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As trade increased in the 1700s, several dramatic changes occurred in the American colonies:

• Colonies had resources but no labor.

• Therefore, they brought in indentured servants (contracted to serve for a specified period of time; usually 7 years, until contract was “worked off”)

• and slaves from Africa

• Most of the labor resources were needed for the tobacco and cotton plantations in the southern colonies (Virginia, Carolinas) -- Labor-intensive

•Additionally, indigo was cultivated in the Carolinas (starting in the 1740s) and provided dye for British textile industry

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Overview of history of American business:

•5 major eras can be identified; the dates for each era vary depending on different authors of business history.

Reason: These eras overlap, and we can find elements of each in the next period.

1) Industrial Revolution (about 1760 – 1820)

2) The Entrepreneurial Era (about 1810 – 1910); also called the Age of Invention

3) The Production Era (various dates); about 1860-1925

4) Marketing era (sometimes divided into 2 different eras: sales and consumer eras )

5) The Global era

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Let’s discuss examples of such innovations by entrepreneurs that revolutionized American business.

QUESTION: What are SOME EXAMPLES OF machines or mechanical instruments that revolutionized American business?

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Q: What do you think happened as a result of the intensive production during the production era? Excess supply of goods; increased inventories

Q: What can/do firms do to move their inventory / get rid of the excess supply? (increased marketing; promotional efforts)

Q: What happens when many or all firms in an industry increase their marketing, e.g. cut prices, offer coupons, specials, etc.? (increased competition, loss of market share)

Q: What can/do businesses do to keep their customers under intense competition, especially if customers have more discretionary income available? (focus on the customer; differentiate products)

è Beginnings of market research and integrated marketing (4 P’s--product, price, placement, promotion)

Q: What characterizes the Global Era? What are the buzz words?

Ask BEFORE video: What are trusts?

Who are the Industrial Giants and what industries did they control?

What characterized these Industrial Giants?

What effect did the trusts of the Industrial Giants have on farmers, miners, and ordinary people?

What was the change in government attitude toward business under Presidents McKinley and Theodore Roosevelt?

What business conditions were exposed once the Industrial Giants were challenged by the government?

Characterize this period of time.

Laissez-faire system of capitalism => no government intervention until late 1800s (1880s)

Banks were started as independent businesses; dramatic increase in numbers in late 19th century (around 2000 banks in 1860 => 250,000 in 1900/05)

•First banks were commercial banks, the specialized as investment banks, especially for the expansion of the railroads, to fund the Captains of Industry

•J.P. Morgan started the House of Morgan in NYC; financed loans to governments (U.S., Britain) the railroads, steel industry, GE, International Harvester.

•Andrew Carnegie: worked his way up. First billion $ corporation; gave $$$ away to research; philanthropist

•Andrew Mellon: founder of Aluminum Company of America (ALCOA)

•J.D. Rockefeller started to set up his oil monopoly (Standard Oil).

Inventions, increased production, and WWI caused dramatic increases in demand.

Continued specialization led to standardization: mass production.

1909: Henry Ford’s Model T; 1913 the moving assembly line

The rise of modern management: Henri Fayol

Focus: the production process (engineering) and increasing efficiency