- Slides: 9
19. 3 – New methods & Business Organizations BY: RACHAEL, JESSICA, TACOMANNY, AND BRENNON
THIS MESSAGE IS APPROVED BY POPE SNYD (CHECK OUT HIS ONE NOTE)
CORPORATIONS Ø Corporations are business organizations in which individuals buy shares of stock Ø They emerged in the late 1800 s with a purpose to allow business owners to organize and elect directors to control the business and allowed individuals to invest in share stock holders. Ø Sole proprietorships and partnerships have their own disadvantages and advantages…
Sole Proprietorships & Partnerships • -Sole Proprietorships are owned and controlled by one person • -Partnerships are owned and controlled by two or more people • Both types of businesses are responsible for all debts even if the debts exceed original amounts of investment. • Both usually remain small and small companies with few workers typically cannot afford mass -production methods or the necessary machinery. • Corporations were more preferable because shareholders are not liable for corporate debts. In a sole proprietorship or a partnership, the owners are personally responsible for business debts
CAPITALISM & MONOPOLIES • Capitalism is the economic system in which individuals rather than governments control the factors of production. Two types: • Commercial Capitalism: involves merchants who bought, sold, and exchanged goods. • Industrial Capitalism: when capitalists were involved with producing and manufacturing goods themselves • A monopoly is the complete control of the production or sale of goods or service by a single firm. • A monopoly could be harmful to a nation’s economy since the economy owns all of the industry, gaining and controlling power and wealth with in the nation.
MASS PRODUCTION • Mass Production is defined as the system of manufacturing large numbers of identical items. • Until the late 1800 s, each of the various parts of a manufactured object was transported to a central part, where workers assembled the object. Henry Ford’s Model T, one of the biggest mass productions in the 1800 s-1900 s
The Elements of Mass Production 3 Elements Ø DIVISION OF LABOR- different people perform different jobs Ø THE USE OF INTERCHANGABLE PARTS- parts that can go equally well in other components Ø THE ASSEMBLY LINE- a series of workers and machines in a factory by which a succession of identical items is progressively assembled The Assembly Line
METHODS OF PRODUCTION • Methods of production changed during the IR with rapid growth due to new inventions, sale methods, and new methods of production and distribution of goods. • inventor, Eli Whitney produced musket’s faster and more efficiently by using division of labor and interchangeable parts to compete with hand made muskets. • Cartels are combinations of corporations that control an entire industry. • A cartel can control all aspects by owning coal and iron mines, steel mills, and factories that used steel to build machines
THE BUSINESS CYCLE • The business cycle was a pattern brought by the Industrial revolution with alternating periods of prosperity and decline. • In the business cycle, if one industry did well, others also prospered. • However, if a large firm reduced orders of iron and laid off workers, other companies would be affected with many jobs lost. • Employees would reduce wages and sometimes the negative effects would spread to other industries, until the economy was in a depression, the lowest point of a business cycle.