John D. Rockefeller, Sr.

Corrupt Titan or Admirable Businessman?

Becky Anderson

Photo Courtesy of University of Rochester

Corrupt Robber Baron?

• Standard Oil was broken up in 1911 by the Supreme Court

• Undercut competitors prices

• Sabotage

• Physical Threats

• Bribery

(Wooten 34)

But..

• Rockefeller is often misrepresented

• At the time, his actions were not illegal and were common practices in business. Standard was broken up for being trust-holding ex post facto

• Greatest philanthropist to ever live- donated $550 million

Why would people buy from Standard

if it was so bad?

• Better quality product

• Standard’s second-grade product was better than other companies’ first-grade

• Dramatic decrease in the price

• Greater output of oil and gas (30x more)

Admirable businessman?

• Reduced the costs of production

• Large Profits

• Horizontal Integration

• Vertical Integration

• Efficient

• Excellent administrator

Thesis

• Despite the fact that he remains one of the most hated businessmen of all time, John D. Rockefeller’s success came because his skills as a business administrator helped him eliminate inefficiencies within the industry.

Horizontal Integration

• Acquiring competition in the same industry

• Consolidated all of the oil companies in Ohio

• Bought out competitors at fair prices

• Began to consolidate the oil companies throughout America

Vertical Integration

• Merging companies against production

• Barrel making

• Pipeline systems

• Railroad rebates

Efficiency

• Acquiring other companies was a way of increasing efficiency

• Efficient machines• Monetary efficiency• Reduced the amount of

solder used to seal barrels from 40 drops per barrel to 39, saving hundreds of thousands of dollars

Administration

• Brought together some of the best businessmen in America to join his company

• Created a model for corporate business administration

• Subsidiary companies headed by former rivals– Jacob Jay Vandergrift in

charge of pipelines

Lasting Impacts on the oil industry

• Although Standard Oil was broken up, remnants of its company still remain in the industry today

• Exxon-Mobil, Texaco, Chevron, Conoco, and other companies still remain to this day

Bibliography

• University of Rochester. 14 June

2007. <history.rochester.edu>

• Varvra, Bob. “Rockefeller’s Power,

Wealth Changed American Business.”

National Petroleum News 92.13. (2000).

16-17. ProQuest. George Mason U Lib.,

Fairfax, VA. 2 June 2007

<http://www.proquest.com>.

• Wooten, Sara. People At the Center

of the Industrial Revolution. San Diego:

Blackbirch,2004.