Chapter 1 Flashcards
Before 1840 in general the situation was:
Business environment was constrained by lack of information
Lack of economic knowledge and associated risk lead to uncertainty
Limited infrastructure
In 1840 how did the transport look like
Transportation by waterways was dominant
Steam trains and railroad were few
In 1840 how did the communication look like
Poor communication, majority was done by mail
telegraph was invented but took long to spread
In 1840 how did the finances look like
Long term debts were not known
Most capital was private
High investment risks and low protection of investors
In 1840 how did the production technology look like
Relatively undeveloped and inefficient
In 1840 how did the government look like
Governments were not much involved, except for few public projects (rails)
In 1910 in general the situation was:
The concept of mass production and mass distribution dominated the economy. This led to the combination of scale economies and through put as basic determining factors.
In 1910 how did the transport look like
Fast and reliable movement of goods
Railroads
Small firms locally sell to big distribution firms
In 1910 how did the communications look like
Reliable and instantaneous communication
In 1910 how did the finances look like
Financial markets established and regularly traded stocks of large firms
Credits opened new possibilities & formed basic accounting practices to keep track of financial performance
Balance sheets and public accounting for investors became standard
In 1910 how did the production technology look like
Mass production introduced to shop floors
In 1910 how did the government look like
Due to fast increasing market shares of single firms and more power, first antitrust activities were introduced by U.S. government
Today the general situation looks like
Globalization has a major impact on the business world and the infrastructure.
Factors of production (labor, finance, raw materials, land) can be sourced globally
Specialization of firms took place and the concept of outsourcing arose for all functions
Today the transport looks like
Air, rail and ground travel
Data processing technology and communication allows large-distance shipments and the combination of different means
Today the communication looks like
Telecommunication technologies allow a reliable and infinite transfer of large and complex data creating global market for a wide range of products and services
The internet revolutionized all kinds of communications
