History 479B

Fall 2012

Devine

Study Questions: Porter, The Rise of Big Business

Preface

1. How have developments over the past twenty years changed the ways in which both historians and the American public have viewed Big Business? What factors caused this shift in perception?

Chapter 1

1. According to Porter, why was the coming of the giant corporation “profoundly unsettling” for many Americans? Why was the public reaction to the rise of big business paradoxical?

2. Over the years, how have historians approached the history of the rise of big business? How did the work of Alfred Chandler change historians’ focus?

3. Between 1860 and 1920, when people spoke of big businesses they usually had in mind three kinds of enterprises in particular. What were they? What characteristics or distinctive features made these firms “big businesses” as opposed to other businesses not considered “big”?

4. What do the terms “fixed capital,” “working capital,” “fixed costs,” and “operating costs” mean? Why were fixed capital and fixed costs more significant for big businesses?

5. How did the rise of big business change the process of marketing and sales?

6. Why big businesses have to be run differently than small businesses? In what ways were they administered differently?

7. How did the rise of big business affect the relationship: 1) between ownership and control and 2) between employees and employer?

Chapter 2

1. What role did the rise of the railroads play in the emergence of Wall Street as the nation’s center of finance? How did one precipitate the other?

2. Why would working for a railroad during the 1860s and 1870s have been good training for someone who went on to run a manufacturing business in the 1880s and 1890s?

3. How did the railroad owners’ fixed costs help to precipitate rate wars and price cutting? Why did pools fail to end cutthroat competition?

4. What three conditions had to be met before the modern corporation could arise in American manufacturing?

5. What is vertical integration? What is “integrating forward”? What is integrating “backward”? Why would a company do each of these things? Why did many vertically integrated businesses succeed?

6. What is an “oligopoly”? Why did oligopolies emerge in several industries?

7. How did Gustavus Swift modernize the meat packing industry?

8. Why did the electrical industry (and other industries) need to develop a sophisticated marketing and merchandizing strategy?

9. How did Carnegie engage in backward integration?

10. What is horizontal integration? How did falling prices and economies of scale spur horizontal integration?

11. How did John D. Rockefeller come to dominate the oil industry?

12. What factors account for the large number of mergers at the turn of the 20^th Century?

13. What were the unintended consequences of the Sherman Anti-Trust Act?

14. Why did the emergence of an industrial securities market facilitate combinations?

15. Why did some horizontal combinations succeed while others failed? For example, why did the steel and oil trusts succeed while the salt trust failed?

16. Once prices stabilized, how did firms compete for greater market share?

Chapter Three

1. What aspects of the rise of big business disturbed many Americans? What role did the government play in addressing these concerns?

2. What effects did industrialization have on workers and the nature of work?

3. How did Taylorism and welfare work differ in their approach to dealing with industrial employees?

4. How did big business influence the education system, farm life, and the nature of labor unions? In short, how did big business facilitate the creation of a “corporate civilization” in the United States?

5. How did the corporate civilization spur consumerism?

6. According to Porter, why have critics of industrial capitalism and America’s materialist culture failed to win over the majority of the people to their point of view?