Vertical Integration is the consolidation of all functions related to a particular industry, from the extraction and transportation of raw materials to manufacturing and finished-product distribution and sales. Businessmen made the practice of vertical integration popular in corporate America during the Gilded Age, which began directly after the Civil War and continued through the 1920’s. This mainly took place in the heavily industrialized cities in America.
Vertical Integration is a basic monopoly of one particular product. “Through vertical integration, a company took over all the different businesses on which it relied for its primary function, for example, Carnegie Steel, which came to control not only steel mills, mines, railroads, and other enterprises.” This quote was taken from The Unfinished Nation by Alan Brinkley, published by McGraw-Hill Companies Inc, and was copyrighted in 2008.
One company controls all aspects of a business on which it relies on for its primary product. One company can control the business so there is no profit to be made in anything other than the final product and owners. The finished product came faster and with more new technologies than before.
Vertical integration created a lasting change in the economic structure of America. It was a beginning of big business and major corporations. It also began, what I call “management chains”, which is in layman’s terms, a hierarchy of management. For example, there is a regional manager who is in charge of 7 factories, each of those 7 factories has its own manager, and each station has its own manager, and each manager follows the chain of command where the station manager would talk to the factory manager and he would talk to the regional manager, and they would each have their own responsibilities.
“A vertical combination is one that brings together a number of
plants, each of which concerns itself with a separate stage in the
production of the finished product. This...
Please join StudyMode to read the full document