Corporate Development During the Industrial Revolution
Corporate Development During the Industrial RevolutionThe Standard Oil Company founded by
John D. Rockefeller and the U.S. Steel Company
founded by Andrew Carnegie. The Standard Oil
Company and U.S. Steel Company were made
successful in different ways due to the actions
of their different owners. The companies differed
in their labor relations, market control, and
structural organization.
In the steel industry, Carnegie developed a system
known as vertical integration. This means that
he cut out the middle man. Carnegie bought his
own iron and coal mines because using independent
companies cost too much and were inefficient.
By doing this he was able to undersell his
competetors because they had to pay the competitors
they went through to get the raw materials. Unlike
Andrew Carnegie, John D. Rockefeller integrated
his oil business from top to bottom, his
distinctive innovation in movement of American
industry was horizontal. This meant he followed
one product through all its stages. For example,
rockrfeller controlled the oil when it was
drilled, through the refining stage,
and he maintained control over the refining process
turning it into gasoline. Although
these two powerful men used two different methods
of management their businesses were still very
successful (Conlin, 425-426).
Tycoons like Andrew Carnegie, “the steel king,”
and John D. Rockefeller, “the oil baron,” exercised
their genius in devising ways to circument
competition. Although, Carnegie inclined to be
tough-fisted in business, he was not a monopolist and
disliked monopolistic trusts. John D.
Rockefeller came to dominate the oil industry. With
one upward stride after another he organized
the Standard Oil Company, which was the nucleus
of the great trust that was formed.
Rockefeller showed little mercy.
He believed primitive savagery prevailed in
the jungle world of business, where only
the fittest survived. He persued the policy
of “ruin or rule.” Rockefeller’s oil monopoly
did turn out a superior product at a
relatively...
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