Corporate Development During The Industrial Revolution

Corporate Development During the Industrial Revolution


The 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 poli
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