-relevant to CAT : T5 & ACCA : F1, P3, P5
(please note that the article should be read in conjunction with my lecture class on Chandler's model on corporate growth)
EXECUTIVE SUMMARY
John Davison Rockefeller (July 8, 1839 – May 23, 1937) was an American industrialist and philanthropist. Rockefeller revolutionized the petroleum industry and defined the structure of modern philanthropy. In 1870, he founded the Standard Oil Company and ran it until he officially retired in 1897.[1] Standard Oil began as an Ohio partnership formed by John D. Rockefeller and partners. Rockefeller kept his stock and as gasoline grew in importance, his wealth soared and he became the world's richest man and first American billionaire, and is often regarded as the richest person in history.
THE MOST POWERFUL INDUSTRIALIST IN HUMAN HISTORY
John D Rockefeller began as a humble oil business book-keeper in Cleveland, Ohio and in just seven years rose to control a tenth of the entire US oil business.
In the late 19th century the oil industry was a free-for-all, the law of the jungle ruled. Rockefeller used this 'individual freedom' to pursue several extremely successful and deceitful tactics to accumulate capital.
EMPIRE BUILDER
He would secretly buy up or create new oil related companies such as engineering and pipeline firms. These seemed to be independent operators. Rockefeller and his close colleagues secretly controlled the firms and gave Standard Oil, Rockefeller's main oil company, hidden rebates.
Another tactic was to buy up a competing oil company, again secretly. Officials from this company could then be used very effectively to spy on, and give advanced warning of, deals being hatched by his real competitors.
Almost certainly the most lucrative secret deals done by Rockefeller and his partners were with the railroads. These 'in harmony' deals meant those refineries and oil traders not 'in harmony' with standard would find that railroads would refuse point blank to move their oil, whatever the price.
Oil, of course, is free at source, so once the investment in refining and extraction plant has been made the only really important cost was transportation. Rockefeller's secret railroad rebates on the transportation of his oil kept his competitors guessing for years. None of them could understand how he kept pump prices so low. They were all bemused that Standard Oil had being growing at such a rate. How he managed to persuade the railroads to give him rebates and keep the deals secret is still not clear.
Allun Nevins has produced an official biography¹ of the Rockefeller empire but even he cannot help but question its morality. Of a railroad contract signed on 17 October 1877 he says, "The commission was excessive for the services performed. It was ethically indefensible." "Today," he says, "we must condemn the misuse of power not only as a crushing blow to the company's competitors but as an indirect tax on the public."
Old film of John Rockefeller shows him moving in a curiously stiff and wooden fashion, expressionless. He proffessed to being a Baptist and went to church regularly, but did he enjoy it? Anthony Sampson in his book 'The Seven Sisters' quotes John Rockefeller as having a favourite maxim; 'Don't let good fellowship get the least hold of you'. Jerome Greene called him, "the most unemotional man I have ever known".
COLLABORATION STRATEGIES
One shadowy deal that Standard Oil of California (or SOCAL) struck back in the 1930's changed the face of urban America for ever. The Firestone Tire and Rubber Company, Phillips Petroleum Co., Mack Truck and General Motors collaborated on a project with SOCAL called National City Lines. The tram systems in the urban US were suffering from under-investment and often crippling debt repayments so National City Lines stepped in across the States to liberate the populous from their cheap and cheerful old 'streetcar' systems. They were replaced with motor buses or they were gradually closed down completely.
The demand for motor cars soared returning massive profits for all involved in the deal. By 1940 General Motors alone had been responsible for the disposal of more than 100 urban streetcar operations. In the late forties the consortium was found guilty by the federal grand jury under anti-trust (anti-competitive) legislation but the $5,000 fine was laughable. It did not even amount to the annual profit returned from the conversion of a single streetcar.
National City Lines sold the dream of the bus and the car to businessmen and politicians right across the continent. In Detroit, even the chairman of the rapid transit company declared the car as the 'magic carpet of transportation for all mankind'. Mayor LeGuardia in NYC said the car represented the best of modern civilisation, whereas the tram was simply an old-fashioned obstacle to progress.
So where are the Rockefellers now? The current head of the family is David Rockefeller, Chairman of the Chase Manhattan Bank and prime mover in the secret 'Bilderberg' and 'Trilateral Commission' elite groups.
GROWTH THROUGH DIVERSIFICATION
They may have moved the core of their interests from Oil to Banking and branched out considerably but the Rockefeller family have not given up the fascination of clandestine operations to keep their business empire beating at the heart of the capitalist machine.
So much for present organisation, and now as to how far through this organisation the Standard Oil Company is able to realise the purpose for which it was organised - the control of the output, and, through that, the price, of refined oil. That is, what per cent. of the whole oil business does Mr. Rockefeller's concern control. First as to oil production. In 1898 the Standard Oil Company reported to the Industrial Commission that it produced 35.58 per cent. of Eastern crude - the production that year was about 52,000,000 barrels...
MONOPOLISTIC CONTROLS
But while Mr. Rockefeller produces only about a third of the entire production, he controls ninety percent of total output; that is, all but about ten per cent. goes immediately into his custody on coming from the wells. It passes entirely out of the hands of the producers when the Standard pipeline takes it. The oil is in Mr. Rockefeller's hands, and he, not the producer, can decide who is to have it. The greater portion of it he takes himself, of course, for he is the chief refiner of the country. In 1898 there were about twenty-four million barrels of petroleum products made in this country. Of this amount about twenty million were made by the Standard Oil Company; fully a third of the balance was produced by the Tidewater Company, of which the Standard holds a large minority stock, and which for twenty years has had a running arrangement with the Standard. Reckoning out of the Tidewater's probable output, and we have an independent output of about 2,500,000 in twenty-four million. It is obvious that this great percentage of the business gives the Standard the control of prices.
John Davison Rockefeller (July 8, 1839 – May 23, 1937) was an American industrialist and philanthropist. Rockefeller revolutionized the petroleum industry and defined the structure of modern philanthropy. In 1870, he founded the Standard Oil Company and ran it until he officially retired in 1897.[1] Standard Oil began as an Ohio partnership formed by John D. Rockefeller and partners. Rockefeller kept his stock and as gasoline grew in importance, his wealth soared and he became the world's richest man and first American billionaire, and is often regarded as the richest person in history.
THE MOST POWERFUL INDUSTRIALIST IN HUMAN HISTORY
John D Rockefeller began as a humble oil business book-keeper in Cleveland, Ohio and in just seven years rose to control a tenth of the entire US oil business.
In the late 19th century the oil industry was a free-for-all, the law of the jungle ruled. Rockefeller used this 'individual freedom' to pursue several extremely successful and deceitful tactics to accumulate capital.
EMPIRE BUILDER
He would secretly buy up or create new oil related companies such as engineering and pipeline firms. These seemed to be independent operators. Rockefeller and his close colleagues secretly controlled the firms and gave Standard Oil, Rockefeller's main oil company, hidden rebates.
Another tactic was to buy up a competing oil company, again secretly. Officials from this company could then be used very effectively to spy on, and give advanced warning of, deals being hatched by his real competitors.
Almost certainly the most lucrative secret deals done by Rockefeller and his partners were with the railroads. These 'in harmony' deals meant those refineries and oil traders not 'in harmony' with standard would find that railroads would refuse point blank to move their oil, whatever the price.
Oil, of course, is free at source, so once the investment in refining and extraction plant has been made the only really important cost was transportation. Rockefeller's secret railroad rebates on the transportation of his oil kept his competitors guessing for years. None of them could understand how he kept pump prices so low. They were all bemused that Standard Oil had being growing at such a rate. How he managed to persuade the railroads to give him rebates and keep the deals secret is still not clear.
Allun Nevins has produced an official biography¹ of the Rockefeller empire but even he cannot help but question its morality. Of a railroad contract signed on 17 October 1877 he says, "The commission was excessive for the services performed. It was ethically indefensible." "Today," he says, "we must condemn the misuse of power not only as a crushing blow to the company's competitors but as an indirect tax on the public."
Old film of John Rockefeller shows him moving in a curiously stiff and wooden fashion, expressionless. He proffessed to being a Baptist and went to church regularly, but did he enjoy it? Anthony Sampson in his book 'The Seven Sisters' quotes John Rockefeller as having a favourite maxim; 'Don't let good fellowship get the least hold of you'. Jerome Greene called him, "the most unemotional man I have ever known".
COLLABORATION STRATEGIES
One shadowy deal that Standard Oil of California (or SOCAL) struck back in the 1930's changed the face of urban America for ever. The Firestone Tire and Rubber Company, Phillips Petroleum Co., Mack Truck and General Motors collaborated on a project with SOCAL called National City Lines. The tram systems in the urban US were suffering from under-investment and often crippling debt repayments so National City Lines stepped in across the States to liberate the populous from their cheap and cheerful old 'streetcar' systems. They were replaced with motor buses or they were gradually closed down completely.
The demand for motor cars soared returning massive profits for all involved in the deal. By 1940 General Motors alone had been responsible for the disposal of more than 100 urban streetcar operations. In the late forties the consortium was found guilty by the federal grand jury under anti-trust (anti-competitive) legislation but the $5,000 fine was laughable. It did not even amount to the annual profit returned from the conversion of a single streetcar.
National City Lines sold the dream of the bus and the car to businessmen and politicians right across the continent. In Detroit, even the chairman of the rapid transit company declared the car as the 'magic carpet of transportation for all mankind'. Mayor LeGuardia in NYC said the car represented the best of modern civilisation, whereas the tram was simply an old-fashioned obstacle to progress.
So where are the Rockefellers now? The current head of the family is David Rockefeller, Chairman of the Chase Manhattan Bank and prime mover in the secret 'Bilderberg' and 'Trilateral Commission' elite groups.
GROWTH THROUGH DIVERSIFICATION
They may have moved the core of their interests from Oil to Banking and branched out considerably but the Rockefeller family have not given up the fascination of clandestine operations to keep their business empire beating at the heart of the capitalist machine.
So much for present organisation, and now as to how far through this organisation the Standard Oil Company is able to realise the purpose for which it was organised - the control of the output, and, through that, the price, of refined oil. That is, what per cent. of the whole oil business does Mr. Rockefeller's concern control. First as to oil production. In 1898 the Standard Oil Company reported to the Industrial Commission that it produced 35.58 per cent. of Eastern crude - the production that year was about 52,000,000 barrels...
MONOPOLISTIC CONTROLS
But while Mr. Rockefeller produces only about a third of the entire production, he controls ninety percent of total output; that is, all but about ten per cent. goes immediately into his custody on coming from the wells. It passes entirely out of the hands of the producers when the Standard pipeline takes it. The oil is in Mr. Rockefeller's hands, and he, not the producer, can decide who is to have it. The greater portion of it he takes himself, of course, for he is the chief refiner of the country. In 1898 there were about twenty-four million barrels of petroleum products made in this country. Of this amount about twenty million were made by the Standard Oil Company; fully a third of the balance was produced by the Tidewater Company, of which the Standard holds a large minority stock, and which for twenty years has had a running arrangement with the Standard. Reckoning out of the Tidewater's probable output, and we have an independent output of about 2,500,000 in twenty-four million. It is obvious that this great percentage of the business gives the Standard the control of prices.
His foundations pioneered the development of medical research, and were instrumental in the eradication of hookworm and yellow fever. He is also the founder of both University of Chicago and Rockefeller University.
Standard Oil was convicted in Federal Court of monopolistic practices and broken up in 1911. Rockefeller spent the last 40 years of his life in retirement. His fortune was mainly used to create the modern systematic approach of targeted philanthropy with foundations that had a major effect on medicine, education, and scientific research.
ROCKERFELLER’S AND BILL GATE’S WEALTH COMPARED
Bill Gates' retirement from Microsoft--the tech goliath now worth $260 billion he founded as a teenager--may not mark the end of a career, but it certainly offers a logical vantage from which to view a most remarkable one. And as do legendary sports heroes, the software king no doubt will invite endless assessments and comparisons.
To be fair, there aren't all that many people one can compare Bill Gates to. Very few entrepreneurs have made such an impact on their society, and very few have made so much money. Still, by any rough measure of the value of money and achievement over time, it seems clear that Gates remains led by at least three ghosts--those of John D. Rockefeller, Andrew Carnegie and Cornelius Vanderbilt.
Start with the oil baron. Rockefeller had accumulated (very) roughly a billion dollars by 1913, a sum that represented 1/65 of the U.S. gross national product. Gates' wealth, $58 billion, is perhaps 1/190 of the current GNP, putting Rockefeller well ahead of Gates--and, for that matter, every other American who ever lived
ADDITIONAL READINGS :
Businessweek, 1998, The Monopoly That Went Too Far , http://www.businessweek.com/archives/1998/b3578093.arc.htm,: May 18, 1998
Randall e. Stross, 2008, Bill Gates: Richest American Ever And You Thought Rockefeller Had Money, http://money.cnn.com/magazines/fortune/fortune_archive/1997/08/04/229712/index.htm, Date visited : 11th September
Richard Snow, 2008, Entrepreneurs For The Ages, http://www.forbes.com/2008/06/24/microsoft-gates-rockefeller-ent-tech-cx_rs_0624entreforagesgates.html, 24th June
3 comments:
Rockefeller lived a life of abstinence from alcohol and tobacco. Died almost a centinerian. 98 years old.
Sorry to be out of topic.
Sir you may delete it
someone has to stop this !
*writes on board*
"copy down!"
Answer me while you are copying! *kept on questioning and on and on and we cant copy*.."why are you not copying?! So slow lah!"
2nd time copying "Why are you talking while copying?! you supposed to keep quiet copy and understand!"
"Look up look up!" 2seconds past " Why are you not writing!"
"look at your notes!" 2seconds later " Look at the board!"
"Write it down lah". 2seconds past "Pens DOWN!"
( good facial and head exercise!)(alertness test)
*When she question, we think, she say" Why are you not answering! ANSWER ME! I WANt an ANSWER! Don't make me repeat my question!"
*again she question, we answer immediately. " Why are you not THINKING! THATS the problem with you all. You all don't think !"
*after 4 to 5 hours of cramping theories, she kept questioning and expects our brain to be as fast as pentium 5*
*First day-"Forget everything lah you learn in f7, groups completely changed!*
*Next day- "everything the same as f7, I expect you to get it right! or i leave the class*
Someone has to stop this and P2 will be a wonderful subject.
We Don't want to be victims for Lecturer's and college's stress.
We are not punchbags.
Don't vent on us.
We are innocent!
We learn new things, we need to digest. We need to think. Don't expect us to process all information as fast as a computer.
We go for class to learn. not to be scolded.
If we know everything, WE DONT HAVE TO GO FOR CLASS
Want Us to score, Make us love the subject, Before making us love the subject, We have to love the lecturer first
Help us to love her.
We want to. Someone please help to ring some sense into responsible parties.
I need a place to vent.
Hmm, so true, eventhough i have a very high respect towards all lecturers, but i can't deny the fact that i mostly enjoyed attending P1 and P3 classes, rather than P2.
Eventhough P1 may seem abit boring (obviously as it is a theory paper), but looking at how friendly Mr.Goh is and his approach in teaching, gives u a less stree-free environment (This applies to u to, sir :)). And that does not mean that we as students will not study because we are not pressured! In fact, whenever i try to study P2, theres always a stressful feeling there, not that i do not understand the subject, but the feelings somehow lingered inside as an after-shock effect from an astonishing 5 hours of stress.
But i guess, sometimes we just have to ignore these distractions and just continue studying for our own good:) I guess the "CORE COMPETENCE" may experience "ICARUS PARADOX", if this continues, i don't know, just my 2 cents.
In fact, rumour is that, some part timers (as i heard during F7) actually boycott her and attend other tuition providers as when a person reaches 21 years old, they wouldn want to be scolded around.
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