11 - Finding out what actual costs are Finding out what...

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9/7/11 New Flexibility of Industrial, Agricultural Location o Larger market made Mass Production Feasible (money key factor) New England Water Power Winter is a problem b/c rivers freeze Limits location of factories o Cheaper Transport made Ag Specialization Feasible Corn, wheat, cotton, dairy belt Milk close to urban markets b/c of perishable product o Problems with increasing productivity by specialization Monoculture- pests, drought Farmers more vulnerable to the economic cycle RR as a Model of Organization, Developer of New Management Techniques o Nation’s Largest Employer, Geographically Decentralized 1880 2.5 % of nations labor Problems other than size (too large) Too many moving parts Lots of small transactions Spread across the nation Most costs are fixed costs rather than variable costs o Better off working for less to keep trains moving than them sitting still. (lose less theory) o Capital Intensive, Income in Small Transactions -> cost accounting
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Unformatted text preview: Finding out what actual costs are Finding out what earnings are in relation to volume Figured out big trains, loaded full, run fast = money First Unionized Industry, Craft Union Model not Optimal o 1875- First CBA for RR o 1890- Firemen Unionized (worst job, last to unionize) Higher the skill the less needy of a union, but were the most unionized o Divided unions up, leading to competing unions, not efficient RR as Stimulus to Business Consolidation o Competing RR creates competition driving rates down o Towns wanted RR to run thru their town, creating political tension Bigness, Concentration, Forms of Consolidation o Corporation as Dominant form of Organization o Vertical vs Horizontal Integration o Pools and Cartels o Trusts and Holding Companies o Interlocking Directorates Businessmen: Robber Barons or Industrial Statesmen...
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11 - Finding out what actual costs are Finding out what...

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