In what ways were railroads America's “first big business,” as Glenn Porter claims?
Glenn Porter claims that railroads revolutionized management, created new forms of corporate finance, altered competition practice and changed labor relations (Porter, p. 34). Railroads were first businesses that required a huge amount of money to be built. They were pioneers in the calculation of cost analysis and future demands. Moreover, they were first to practice performance analysis of employees. The impersonal bureaucratic setting of “big business” company was first incorporated in railroads. The railroad workers were first to organize themselves into labor unions. Thus, railroads introduced many practices that became the key features of big corporations.
You have read three reflections on making money and being rich in 18th and 19th century America (Ben Franklin, P.T. Barnum, Andrew Carnegie). Write an essay comparing their commentaries. Which, if any, of the three seems the most relevant to problems and issues of 2016?
I think that the advice and rules of these three successful Americans for the most part stay relevant even today. I will highlight those of them that seem to me the most applicable in the today life. Interestingly, the rules of these prominent men sometimes overlap. Benjamin Franklin and P.T.Barnum emphasize the importance of time management. The need to make a decision and concentrate on its implementation seems to be the most important feature of a successful businessman, as all the three authors highlight it. Notably, Barnum and Franklin pay a special attention to business ethics and relations with people: customers, coworkers, employees. Honesty and straightforwardness, respect for other people’s work, decent manners and kindness make a likable man. Rules of Barnum seem to be the most down-to-earth and applicable to business. He points out the significance of a right location, advertising, knowledge of markets and competitors, etc. Today’s SWOT analysis and marketing plan are unimaginable without these features. Carnegie emphasizes personal character traits that help to succeed in business, for example, being hardworking and positive, having an initiative, etc. In sum, these three authors give advice in different domains: personal, interpersonal, entrepreneur, ethical, that is as relevant now as it was in their time.
3. Although giant manufacturing companies did not emerge until the late 1800s and early 1900s, the period from the new Constitution to the Civil War saw the establishment of preconditions which set a framework for the growth of big business in manufacturing. Discuss with respect to at least two of the following: a. The Constitution and its interpretation by the Supreme Court under John Marshall b. The Transportation Revolution c. The pattern of legal decisions sometimes called the “release of energy”
The Constitution presented the federal government with the right to control and regulate trade among the states when “necessary and proper” (Article 1, Section 8). The interpretation of what was necessary and proper was a prerogative of the Supreme Court, as due to John Marshall, it gained a power to review laws and define their constitutionality. The decisions of John Marshall and the Supreme Court in the first thirty-five years of the 19th century set a critical foundation for the development of American business in the years to come. The Chief Justice protected obligations set by contracts and ruled that states have no right to control interstate trade. Thus, the American companies were not limited by a state. Instead, they could operate on the national level. However, the countrywide operation was made impossible by lack of road infrastructure and ancient means of transportation. Before the transportation revolution happened, businesses could not use the opportunities of the national market. Nonetheless, in the first part of the 19th century there was a significant progress in transportation methods and interstate infrastructure. First, the Erie Canal was built that facilitated transportation. Further, new means of transportation were invented and developed. Instead of sailing ships, the Americans began to build ships that worked on the steam power. Later, steam engines were used to improve overland transportation. Railroads were built, making overland transportation faster and cheaper. These changes played a considerable role in turning locally operating businesses into national companies. Other important trends of that time were specialization and interdependence of different regions. For instance, the South produced raw materials (cotton), which was used to produce textiles in the Northeast, while both depended on the West for grains and livestock. (ppts.)
4. “Big business” manufacturing firms, as Glenn Porter describes them in his book, were not just quantitatively larger than the businesses they replaced or supplanted. They were qualitatively new kinds of organizations. What were the main features of “big business” companies (other than their size) that made them different from other businesses?
“Big business” companies required a significantly bigger capital as for the start-up costs, so for higher constant costs. The steady, high-volume operation had to be maintained, while temporary halt of production caused big expenses. In order to be profitable, the production had to be stable and predictable. Another significant difference of “a big business” from enterprises of the earlier time was the structure of ownership. If earlier on, trade and production was a family business and often ceased to exist with the death of the owner, the new organizational structure made corporations almost immortal. Owners no longer were the managers of corporations. “Big businesses” were managed by skilled professionals. At the same time, ownership of the company no longer was concentrated in the hands of one person or one family. As a corporation required a big capital, the number of shareholders grew significantly. Another important change occurred in localization of a business. Huge corporations were spread all over the country, its various departments, factories, branches situated in different states. Besides, “big businesses” altered the very character of production. Instead of specialization, they extended their functions and products. The one and the same company purchased raw materials, produced goods, wholesold products, and transported them. In this sense, corporations were self-sufficient and autonomous. However, such a diversity of functions required more complex administration. Consequently, the corporate bureaucracy emerged. Vertical development of administrative hierarchy created a huge social and economic gap between different levels of management and lead to impersonalization of work relations inside the corporation. The enormous amount of data required new ways of dealing with it. So, new filing and storage systems were created. And the last but not the least feature of “big business” companies was an accumulation of wealth and power. The business tycoons were influential and powerful people of their time.
5. An important recent study of slavery says that between the American Revolution and the Civil War, “slavery’s expansion shaped every crucial aspect of the economyof the new nation.” a. What enabled the rapid expansion of slavery in this period? b. “Slave plantations were the most important kind of American business in the period from the Revolution to the Civil War.” Discuss this claim.
The vast territory of the United States was underpopulated in the period from the American Revolution to the Civil War, thus, shortage of labor power occurred. Slavery, however, immoral, provided the cheap labor power for hard manual work on the Southern plantations. If this ugly phenomenon had not existed in the first century of the American Independence, the economic development of the USA would have been slower. Slave ownership allowed to cotton planters to cultivate huge territories and grow cotton in vast amounts. Provided that slave plantations never existed, the North would not be able to produce so many textile and get rich. Thus, the existence of slave plantations was a critical factor in the economic development of the States and the major cause of the Civil War.
