How did business change during the Industrial Revolution?

Business grew larger and many organized into corporations

Corporations: large, organized companies owned by shareholders

Carnegie, Rockefeller and other leaders were criticized for forming large companies

Critics believed big business was too powerful

They became monopolies Monopolies: large corporations that have

little competition

Monopolies can charge higher prices for poorer quality products

They can do so because they do not have competition from other companies selling the same product

The buyers have no choice but to pay that price or do without the product

They are a safe form of business People invest money in a corporation They are protected if the corporation fails Investors have limited risk or liability for

the debt People can buy stock in the company

with capital (money), in which they earn money

Major corporations made millions by selling stock

Leaders searched for new ways to organize companies

Vertical combination: a business that controls each step in making something

Carnegie bought mining and transportation to help his company produce steel

Horizontal combination: buying one’s competition

Rockefeller bought out other oil refineries to control oil production

They took business away from the competition and became monopolies

They were then called trust companies Trust Companies: A large, powerful

company that often is called a monopoly Businesses were able to increase their

wealth Could employ thousands of workers Became giant industries and very

powerful