Industry Essay, Research Paper
Corporate Development During the Industrial Revolution The Standard Oil Company founded byJohn D. Rockefeller and the U.S. Steel Companyfounded by Andrew Carnegie. The Standard Oil Company and U.S. Steel Company were madesuccessful in different ways due to the actions of their different owners. The companies differedin their labor relations, market control, andstructural organization. In the steel industry, Carnegie developed a systemknown as vertical integration. This means thathe cut out the middle man. Carnegie bought his own iron and coal mines because using independentcompanies cost too much and were inefficient.By doing this he was able to undersell his competetors because they had to pay the competitorsthey 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,” exercisedtheir genius in devising ways to circumentcompetition. 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 onlythe fittest survived. He persued the policy
of “ruin or rule.” Rockefeller’s oil monopoly did turn out a superior product at a relatively cheap price. Rockefeller belived in ruthless business, Carnegie didn’t, yet they both hadthe most successful companies in their industries.(The American Pageant, pages 515-518) Rockefeller treated his customersin the same manner that Andrew Carnegie treated his workers: cruel and harsh. The Standard Oil Company desperately wanted every possible company to buy their products. StandardOil used ruthless tactics when Rockefeller threatenedto start his own chain of grocery stores and put local merchants out of business if they did not buy oil from Standard Oil Company. Carnegie dealt with his workers with the same cold lack of diplomacy and consideration. Carnegie would encourage an unfriendly competition between two of his workers and he goaded them into outdoing one another. Some of his employees found working under Carnegie unbearable. These rivalries became so important to the employees that somedidn’t talk to each other for years (McCloskkey, page 145). Although both Carnegie and Rockefeller created extermely successsful companies, they both used unscrupulous methods in some aspect of their corporation building to get to the top. The success of the Standard Oil Company and U.S. Steelcompany was credited to the fact that their ownersran them with great authority. In this very competetive time period, many new businesseswere being formed and it took talented businessmen to get ahead and keep the companies running and makethe fortunes that were made during this period. Terra HarnishHeather Rodgers Carly Wolfensberger BIBLIOGRAPHY Conlin, Joseph R. History of the U.S.: Our Land,Our Time. pp. 425-426. 1985. Bailey, Thomas A. and David M. Kennedy: The American Pageant. pp. 515-518. 1987. Latham, Earl: John D. Rockefeller; Robber Baron OrIndustrial Statesman? (Problems in American Civilization Series). pg. 39. 1949. McCloskey, Robert Green: American Conservatism In The Age Of Enterprise 1865-1910. pg. 145. 1951.>