The Different Business Practices of Andrew Carnegie and...

Michael Callicutt Dr. Claude Black HY 273 15th November 2011 The Different Business Practices of Andrew Carnegie John D. Rockefeller Two of the most well-known and successful companies of the Industrial Revolution were the Standard Oil Company, and the Carnegie Steel Company. Both were exceedingly successful in virtually removing all competition in their respective fields of business and controlling almost all of the production capacity of their respective products in the United States. Their founders, John D. Rockefeller of the Standard Oil Co., and Andrew Carnegie of the Carnegie Steel Co. conducted business practices that were different from one another in how they dealt with competition as seen in the undercutting or cheap type†¦show more content†¦While Standard Oil did come to basically control the price of oil in the United States, it never engaged in predatory, or deep and unnecessary price cutting to push out its competitors. John McGee states this about how Standard Oil accomplished this by other means: â€Å"It is correct that Standard discriminated in price, but it did so to maximize profits given the elasticities of demand of markets in which it sold. It did not use price discrimination to change those elasticities. Anyone who has relied upon price discrimination to explain Standards dominance would do well to start looking for something else. The place to start is merger† (McGee 168). Carnegie on the other hand preferred to buy out all competitors that were in the same area of production as he was, and consolidate. Through consolidating most steel mills in the Pittsburgh/Pennsylvania area, he was able to control that particular step of the production process in the steel business, therefore maximizing his profits like Rockefeller, but in a different way. Carnegie preferred stable prices and stable business, and Harold Hotelling manages to place Carnegies view on why he consolidated his mills as such: â€Å"This is the fact that of all the purchasers of a commodity, some buy from one seller, some from another, in spite of moderate differences of price. If the p urveyor of anShow MoreRelated Robber Barons and the Captains of Industry Made Americas Economy of Today862 Words   |  4 Pageseconomy it is today. The Robber Barons and the Captains of industry were both very similar but completely different with how they operated in the economic world. Robber Barons made wealth in a variety of ways but still maintained the sense of thieves from the way they attained their wealth and treated their people hence forth their name. The Robber Barons were considered a unlikable form of business because of the effect they had a negative effect on the community. 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