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New Methods and Business Organizations By: Jared Thompson, Alexis Terronez, Jordan Bryson, & Madi Burton Rise of the Corporation… A business that is owned by one person is called a sole proprietorship. Two or more people is a partnership. All Businesses were required to remain small during this time. A stockholder’s financial responsibility is limited to how much they have invested in certain areas. The 1800s was when large corporations began to form. V.P Morgan was one of the first to create one of these strong, powerful companies. (US Steel company) Corporation Continued… The size of the corporations does not mean large profits. Sometimes producing more products than they could sell. 1800s to 1900s corporations in US grew to monopolies or near-monopolies. Businesses like coal and iron mines, steel mills, and factories are known as cartels. Business Cycles… The Industrial Revolution brought alternating periods of prosperity and decline which is a pattern that’s call business cycle. In order to do something good you have to sacrifice something bad then eventually it all becomes bad and cause depression but eventually it comes back to good and repeats the cycle. Economic Theories… Physiocrats attacked mercantilism and felt it would bring disaster to the economy. Scottish economist, Adam Smith, he accepted the ideas of the Physiocrats. He is also considered the founder of classical economics. Smith thought that there were two natural laws that controlled the economy… Law of Supply and Demand Law of Competition Theories Continued… Smith had two main supporters… Thomas Malthus David Ricardo He came up with the Principal of Population. He came up with the Iron Law of Wages. These thoughts of economics, like Smith and his supporters didn’t want the government to mess with their businesses, operations, and ideas. Came up with the phrase, “laissezfaire” Capitalism and Changing Production… Start of the individual business Capitalism is an economic system where individuals or corporations, are in control, instead of the government. Capitalism in production is privately owned or ran. As factories progressed they divided manufacturing into a step by step process. They would hire unskilled and less experienced people to do one single task or step. Capitalism Continued… This kind of division of labor increased production. Eventually the idea of interchangeable parts was adopted and accepted. With this idea things could now be assembly in one place. Henry Ford introduces the assembly line. Soon after the conveyor belt was introduced. Question Time?!?!? True or False… A business that is owned by two or more people is a proprietorship. Vocab Definition… Describe the business cycle. Multiple Choice… What does “laissez-faire”? A. Let’s go to Arby’s B. Kill the King! C. Leave things alone D. Let’s attack the government Fill in the Blank… ___________ is an economic system where individuals or corporations have power instead of government.