Industrial Revolution

Corporate development during the Industrial Revolution was made in part by entrepreneurs. Entrepreneurs

were the people who took responsibility for the organization and operation of a new business venture.

These business men often risked the initial money for setting up different types of businesses. With the risk

of large sums of money, some of these entrepreneurs made enormous profits. Two major entrepreneurs of

American history are John D. Rockefeller and Andrew Carnegie.

The Standard Oil Company founded by John D. Rockefeller and the U.S. Steel Company founded

by Andrew Carnegie, both were two corporations that had a great impact on the lives of most Americans.

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 simply cut out the middle man. Carnegie bought his own iron and coal mines, because using

independent companies was unreliable, cost too much and were inefficient. By doing this he now was able

to undersell his steel making competitors, 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, Rockefeller 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).

Entrepreneurs or better known "Robber Barons" like Andrew Carnegie, "the steel king," and John

D. Rockefeller, "the oil baron," exercised their genius in devising ways to circumvent 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 by bringing a new energy and

overwhelming strategy into his business. 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 in

his business dealings. He believed primitive savagery prevailed in the jungle world of business, where only

the fittest survived (Social Darwinism). He pursued the policy of "ruin or rule." Rockefeller's oil monopoly

did turn out a superior product at a relatively cheap price. Rockefeller believed in ruthless business,

Carnegie did not, yet they both had the most successful comp!

anies in their industries (The American Pageant, pages 515-518).

Rockefeller treated his customers and competitors in 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. For example Standard Oil used ruthless tactics when Rockefeller threatened

to 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 some did not talk to each other for years

(McCloskkey, page 145). Although both Carnegie and Rockefeller created extremely successful

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. Steel company was credited to the fact that

their owners ran them with great authority. In this very competitive time period, many new businesses

were being formed. It took talented businessmen to get ahead and keep the companies running and make

the fortunes that were made during this period.

Work Cited:

Bailey, Thomas A. and David M. Kennedy: The

American Pageant. pp. 515-518. 1987.

Conlin, Joseph R. History of the U.S.: Our Land,

Our Time. pp. 425-426. 1985.

Latham, Earl: John D. Rockefeller; Robber Baron Or

Industrial Statesman? (Problems in American

Civilization Series). pg. 39. 1949.

McCloskey, Robert Green: American Conservatism In

The Age Of Enterprise 1865-1910. pg. 145. 1951.