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AP U.S. History 1.5 Period 6: 1865-1898
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AP U.S. History 1.5 Period 6: 1865-1898. During this time, wages around the country did what?

AP U.S. History 2.2 Period 6: 1865-1898
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AP U.S. History 2.2 Period 6: 1865-1898. In this AP U.S. History question determine why the structures of companies in industries like steel b...

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AP U.S. History 1.2 Period 7: 1890-1945. Antitrust laws like the Clayton Act were a direct response to what development in the United States economy?

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AP U.S. History 2.2 Period 6: 1865-1898 230 Views


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AP U.S. History 2.2 Period 6: 1865-1898. In this AP U.S. History question determine why the structures of companies in industries like steel began to change in the late 19th century.

Language:
English Language

Transcript

00:00

[ musical flourish ]

00:03

And here's your Shmoop du jour, brought to you by vertical integration,

00:07

the ultimate solution for ending size and shape discrimination.

00:11

During this time, the structure of companies and industries

00:13

like steel changed because companies... what?

00:17

And here are your potential answers.

00:19

[ screaming ]

00:22

We know during this time that steel and oil companies were run

00:25

by people with a thirst for profit.

00:27

These men turned their sights on making their companies

00:30

as big and powerful as possible,

00:32

all in the interest of earning more of that sweet, sweet green.

00:34

Let's see which answer best describes how the industrialists

00:37

could alter those companies to line their pockets

00:40

with even more dough.

00:41

Did the structure of big companies change because they

00:44

B - began to outsource their distribution networks?

00:47

Well, if you wanted more control over your company,

00:49

you probably wouldn't outsource parts of the process to other people.

00:52

Was the structure of these industries changing because they

00:55

C - lost their monopolies? Well, actually,

00:57

their monopolies were stronger than ever.

00:59

By consolidating their business and focusing even more ruthlessly

01:02

on the bottom line, companies became so

01:04

powerful that they didn't even have to rely on Congress for favors.

01:07

So that knocks out C and D.

01:09

Which means that these companies were changing because they

01:13

A - came to control all steps of the production process.

01:16

Remember the term "vertical integration"?

01:18

That's when a company comes to control every step of the production process

01:21

from harvesting the raw materials all the way

01:24

up to selling the final product.

01:25

And it eliminates the ineffiency of having a middle man

01:28

so these big companies consolidated

01:30

all the business under one roof,

01:32

driving profits even higher.

01:34

So A is the correct answer. Looks like the industrialist

01:36

top-down approach was, well, from the top down.

01:40

[ angelic harmony ]

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