John D Rockefeller and the Standard Oil Trust
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John D. Rockefeller is a legacy in enterprising late 19th century in America. He is the founder and owner of Standard Oil trust, the monopoly that provides oil in America during that period. Rockefeller had a great impact on the economic, legal and other aspects during his era. This is a great example that illustrates the concept of business power. Furthermore, the idea of dominance theory is also exemplified in this case. The case about Rockefeller and his Standard Oil is an excellent example because Rockefeller is very well known and it proves that the theory of levels and spheres of corporate power and dominance theory has been applied in reality earlier.
1. With reference to the levels and spheres of corporate power discussed in the chapter, how did the power of Standard Oil change society? Was this power exercised in keeping with the social contract of Rockefellers era?
Rockefeller changed the society in many aspects, especially in economic, culture and legal. He was able to buy out most of his competitor and force them to bankruptcy. That fact caused a negative impact on the economy at that time. However, the development of Standard Oil trust also flourished the economy by building facilities and employing workers. In the legal aspect, his action of forcing competitor to go out of business and control the railroad also raised a concern for the government to pass a law against monopoly. He also had culture powers since he provided fuel to other industries and household.
The power wasnt exercised in keeping with the social contract due to the fact that his power was too strong that can force other competitors out of business. It was obviously an unethical behavior that may be also illegal these days.
2. How does the story of Standard Oil illustrate the limits of business power? Does it better illustrate the dominance theory or the pluralist theory discussed in the chapter?
The example of Standard Oil proves that there was no limit of business power. Rockefeller exceeded his power and used it unethically. His competitor had to go out of business or sell their assets to him. “He made them “sweat” and “feel sick” until they sold.” That fact illustrate that the dominance theory was applied in this case to the full extent. Rockefeller clearly abused his extreme power to practice his unethical competitive strategy.
3. Did Rockefeller himself ever act unethically? By the standards of his day? By those of today? How could he simultaneously be a devout Christian and a ruthless monopolist? Is there any contradiction between his personal and business ethics?
Back in those days, Rockefellers action was not considered unethical or illegal. However, the government has involved into the business world to regulate a safe competition and a fair business environment. Therefore, if he were in this modern