerce in our United States government that oversees these systems.

Industrial Revolution New ideas and transformations Technology: Then and now Technology has brought so many things to a different level. With technology transforming the way we do things it is easier to get things done faster and more efficiently in our business and ways of life. According to Evolution of Business, The Industrial Revolution is an era in the eighteenth and nineteenth centuries that marked improved production and trade brought about by advances in technology. One of the technological improvements was the steam engines, which might have been the main cause for this revolution. It helped produce quicker means of travel and communication.

Rockefeller Monopolies Rockefeller’s Idea With laws preventing monopolies in the US being weak, people like John D. Rockefeller were able to manipulate prices and supply of products. According to Evolution of Business, Rockefeller’s solution to monopolize his businesses was to use the profits from his efficient oil refineries, and capital he raised from friends, to secretly buy up every small refining company he could get his hands on.

Modern Class System In this modern time we use a class system that describes our group of wealth according to our “amount of capital, wealth and other factors such as heredity, kinship, fame, occupations, and connections.” Working class is the people who own their own labor and nothing else. Lower middle class is people who still must posses a regular job and have some capitol. Upper middle class are people like small business owners and entrepreneurs. Upper middle class and upper class are similar, but are differed on family ties, connections through marriage, and fame.

Modern Day Systems LLC Joint-Stock Company Sole Proprietorship Partnership Multinational Company Eventually companies evolved into different systems such as LLC, joint-stock company, sole proprietorship, partnership, and multinational companies. These companies changed the traditional company owning and made companies able to be owned by members, individuals, and family members. This includes people being able to be liable for the debts owned by the company and some that are not liable.

References Jones, Gareth R. (2007). Introduction To Business: How Companies Create Value for People. The McGraw−Hill Companies Wikipedia, the Free Encyclopedia. (2008). Commerce. Retrieved January 26, 2009, from http://en.wikipedia.org/wiki/Commerce Wikipedia, the Free Encyclopedia. (2008). Feudalism. Retrieved January 26, 2009, from http://en.wikipedia.org/wiki/Feudalism