Beruflich Dokumente
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Business Power
Chapter 3
3-1
James B. Duke and the American Tobacco
Company
o 1881 – Duke used Russian immigrants to roll his
cigarettes and women to market them
o 1883 – Negotiates an exclusive contract for a
cigarette-rolling machine and expands his sales to
China
o 1884 – Embraced Rockefeller’s methods and formed
the American Tobacco trust
3-2
James B. Duke and the American Tobacco
Company Opening Case
o 1892 – 2.9 billion cigarettes sold
o 1903 – More than 10 million cigarettes sold
o 1911 – Duke’s monopoly broken up
o Duke’s career illustrates the power of commerce to
change society
3-4
The Nature of Business Power
3-5
What is Power?
3-6
Levels and Spheres of Corporate Power
3-7
Levels and Spheres of Corporate Power
3-8
The Story of the Railroads
3-9
The Story of the Railroads
3-10
The Story of the Railroads
3-11
The Story of the Railroads
3-12
The Story of the Railroads
3-13
Figure 3.1 - Railroad Track Miles in
Operation: 1830–2007
3-14
Two Perspectives on Business Power
3-15
Two Perspectives on Business Power:
Dominance Theory
o Corporate asset concentration creates monopoly or
oligopoly in markets that reduces competition and
harms consumers
3-16
Two Perspectives on Business Power:
Dominance Theory
o Merger waves are caused by changes in the economic
environment that create incentives to combine
o The public viewed the huge firms as colossal
monuments to greed
o In the twentieth century, corporations continued to
grow in size, but the marked rise in asset
concentration slowed and leveled off
3-17
Two Perspectives on Business Power:
Dominance Theory
o With economic globalization, the number of
multinational firms and the scale of their activity has
grown
o Adherents of the dominance theory believe that the
increasing size and financial power of global
corporations will be converted into the same old
abuses
o No corporation, no matter how large, is assured of
prospering
3-18
Two Perspectives on Business Power:
Dominance Theory
o Elite dominance
o Belief that there is a small number of individuals who,
by virtue of wealth and position, control the nation
o Power elite: A small group of individuals in control
of the economy, government, and military
o The theory of its existence is associated with the
American sociologist C. Wright Mills
3-19
Two Perspectives on Business Power:
Pluralist Theory
o No entity or interest has overriding power, and each
may check and balance others
o Features of American society which support the thesis
of pluralism
o It is infused with democratic values
o American encompasses a large population spread over
a wide geography and engaged in diverse occupations
o The Constitution encourages pluralism
3-20
Figure 3.2 - Boundaries of Managerial
Power
3-21
Boundaries of Managerial Power
3-22
Concluding Observations
3-23