History of Business - Case Study Example

No. 12345 HISTORY OF BUSINESS ABC of XYZ Department of LMN 29 April, Table of ContentsContents Page No Introduction 03 Big Business 03 Marketing Development and Consumerism 04 Development and Impact of Technology 06 Historical Perspective on Entrepreneurship 07 The Changing Nature of Work 07 Deindustrialization 08 References 10 Introduction The business world has taken centuries to arrive at this present stage and peak. Staring from ancient times, the human being has put its abilities, knowledge, expertise, and experience to build and improve its working field and life. This paper has mainly focused on the issues that are related to domestic and international businesses and a brief review of different developing aspects of business filed have been discussed. The paper initially discusses the concept of Big Business in the modern business world and then a brief history highlights its evolution. In the next segment, historical perspectives of marketing, consumerism and entrepreneurship have been discussed. Further by discussing the impact of technology, changing nature of work and the concept of deindustrialization, an attempt has been made to highlight the historical evolution and portrait of the current business scenario. Big Business The term is specially referred to huge sized organizations or multinational businesses either in individual or collective sense. Today Microsoft, Google, General Motors, and Wal-Mart are leading organizations that are the leading Big Businesses. The term came on the horizon just after the American Civil War along with the combination movement when the US Congress passed the legislation to allow the individual business entities to form up corporations. From 1895 to 1905, small organizations or firms took benefits from new legislation and consolidated into huge corporation through mergers and acquisitions processes. During the early phase of the Big Business, the US government had a lenient policy toward the business. Along with large public opinion, the government also believed on the laissez-fair theory that demands free economic markets without the government intervention. Therefore free developing market environment created a competition that led to fair prices for consumers. But it was a temporary phase. Within few years, these corporations became dominant on the American industries. They quickly gained control of all the aspects of the market of their respective industry and set new business trends and American life styles. Such corporations and their owners became exceedingly rich and influential mostly at the cost of numerous poor workers. For example during that era, Andrew Carnegie’s Carnegie Steel, John D. Rockefeller’s Standard Oil Company, J.P. Morgan’s Banking House, and Cornelius Vanderbilt’s New York Central Railroad System were the leading Big Business organizations. The owners of Big Business were considered as “robber barons” e.g. Rockefeller had a control of about 90% of the oil refining capacity at his time. During 1882, Rockefeller consolidated his control by ascertaining a monopoly. It brought number of oil companies under one board of trustees. Consequently, Rockefeller virtually owned the whole oil business in the United States and thus he could set prices at his own. Other industries and companies showed an instant response and quickly emulated this model. By taking advantage of their firm control, they also pushed the prices high in their respective field. After the World War II, the industrial era was mainly based on the new technology of computers which captured all economic markets within few years of its invention. Major Big Businesses based on this invention included IBM, Microsoft, and Intel. With the invention of computer, the electronics industry boosted up than ever. Integrated circuits, radio and television set new dimension in the business field. Sony, JVC, Texas Instruments, and Erik Jonsson were the leading Big Businesses of the electronics field. Lastly the invention of nuclear technology and fossil fuel has also given the edge to the global Big Businesses. Since the Big Business corporations have a huge market share, therefore they put significant impact on the investors, labors, customers, and the pricing and competition at their will. This aspect of Big Business remains a long-lasting concern for politicians and economists. In 2005, majority of American public was of the opinion that the owners of Big Businesses have strong influence on the US government (Carney, 2006). Marketing Development and Consumerism Marketing is an integrated process through which organizations determines the products of customer’s choice and then build effective relationship with them for future consequences. The ultimate objective is to create shareholder value from the customers (Kotler et al, 2008). Throughout the business history, the marketing has been remained changing with respect to the change in customers’ trends and approaches. From the ancient times, the marketing development had a great deal with marketing related theories and concepts. Although there are scholars that argue about the presence of marketing ideas during the ancient times but most of the historians argue that modern marketing concepts and theories were branched out at the start of 20th century. Marketing development strategies have been changed with respect to the demand, that’s why the historians have divided the development of marketing on the basis of its orientation. It includes the production, product, sales, market, and the customer orientation eras. From capitalism till 1950, the marketing strategies revolved around the products and production of goods. Due to this marketing approach the research in business field focused on technical products. Packages were primarily designed to protect the company’s products while prices were based on the cost of production and its distribution. Fredrick Winslow Taylor was the first one who presented the scientific approach of marketing and management (Taylor, 1911). After 1950s, marketing development progressed in terms of sales and market. The businessmen started emphasizing on sales and target markets to earn shareholder value. The most modern approach of marketing is based on customers’ orientation. Since general public is the end user of products and services of the companies. That’s why their influence counts a lot. In response of their instant influence and demand, companies become customer-oriented that in general is known as consumerism. It effects and pressurizes the companies to produce products and services with respect to public wishes. Up to great extent the goals of consumerism are almost the same that are of the marketing. The purchase and sale of goods and commodities is an ancient practice of human being since its origin. Although consumerism is a global phenomenon, it has strong relationships with the western world. The industrial revolution and capitalist movement during the 19th century had a great impact on industrial infrastructure and capital goods sector. In response of this trend, consumerism took a great turn (Ryan, 2007). Although agriculture industry, general commodities and commercial activities progressed a lot but even then their status was below the other corporate sectors. Working class had a very tough life as they had to work on 16/6 policy for low salary. They had less time and money for their own life or enjoyment. The industrial revolution created an extraordinary economic build up. It was probably the first time in human history that products were available in massive amount at affordable rates. It was the inception era of mass consumption that highlighted the concept of consumerism. Fredrick Winslow Taylor was the first one who presented his theory of scientific management. The concept of consumerism has been evolved through several strong bases. It was not just an outcome of Capitalism. The concept of conspicuous consumption started at the start of 20th century. After the mid of 20th century, this term rapidly spread in United States and was considered as a part of media theory, cultural jamming and productivity. During the later stage of 20th century, the concept of materialism increased. The US society has started “a shift away from values of community, spirituality, and integrity, and toward competition, materialism and disconnection” (Madeline, 2007). Development and Impact of Technology Technological advancement has put significant impact on the human to control its natural environment and to maintain a high standard of living. With the application of research and development in technology, human being have saved and extended its life duration. Human life is now easier, its working environment is much better than ever and of course it has saved its valuable time and money on eternal basis. The invention of telephone, computer, aircraft, and wheel have a leading contribution of time saving while printing press and internet has made the track much easier to build new technologies. Beside the pleasant picture technologies, the human and other animal species have adversely affected by some of the technologies. The invention of weapons and especially the nuclear weapons have put the life of millions of people in danger. Historical Perspective on Entrepreneurship The concept of entrepreneurship has wide range of meanings. It is a French word that means “to undertake” i.e. at one end it refers to a person who carries out changes to transform the innovations into economic goods. On the other side, it also refers to a person who wishes to work for itself. The most obvious form of entrepreneurship is the start of new business. The work done by Richard Cantillon and Adam Smith during the late 17th and early 18th centuries is considered as the pioneer work on entrepreneurship. Unfortunately their work could not get recognition till the late 19th century. In 1940, Joseph Schumpeter described that entrepreneurship is a process in which a new idea or invention is transformed into a successful innovation (Schumpeter, 1942). Thus according to Schumpeter, the creative destruction is mainly responsible for the market expansion and its dynamism. Contrary to Schumpeter, the traditional microeconomic theory did not accept the entrepreneurship within its theoretical frameworks. Frank H. Knight in 1921 and Peter Drucker in 1970 considered the entrepreneurship as risk taking process. In 1974, Robert Sobel wrote “The Entrepreneurship: Explorations within the American Business Tradition”. Similarly Zoltan Acs and David Audretsch did further research in the same field while more than 100 experts worked around the entrepreneurship, its policies and social impacts. The Changing Nature of Work The internal and external environments of organizations modify the nature and environment of work throughout the world. During the recent years, the work and its role in society has become a noteworthy topic of discussions among the public. Some people are of the opinion that nature of work is changing rapidly and we are the pioneers of a modern era (Arthur and Rousseau, 1996) while the other group argues that work has become outdated. Many analysts consider such changes evolutionary with respect to changes in demography, technology, markets, organizational structure, work practices and business management. Until last two centuries, the meaning of work was considered as the agricultural work or any household labor. Still it is considered an agricultural activity in many parts of the world. However, now it is a small fraction of total work in developed countries with dwindling trend in other developing countries. Before the agriculture era, the human life revolved around hunting and gathering. During pre-industrial era, there were many kinds of works and workers. Beside the agriculture, other important nature of work was in the shape of rural household industry, particularly spinning and weaving. Self employed and trades were common natures of different works. A huge part of population was involved in shop-keepings and as street dealer. Sailing was also a well populated profession almost in all the coastal areas of the world. For the industrial revolution era David Gordon, Richard Edwards, and Michael Reich have identified the nature and changing nature of work in three logical phases. They declared the first stage as proletarianization, started from 1780s in England and 1820s in United States, to 1890s. Number of people moved to large enterprises as wage labor but most remained dependent on technical skills and crafts. Homogenization period started from 1870s to the start of World War II. During this era, the workforce challenged the powers of skilled craft workers and often eliminated them. The 3rd phase, segmentation started from 1920s and extended till 1980s when Gordon and his co-authors wrote the book. This era saw scientific management, technological advancement, and increasing industrial units. Deindustrialization The concept of deindustrialization process involves some controversies in terms of its interpretation. Cairncross and Lever described this process in 1982 and 1991 respectively in different ways. They described that an undemanding turndown in terms of either manufacturing of products or insufficiency of employee is an aspect of deindustrialization. Another kind of deindustrialization may occur due to the progressive failure in the external trade of products to achieve the sufficient exports over imports. An imbalance economy is the outcome of such deindustrialization. The consistent economic imbalance creates another deindustrialization in which the effected country cannot sustain to produce its further products. Economists and intellectuals have tried to explain the concept of deindustrialization in their times. Ineffective communication, breakthroughs in transportation and in information technology, labor migration and resources mobility, and direct foreign investment are main contributing factors to create deindustrialization in different parts of the world (Bluestone & Harrison 1982). Rowthern (1987) along with Wells differentiated the positive and negative aspects of deindustrialization. As a positive aspect they declared it the maturity of economy while poor economy was its negative side. According to Rowthorn (1992), the Marx’s theory about the industrial decline may be the first theory to explain the reindustrialization process. Marx’s theory highlights that scientific technology creates high production environment. But at the same time, the scientific technology replaces the people, consequently an organic composition of capital increases. In 2002, George Reisman pointed out that deindustrialization was the result of inflation. References Acs, Z.J. and Audretsch, D.B (2005). Handbook of Entrepreneurship Research: An Interdisciplinary Survey and Introduction, Springer, 1st Ed Arthur, M.B., Rousseau, D.M. (1996), The boundaryless career: a new employment principle for new organizational era", in Rousseau, D.M. (Eds),Arthur, M.B., Oxford University Press, Oxford, pp.370-82. Bluestone, B. and Harrison, B. (1982). The Deindustrialization of American: Plant Closings, Community Abandonment and the Dismantling of Basic Industry. New York: Basic Books Cairncross, A. (1982). What is Deindustrialization? pp. 5–17 Blackaby, F (Ed.) Deindustrialization, London: Pergamon Carney, P.T. (2006-07-21), Big Business and Big Government, http://www.cato.org/research/articles/cpr28n4-1.html Gordon, D., Edwards, R and Reich, M. (1982). Segmented Work, Divided Workers: The Historical Transformation of Labor in the United States. New York: Cambridge University Press http://www.merriam-webster.com/dictionary/marketing Kotler, P., Armstrong, G., Wong. V., and Saunders, J. (2008). Marketing defined. Principles of Marketing, 5th Ed. p. 7 Kotler, Philip; Kevin Lane Keller (2009). A Framework for Marketing Management (4th ed.). Pearson Prentice Hall Lever, W.F. (1991). Deindustrialization and the reality of the post-industrial City, Urban Studies, Vol. 28, No. 6, pp. 983-999 Madeline, L. (2007). Challenging the Culture of Affluence, Independent School, Vol. 67.1, pp. 28-36 Rowthorn, R (1992). Productivity and American Leadership – A Review, Review of Income and Wealth Vol. 38, No. 4 Ryan, M. T. (2007). Consumption, George Ritzer (Ed.) The Blackwell Encyclopedia of Sociology, Blackwell Publishing, p. 701 Schumpeter, J. A. (1942). Capitalism, Socialism and Democracy Sobel, R (1974). The Entrepreneurs: Explorations within the American Business Tradition, Beard Books Taylor, F. W. (1911). The Principles of Scientific Management, New York: Harper Brothers Read More