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Big Business

Big Business. What is a corporation? Businesses that sell portions of ownership called stock shares (or stocks) What role do stockholders play in a corporation? Individuals invest money through the purchase of stock This makes them a part owner

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Big Business

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  1. Big Business • What is a corporation? • Businesses that sell portions of ownership called stock shares (or stocks) • What role do stockholders play in a corporation? • Individuals invest money through the purchase of stock • This makes them a part owner • The money allows the company to engage in business, and hopefully, generate profit • Stockholders then receive a portion of the profit as a return on their investment • Why are corporations advantageous for stockholders? • They can only lose the amount of money that they invest, no more • They are free to sell their stock to whomever they want

  2. Corporate Leaders • Andrew Carnegie • Worked in a railroad company and worked his way up • Turned to steelmaking…created the U.S. Steel Corp. • Used vertical integration to control every step of process • John D. Rockefeller • Consolidated businesses using horizontal integration • Standard Oil Company owned 90 percent • Formed a trust that grouped many companies under one board of directors • The first billionaire in the world • Leland Stanford • Made money selling equipment to miners • Governor of California • Founded Central Pacific Railroad • Believed that workers should be part of the ownership process • All three gave back to charitable causes later in life (although Rockefeller gave less and later in life)

  3. Vertical and Horizontal Integration

  4. Vertical and Horizontal Integration Store #1 Wal-Mart Store #2

  5. Vertical and Horizontal Integration

  6. Vertical and Horizontal Integration

  7. Social Darwinism • Define social Darwinism. • The view that Darwin’s “survival of the fittest” theory determines who would succeed in business and in life • Why did some business leaders give money to charity? • They felt that the rich had a duty to aid the poor

  8. The Antitrust Movement • Why did critics oppose the practices of big business? • They believed that big business used unfair practices like driving smaller competitors out of business and creating monopolies • How did concerns about trusts lead to the Sherman Antitrust Act? • Voters were concerned about the political power of trusts and wanted the government to control monopolies and trusts • Was the Sherman Antitrust Act successful in curbing the power of wealthy trusts? • No • Why (or why not)? • It did not legally define what a trust was and was too difficult to enforce

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