The Standard Oil Company founded by John D. Rockefeller and the U.S. Steel
Company founded by Andrew Carnegie. The Standard Oil Company and U.S. Steel
Company were made successful in different ways due to the actions of their
different owners. The companies differed in their labor relations, market
control, and structural organization. In the steel industry, Carnegie developed
a system known as vertical integration. This means that he cut out the middle
man. Carnegie bought his own iron and coal mines because using independent
companies cost too much and were inefficient. By doing this he was able to
undersell his competetors because they had to pay the competitors they went
through to get the raw materials. Unlike Andrew Carnegie, John D. Rockefeller
integrated his oil business from top to bottom, his distinctive innovation in
movement of American industry was horizontal. This meant he followed one product
through all its stages. For example, rockrfeller controlled the oil when it was
drilled, through the refining stage, and he maintained control over the refining
process turning it into gasoline. Although these two powerful men used two
different methods of management their businesses were still very successful (Conlin,
425-426). Tycoons like Andrew Carnegie, “the steel king,” and John D.
Rockefeller, “the oil baron,” exercised their genius in devising ways to
circument competition. Although, Carnegie inclined to be tough-fisted in
business, he was not a monopolist and disliked monopolistic trusts. John D.
Rockefeller came to dominate the oil industry. With one upward stride after
another he organized the Standard Oil Company, which was the nucleus of the
great trust that was formed. Rockefeller showed little mercy. He believed
primitive savagery prevailed in the jungle world of business, where only the
fittest survived. He persued the policy of “ruin or rule.” Rockefeller’s
oil monopoly did turn out a superior product at a relatively cheap price.
Rockefeller belived in ruthless business, Carnegie didn’t, yet they both had
the most successful companies in their industries. (The American Pageant, pages
515-518) Rockefeller treated his customers in the same manner that Andrew
Carnegie treated his workers: cruel and harsh. The Standard Oil Company
desperately wanted every possible company to buy their products. Standard Oil
used ruthless tactics when Rockefeller threatenedto start his own chain of
grocery stores and put local merchants out of business if they did not buy oil
from Standard Oil Company. Carnegie dealt with his workers with the same cold
lack of diplomacy and consideration. Carnegie would encourage an unfriendly
competition between two of his workers and he goaded them into outdoing one
another. Some of his employees found working under Carnegie unbearable. These
rivalries became so important to the employees that somedidn’t talk to each
other for years (McCloskkey, page 145). Although both Carnegie and Rockefeller
created extermely successsful companies, they both used unscrupulous methods in
some aspect of their corporation building to get to the top. The success of the
Standard Oil Company and U.S. Steel company was credited to the fact that their
owners ran them with great authority. In this very competetive time period, many
new businesses were being formed and it took talented businessmen to get ahead
and keep the companies running and make the fortunes that were made during this
period.